Nice-looking sell zone around 1.2053/1.20
Weekly gain/loss: +1.16%
Weekly closing price: 1.1929
The shared currency enjoyed another successful week, increasing its worth by an additional 140 pips into the close. The weekly supply area at 1.1880-1.1777 (now acting support zone) was demolished as a result of the recent upside move. Scope to push higher and elbow into weekly resistance at 1.2044 could, therefore, be a possibility this week.
Turning our focus to the daily timeframe, it can clearly be seen that the euro established a base of support around the daily trendline extended from the high 1.2092. What followed from here, as you can see, was three days of strong buying, shaped by near-full bodied bull candles, which ended the week outmuscling daily resistance coming in at 1.1878 (now acting support). The other key thing to note is that beyond this daily level we do not see much in the way of active supply to the left of current price until we reach the aforementioned weekly resistance. In addition to this, the weekly level also coincides just beautifully with a daily AB=CD (see black arrows) 161.8% ext. point at 1.2053.
The combination of a robust euro and a deterioration of the greenback across the board forced H4 price above both the 1.19 handle and September’s opening line at 1.1913 amid Friday’s segment. As we moved into the later hours of US trading, nevertheless, the H4 candles began decelerating and mildly paring gains. This, as far as we can see, was due to the small weekend gap seen back on the 24th September.
Suggestions: Should we see a dip in early trading today, 1.19/1.1913 on the H4 timeframe will likely be brought into the spotlight. Whether this will hold or not is difficult to judge, as a few pips beneath the area sits daily support pegged at 1.1878 (anyone smell a potential fakeout here?).
A continued move to the upside, nonetheless, could see the H4 candles shake hands with channel resistance etched from the high 1.1861 and, quite possibly, the large psychological band 1.20 (located 44 pips below the aforesaid weekly resistance).
As far as we’re concerned, the trading area that offers the most quality right now is a sell zone fixed between the 1.20 line on the H4 timeframe and the weekly resistance level/AB=CD completion point at 1.2053. A full or near-full-bodied H4 bearish candle printed within this area would, in our view, be a mouthwatering setup, and one that we would have little hesitation getting involved in.
Data points to consider: US new home sales at 3pm GMT.
Weekly closing price: 1.1929
The shared currency enjoyed another successful week, increasing its worth by an additional 140 pips into the close. The weekly supply area at 1.1880-1.1777 (now acting support zone) was demolished as a result of the recent upside move. Scope to push higher and elbow into weekly resistance at 1.2044 could, therefore, be a possibility this week.
Turning our focus to the daily timeframe, it can clearly be seen that the euro established a base of support around the daily trendline extended from the high 1.2092. What followed from here, as you can see, was three days of strong buying, shaped by near-full bodied bull candles, which ended the week outmuscling daily resistance coming in at 1.1878 (now acting support). The other key thing to note is that beyond this daily level we do not see much in the way of active supply to the left of current price until we reach the aforementioned weekly resistance. In addition to this, the weekly level also coincides just beautifully with a daily AB=CD (see black arrows) 161.8% ext. point at 1.2053.
The combination of a robust euro and a deterioration of the greenback across the board forced H4 price above both the 1.19 handle and September’s opening line at 1.1913 amid Friday’s segment. As we moved into the later hours of US trading, nevertheless, the H4 candles began decelerating and mildly paring gains. This, as far as we can see, was due to the small weekend gap seen back on the 24th September.
Suggestions: Should we see a dip in early trading today, 1.19/1.1913 on the H4 timeframe will likely be brought into the spotlight. Whether this will hold or not is difficult to judge, as a few pips beneath the area sits daily support pegged at 1.1878 (anyone smell a potential fakeout here?).
A continued move to the upside, nonetheless, could see the H4 candles shake hands with channel resistance etched from the high 1.1861 and, quite possibly, the large psychological band 1.20 (located 44 pips below the aforesaid weekly resistance).
As far as we’re concerned, the trading area that offers the most quality right now is a sell zone fixed between the 1.20 line on the H4 timeframe and the weekly resistance level/AB=CD completion point at 1.2053. A full or near-full-bodied H4 bearish candle printed within this area would, in our view, be a mouthwatering setup, and one that we would have little hesitation getting involved in.
Data points to consider: US new home sales at 3pm GMT.
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