1.1687/1.1711 houses beautiful confluence for longs!
EUR/USD:
Weekly gain/loss: -0.13%
Weekly closing price: 1.1746
The euro suffered its third consecutive loss last week, down from an overall peak of 1.1961. According to the weekly structure, further downside remains a strong possibility as there is little weekly support seen on the radar until we reach 1.1616. The other key thing to note on the weekly timeframe is the potential AB=CD (see black arrows) 127.2% Fib ext. point at 1.1410, which happens to terminate a few pips beyond a weekly support positioned at 1.1461.
Daily demand at 1.1712-1.1757 remained unbroken during last week’s session, largely due to FOMC action seen on Wednesday. Despite this, upward momentum failed to print much of a follow-though, quickly switching tracks on Thursday and erasing FOMC-inspired gains by the week’s end. In the event that this daily demand area fails to accommodate the buyers this week, then the next port of call will be the nearby daily support band seen at 1.1690.
Following a strong retest of the 1.18 handle going into Friday’s London segment, H4 price aggressively sold off in the shape of two full-bodied H4 bearish candles (US dollar gathered momentum on the back of some optimism regarding the US tax reform). In view of the pair’s close proximity to the H4 Quasimodo support at 1.1722 right now, a test of this level is likely sometime today/early this week. Perhaps the most compelling factor on the H4 timeframe, though, is the green zone seen just below 1.1722 at 1.1687/1.1711 (comprised of a 61.8% H4 Fib support at 1.1711 taken from the low 1.1565, a H4 AB=CD 161.8% Fib ext. point at 1.1705, a round number at 1.17, the aforesaid daily support and a broken H4 Quasimodo level at 1.1687).
Market direction:
The H4 green zone is an encouraging area for a bounce higher, according to the technicals. Not only will a test of this area likely fill any stop-loss orders lurking below the current H4 Quasimodo support and daily demand, it also, as we hopefully demonstrated above, holds an attractive range of confluence! The only drawback, of course, is the fact that weekly sellers appear to be targeting weekly support mentioned above at 1.1616.
As for potential take-profit targets from 1.1687/1.1711, it is difficult to judge at this point since the H4 approach has yet to complete.
Data points to consider: EUR final CPI y/y at 10am GMT.
Areas worthy of attention:
Supports: 1.1722; 1.1687/1.1711; 1.1712-1.1757; 1.1616.
Resistances: 1.18 handle; 1.1788.
Weekly gain/loss: -0.13%
Weekly closing price: 1.1746
The euro suffered its third consecutive loss last week, down from an overall peak of 1.1961. According to the weekly structure, further downside remains a strong possibility as there is little weekly support seen on the radar until we reach 1.1616. The other key thing to note on the weekly timeframe is the potential AB=CD (see black arrows) 127.2% Fib ext. point at 1.1410, which happens to terminate a few pips beyond a weekly support positioned at 1.1461.
Daily demand at 1.1712-1.1757 remained unbroken during last week’s session, largely due to FOMC action seen on Wednesday. Despite this, upward momentum failed to print much of a follow-though, quickly switching tracks on Thursday and erasing FOMC-inspired gains by the week’s end. In the event that this daily demand area fails to accommodate the buyers this week, then the next port of call will be the nearby daily support band seen at 1.1690.
Following a strong retest of the 1.18 handle going into Friday’s London segment, H4 price aggressively sold off in the shape of two full-bodied H4 bearish candles (US dollar gathered momentum on the back of some optimism regarding the US tax reform). In view of the pair’s close proximity to the H4 Quasimodo support at 1.1722 right now, a test of this level is likely sometime today/early this week. Perhaps the most compelling factor on the H4 timeframe, though, is the green zone seen just below 1.1722 at 1.1687/1.1711 (comprised of a 61.8% H4 Fib support at 1.1711 taken from the low 1.1565, a H4 AB=CD 161.8% Fib ext. point at 1.1705, a round number at 1.17, the aforesaid daily support and a broken H4 Quasimodo level at 1.1687).
Market direction:
The H4 green zone is an encouraging area for a bounce higher, according to the technicals. Not only will a test of this area likely fill any stop-loss orders lurking below the current H4 Quasimodo support and daily demand, it also, as we hopefully demonstrated above, holds an attractive range of confluence! The only drawback, of course, is the fact that weekly sellers appear to be targeting weekly support mentioned above at 1.1616.
As for potential take-profit targets from 1.1687/1.1711, it is difficult to judge at this point since the H4 approach has yet to complete.
Data points to consider: EUR final CPI y/y at 10am GMT.
Areas worthy of attention:
Supports: 1.1722; 1.1687/1.1711; 1.1712-1.1757; 1.1616.
Resistances: 1.18 handle; 1.1788.
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