Thoughts on the EUR chart this morning...
Across the board, we saw the US dollar fade from highs of 101.78 on Monday (see the US dollar index), consequently sending the shared currency over 100 pips north. Leaving the H4 Quasimodo support at 1.0518 unchallenged, several H4 resistances were consumed during yesterday’s bullish assault. The major ended the day claiming the H4 supply area at 1.0629-1.0616 (now an acting demand base), and possibly opened up the gates for further upside today toward 1.07.
With H4 structure in mind, both the weekly and daily charts also show space to advance north. The closest obstacle can be seen on the daily scale around 1.0710: a resistance level. On top of this, we can also see that yesterday’s rally chalked up a nice-looking daily bullish engulfing candle, which to candlestick traders is likely to be considered a buy signal.
Therefore, the H4 candles may, knowing that there is little standing in the way on the bigger picture, decide to extend north today, targeting the 1.07 handle. This barrier, as you can see, fuses beautifully with the 50.0% Fib resistance and is suitably positioned just ahead of the above noted daily resistance line.
Our suggestions: While a long from the current H4 demand base is tempting given that the higher-timeframe path is clear, we would still recommend waiting for at least a reasonably sized H4 bull candle to form before pulling the trigger. Furthermore, holding this position beyond the 1.07 handle is risky, in our opinion. The reason being is due to the confluence surrounding this number as mentioned above, and as such would be considered a viable sell zone!
Data points to consider: German ZEW Economic Sentiment at 10am, followed by US Import Prices at 1.30pm GMT.
Levels to watch/live orders:
• Buys: 1.0629-1.0616 (reasonably sized H4 bullish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
With H4 structure in mind, both the weekly and daily charts also show space to advance north. The closest obstacle can be seen on the daily scale around 1.0710: a resistance level. On top of this, we can also see that yesterday’s rally chalked up a nice-looking daily bullish engulfing candle, which to candlestick traders is likely to be considered a buy signal.
Therefore, the H4 candles may, knowing that there is little standing in the way on the bigger picture, decide to extend north today, targeting the 1.07 handle. This barrier, as you can see, fuses beautifully with the 50.0% Fib resistance and is suitably positioned just ahead of the above noted daily resistance line.
Our suggestions: While a long from the current H4 demand base is tempting given that the higher-timeframe path is clear, we would still recommend waiting for at least a reasonably sized H4 bull candle to form before pulling the trigger. Furthermore, holding this position beyond the 1.07 handle is risky, in our opinion. The reason being is due to the confluence surrounding this number as mentioned above, and as such would be considered a viable sell zone!
Data points to consider: German ZEW Economic Sentiment at 10am, followed by US Import Prices at 1.30pm GMT.
Levels to watch/live orders:
• Buys: 1.0629-1.0616 (reasonably sized H4 bullish close required prior to pulling the trigger, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
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