EUR/USD outlook and review...
The single currency sustained further losses on Thursday, down 23 pips on the day. The H4 candles, as you can see, spent the majority of the day fluctuating within a narrow range between October’s opening level at 1.1788 and the 1.18 handle. It was only in the later hours of the US session did price dip lower.
According to the H4 scale, recent selling has potentially unlocked up the trail south down to as far as the H4 support at 1.1730, followed closely by the H4 Quasimodo support plotted at 1.1722. At the same time though, this move brought daily action closer to the top edge of a daily demand area at 1.1712-1.1757. Another important thing to note is that weekly price is currently pressuring the lower edge of a weekly support zone coming in at 1.1880-1.1777. In fact, at current prices, the major is seen trading marginally beneath the barrier! A continued move to the downside from here would likely bring weekly support at 1.1616 onto the radar.
Direction:
• Long: A buy at current market price is challenging, due to the lack of support seen on the H4 picture. The better place for longs, technically speaking, might be the H4 support mentioned above at 1.1730. Not only is the line positioned within the walls of the aforesaid daily demand, it is also located just above a nice-looking H4 Quasimodo support at 1.1722. However, do keep in mind that you may have to contend with potential weekly selling at that point.
• Short: While a short looks appealing below October’s opening level on the H4 timeframe, remain aware that you’d effectively be selling directly into a daily demand! Furthermore, it is difficult to judge weekly direction as weekly price is likely filling stops below the current weekly support zone as we write, which could lead to a rotation back to the upside!
Data points to consider: US employment figures at 1.30pm; US prelim UoM consumer sentiment at 3pm GMT.
According to the H4 scale, recent selling has potentially unlocked up the trail south down to as far as the H4 support at 1.1730, followed closely by the H4 Quasimodo support plotted at 1.1722. At the same time though, this move brought daily action closer to the top edge of a daily demand area at 1.1712-1.1757. Another important thing to note is that weekly price is currently pressuring the lower edge of a weekly support zone coming in at 1.1880-1.1777. In fact, at current prices, the major is seen trading marginally beneath the barrier! A continued move to the downside from here would likely bring weekly support at 1.1616 onto the radar.
Direction:
• Long: A buy at current market price is challenging, due to the lack of support seen on the H4 picture. The better place for longs, technically speaking, might be the H4 support mentioned above at 1.1730. Not only is the line positioned within the walls of the aforesaid daily demand, it is also located just above a nice-looking H4 Quasimodo support at 1.1722. However, do keep in mind that you may have to contend with potential weekly selling at that point.
• Short: While a short looks appealing below October’s opening level on the H4 timeframe, remain aware that you’d effectively be selling directly into a daily demand! Furthermore, it is difficult to judge weekly direction as weekly price is likely filling stops below the current weekly support zone as we write, which could lead to a rotation back to the upside!
Data points to consider: US employment figures at 1.30pm; US prelim UoM consumer sentiment at 3pm GMT.
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