Weekend technical: EURUSDs bearish break. Months from the extensive range too.




Range for month is no longer the 3 lowest ever recorded. YippeeComing in the last trading week, the eur / usd pair traded with a 211 pip trading range for the week (see the post talking about it here). With a week and 2 days of trading up to a new month, if the price stayed within this range, it represents the 3rd lowest range since the beginning of the EURUSD trading in 1999.

When the beaches are exceptionally low for a period (day, week, or month), it is a trade good idea to look for an extension. If you find spots that would give a bullish or bearish indicator.
In the negotiation of this week, the first clue was more optimistic. The support to the holding of the 1.716-24. Then, the price moved above the 100 bar MA on the 4-hour chart.
However, this is what happened to the 100 bar MA on the 4-hour chart, and a swing area at t1.1822-37, which has turned the beat around.
To that MY and ares, the price tested the 200 bar MA on the 4-hour chart for the 8th time (see green numbered circles) and propped against a swing area too (red numbered circles).
The technical resistance blocked at the right place and the declaration of the ECB and mario Draghi’s presser sent the pair south through the 100 days (in blue at the bottom to 1.16787) and by the 6 October low at 1.1669. It was a pause button.
Anyway, the sale continued on Friday, with the pair heading back down towards the end of the day to 1.1573. There was a last hour of the week to bounce back to 1.1600, but the sellers remain in control.
What is the next step?
Thus, the increase of the downward trend, it is that the price has fallen below the neckline of the head and shoulders on the daily chart. The measured value of the target would be to take the price down, down to the daily 200 MA (green line at 1.1246 currently). With the price around 1.1600, that would be ambitious, but it is on trader’s minds
Other targets in the daily chart (see red circle on the daily chart below):

  • 1.1477-88 zone. Swing low and high
  • The 38.2% of the 2017, the trading range (as of January 2017 low) to 1.1422. That would be a key supporting role in the new week
  • 1.1392. This is the other side of the broken trend line (see daily chart). It moves more every day
  • 1.1282-1.13098. It is the yellow swing zone on the daily chart
  • 200 days at 1.1246. (also, near the H&S measured in the area).

  • This would keep the downtrend in tact (or, conversely, the market back to the upside)?
    All the drop targets are discredited, if the price of the next week it starts trading above the brokenness of the old swing low for the month 1.16689, and at the back above the 100 day MA at 1.16787 (it will be a little higher on the Monday). A movement above this area, would also discredit the breaking of the neckline on the daily chart.
    A movement above this area, and the shorts should start to cover on the great rupture of the failure. One could rather see a rotation higher.
    Find a strong support against the one of the targets, could also put the price around a bit. I expect that the 38.2% to 1.1422 should provide a good support on the first test. Are looking for buying on a dip from here with the chance for a modest correction. However, if the level is broken look for stops and a continuation of the downward momentum.
    In the end, when/if the 200 days is being tested, look for strong buyers.



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