EURUSD - Uptrend Intact, Awaiting ECB
Updated
EURUSDDaily
Hourly
This is a continuation of the idea I posted earlier. EURUSD is still in the retracement channel, and it has bounced off the low of the retracement channel on Thurs, making a very nice short swing on the hourly time frame. Lots of buyers came in at 1.1670-1.1680 area, resulting in a very long wick to the down side. Zooming into the 15mins time frame, we can see a nice base formed at 1.169-1.170 zone hence resulting in a nice reversal swing towards the 1.7150 level on Thursday.
From then on, EURUSD embarked on what I called a type 2 market on the H time frame, exhibiting signs of mild trend on more volatile nature. Friday's session and remainder of the week saw EURUSD trending tightly in a 20 pips range with no major signs of pullback. I will be paying attention to the 1.1750 level for evidence of buyers coming in, but I am not too optimistic about this until Wed; where ECB President speaks at 3pm (Singapore Time). On the macro perspective, a very strong EURO is not necessary good for the ECB as it would hurt their exports on a whole. Coming Friday, ECB President Draghi is due to speak at the Jackson Hole Symposium, which would add further volatility to this pair.
Based on technicals, EUR is slated to remain in the retracement channel on the D time frame while edging towards the top. There are 2 possible scenarios I would trade this pair moving forward:
1) Bullish Breakout on D time frame
I would expect price action to show some consolidation near the upper channel before forming a good base for the breakout to happen. Top side being 1.179 and subsequently 1.185.
2) Bearish Reversal on H time frame
Should price action suggest rejection signs (e.g. cluster of wicks) near the upper channel, then I should be able to take a short swing down on H time frame back to 1.175 and subsequently 1.173.
Lets see how the week will open tomorrow!
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