EUR/USD suggesting we could be heading lower

5 мая 2020 г.

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 demand-turned supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [0.6038]) and demand at 1.0488/1.0912.

April, as you can see, spent the best part of the month feasting on the top edge of 1.0488/1.0912, though did manage to squeeze out a Japanese hammer candlestick pattern, viewed as a bullish reversal signal. May, on the other hand, is currently tunnelling back into the said demand.

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

Daily timeframe:

Partially altered from previous analysis -

Following Friday eclipsing April 15 high at 1.0990, a move that missed the 200-day simple moving average (SMA) at 1.1031 by a hair, EUR/USD retreated further Tuesday.

This positions the 78.6% Fib level at 1.0745 back in the frame, with a break here underscoring demand at 1.0526/1.0638, an area extended from March 2017.

H4 timeframe:

Partially altered from previous analysis -

After toppling supply-turned demand at 1.0906/1.0878, EUR/USD once again found itself on the back foot yesterday.

Candlestick traders will note price action retested the underside of 1.0906/1.0878 and produced what appears to be a shooting star Japanese candlestick pattern. Ongoing downside from this angle shifts focus to a trendline resistance-turned support (1.1147).

H1 timeframe:

Intraday movement found thin air above the 100-period simple moving average (SMA) at 1.0914 on Tuesday and proceeded to derail orders at 1.09 and trend line support (1.0727). The pair remains on precarious ground as 1.0850 is seen capping upside, threatening the possibility of a drop to 1.08.

To the upside, nonetheless, traders may want to keep an eye on trendline resistance (1.1018).

Structures of Interest:

Taking into account where EUR/USD is positioned on each timeframe, 1.0850 may hold as resistance today and see price make a run for at least 1.08. Notably, 1.08 also happens to coincide closely with the current H4 trendline support.