Dipping to H1 demand at 1.1199/1.1212 offers possible reversal

3 thg 6, 2020

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

March, evident from the monthly chart, left behind a long-legged doji indecision candle, with its extremes crossing paths with heavyweight supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [1.6038]) and demand at 1.0488/1.0912.

April spent the best part of the month feasting on the top edge of 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 taking aim at 1.1857/1.1352.

With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.

Daily timeframe:

Partially altered from previous analysis -

The euro continued to march northbound on Wednesday, up more than 65 pips, or 0.6%, against the US dollar.

Recording its seventh successive daily gain, motivated on the back of persistent USD weakness, price extended space north of the 200-day simple moving average at 1.1011 and secured position a few pips off supply at 1.1323/1.1268. Technicians will note this area unites with trendline resistance (1.0879), a 127.2% Fib ext. level at 1.1286 and 78.6% Fib ret level from 1.1310.

Indicator-based traders will also note the RSI entered overbought terrain.

H4 timeframe:

As you can see from the chart, the euro slipped amid European trading Wednesday, dipping to demand at 1.1189/1.1158 (prior supply). Dollar weakness prompted a bid from the aforesaid area, subsequently throwing light on stacked supply between 1.1368/1.1338 and 1.1360/1.1316.

H1 timeframe:

Early US latched onto a healthy bid, subsequently toppling the 1.12 handle and leaving behind a particularly interesting area of demand at 1.1199/1.1212. Selling pressure off 1.1250 will likely be sufficient to hurl the H1 candles to 1.1199/1.1212 today which, technically speaking, exhibits strength, enough to perhaps drive moves to supply from 1.1322/1.1286.

Structures of Interest:

Dipping to H1 demand at 1.1199/1.1212 offers a high-probability reversal zone. Upside targets here include the 1.1250 point, the daily supply at 1.1323/1.1268 and possibly H1 supply at 1.1322/1.1286 (essentially glued to the upper range of the noted H4 supply).