EUR/USD: Technical outlook and review...
Weekly gain/loss: + 59 pips
Weekly closing price: 1.0698
Since crossing swords with the weekly support area coming in at 1.0333-1.0502, the single currency has closed in the green for five consecutive weeks. From our perspective, the weekly candles look poised to continue higher this week, with the crosshairs likely fixed on the long-term weekly trendline resistance extended from the low 0.8231, followed closely by weekly resistance seen at 1.0819.
Daily resistance at 1.0710, as you can see, capped upside during Wednesday’s segment last week. The downside move from this barrier, nonetheless, was a relatively short-lived one. The major popped to lows of 1.0589, before pulling back and ending the week retesting the level for a second time, indicating somewhat of a bullish stance. If 1.0710 is taken out this week, the daily resistance level coming in at 1.0850 would likely be the next limit to reach.
A quick recap of Friday’s trade on the H4 chart shows that Trump’s inauguration and speech failed to set the markets on fire. The pair bottomed going into London lunch around the 1.0625 mark, and rallied as the US began opening their doors for business, concluding the day just two pips ahead of the 1.07 psychological handle.
Our suggestions: While we cannot rule out the possibility of another bearish response seen from 1.07 today/this week (owing to its connection with daily resistance mentioned above at 1.0710), our team remains biased to the upside.
Ultimately, a daily close above the aforementioned daily resistance would be needed before the team would consider becoming buyers in this market. Should this come to fruition, there’s space seen on all three timeframes (weekly/daily/H4) to advance higher. A retest of 1.07 followed by a reasonably sized H4 bull candle, in our book, would be sufficient enough to buy the major.
The closest resistance, nevertheless, sits around the 1.08 region, and would be the ideal take-profit target for any longs beyond 1.07. What makes it so is the fact that it’s also a high-probability reversal zone for shorts as well. Not only does 1.08 sit nearby a H4 Quasimodo resistance level at 1.0796, it also boasts a deep 88.6% Fib resistance at 1.0809 and is planted nearby the above noted weekly resistance at 1.0819.
Data points to consider: ECB President Draghi speaks today at 11.30pm GMT.
Levels to watch/live orders:
• Buys: Watch for a daily close to be seen above daily resistance at 1.0710 and then look to trade any H4 retest of 1.07 (a reasonably sized H4 bull candle is required following the retest before a trade can be executed, stop loss: ideally beyond the trigger candle).
• Sells: 1.08 region (dependent on the time of day, this is an area we would consider trading without confirmation, stop loss: 1.0825 aggressive stop, 1.0875 conservative stop).
Weekly closing price: 1.0698
Since crossing swords with the weekly support area coming in at 1.0333-1.0502, the single currency has closed in the green for five consecutive weeks. From our perspective, the weekly candles look poised to continue higher this week, with the crosshairs likely fixed on the long-term weekly trendline resistance extended from the low 0.8231, followed closely by weekly resistance seen at 1.0819.
Daily resistance at 1.0710, as you can see, capped upside during Wednesday’s segment last week. The downside move from this barrier, nonetheless, was a relatively short-lived one. The major popped to lows of 1.0589, before pulling back and ending the week retesting the level for a second time, indicating somewhat of a bullish stance. If 1.0710 is taken out this week, the daily resistance level coming in at 1.0850 would likely be the next limit to reach.
A quick recap of Friday’s trade on the H4 chart shows that Trump’s inauguration and speech failed to set the markets on fire. The pair bottomed going into London lunch around the 1.0625 mark, and rallied as the US began opening their doors for business, concluding the day just two pips ahead of the 1.07 psychological handle.
Our suggestions: While we cannot rule out the possibility of another bearish response seen from 1.07 today/this week (owing to its connection with daily resistance mentioned above at 1.0710), our team remains biased to the upside.
Ultimately, a daily close above the aforementioned daily resistance would be needed before the team would consider becoming buyers in this market. Should this come to fruition, there’s space seen on all three timeframes (weekly/daily/H4) to advance higher. A retest of 1.07 followed by a reasonably sized H4 bull candle, in our book, would be sufficient enough to buy the major.
The closest resistance, nevertheless, sits around the 1.08 region, and would be the ideal take-profit target for any longs beyond 1.07. What makes it so is the fact that it’s also a high-probability reversal zone for shorts as well. Not only does 1.08 sit nearby a H4 Quasimodo resistance level at 1.0796, it also boasts a deep 88.6% Fib resistance at 1.0809 and is planted nearby the above noted weekly resistance at 1.0819.
Data points to consider: ECB President Draghi speaks today at 11.30pm GMT.
Levels to watch/live orders:
• Buys: Watch for a daily close to be seen above daily resistance at 1.0710 and then look to trade any H4 retest of 1.07 (a reasonably sized H4 bull candle is required following the retest before a trade can be executed, stop loss: ideally beyond the trigger candle).
• Sells: 1.08 region (dependent on the time of day, this is an area we would consider trading without confirmation, stop loss: 1.0825 aggressive stop, 1.0875 conservative stop).
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