Euro / U.S. DollarShort
Monthly supply plus harmonic bearish bat pattern in play!
EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April spent the best part of the month feasting on the top edge of demand from 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June extending gains and recently reconnecting with the lower ledge of supply at 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
After two days of reasonable bidding, EUR/USD knocked on the doors of a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]) and rotated lower in strong fashion Thursday.
It’s common to see traders sell PRZs and position protective stop-loss orders above the X point, in this case at 1.1495. Common targets fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A-D) at 1.1106 and 1.0926, respectively.
In addition to the bearish configuration, the RSI indicator recently exited overbought territory.
H4 timeframe:
Sellers regained consciousness Thursday, despite an active attempt to topple supply coming in from 1.1415/1.1376 late Wednesday, an area boasting a connection to the lower edge of the daily harmonic PRZ. According to technical studies, price exhibits weak demand (purple – demand appears tested/consumed) until reaching 1.1189/1.1158 (prior supply).
H1 timeframe:
Thursday witnessed the DXY flex its financial muscle above daily support at 95.84 yesterday, sending EUR/USD through the 100-period simple moving average and 1.13 level, with nearby channel support (1.1194) set to embrace price action.
RSI traders will also note the value edging closer to oversold territory.
Structures of Interest:
Monthly supply at 1.1857/1.1352 in play, as well as the daily harmonic bat pattern’s PRZ capping upside and H4 suggesting scope to navigate deeper waters throws light on bearish scenarios under 1.13 today. Some traders, however, will be watching for H1 channel support to give way before taking action, with 1.1250 set as the next support on the H1 timeframe.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April spent the best part of the month feasting on the top edge of demand from 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June extending gains and recently reconnecting with the lower ledge of supply at 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
After two days of reasonable bidding, EUR/USD knocked on the doors of a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]) and rotated lower in strong fashion Thursday.
It’s common to see traders sell PRZs and position protective stop-loss orders above the X point, in this case at 1.1495. Common targets fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A-D) at 1.1106 and 1.0926, respectively.
In addition to the bearish configuration, the RSI indicator recently exited overbought territory.
H4 timeframe:
Sellers regained consciousness Thursday, despite an active attempt to topple supply coming in from 1.1415/1.1376 late Wednesday, an area boasting a connection to the lower edge of the daily harmonic PRZ. According to technical studies, price exhibits weak demand (purple – demand appears tested/consumed) until reaching 1.1189/1.1158 (prior supply).
H1 timeframe:
Thursday witnessed the DXY flex its financial muscle above daily support at 95.84 yesterday, sending EUR/USD through the 100-period simple moving average and 1.13 level, with nearby channel support (1.1194) set to embrace price action.
RSI traders will also note the value edging closer to oversold territory.
Structures of Interest:
Monthly supply at 1.1857/1.1352 in play, as well as the daily harmonic bat pattern’s PRZ capping upside and H4 suggesting scope to navigate deeper waters throws light on bearish scenarios under 1.13 today. Some traders, however, will be watching for H1 channel support to give way before taking action, with 1.1250 set as the next support on the H1 timeframe.
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