EUR/USD: Technical outlook and review.
The EUR/USD couple declined for a third consecutive day amid yesterday’s trade, resulting in price taking out 1.1072 and slam dunking itself into 4hr demand at 1.1009-1.1039. This is no doubt a very tempting place for traders to buy. Nevertheless, our team has decided to pass on this this zone, since room to continue south is being seen on both the weekly and daily charts at the moment. Near-term support on the weekly scale comes in around the ascending weekly trendline taken from the low 1.0461, while on the daily scale; downside support is not expected until around the 1.0892 mark. In addition to this, with the large psychological 4hr support 1.1000 lurking just below the current 4hr demand zone, there is a high possibility that price will fake lower to connect with bids in and around this region.
Given the points made above, our attention will mostly be driven toward shorts today. ‘Sell the dips’ is a phrase that comes to mind here! And that is exactly what we plan on doing.
Sell zones to keep an eye on are as follows:
1. The mid-level hurdle 1.1050.
2. 4hr supply at 1.1092-1.1074 – be prepared for a fake higher here to 1.1100 though.
3. 4hr supply at 1.1123-1.1107.
We would certainly not advise trading the above areas using pending orders. The safest, and in our opinion, the most logical approach, would be to wait for some sort of lower timeframe selling confirmation before deciding to risk capital. With regards to targets, we intend on playing it speed bump-by speed bump. What we mean by that is, at each supportive structure price hits on the 4hr timeframe following your entry, watch to see how the lower timeframes react. If bullish, consider closing some of your position. In the event that our analysis is correct, one could potentially do this all the way down to the daily Quasimodo support level we highlighted above at 1.0892.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1050 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1.1092-1.1074 Tentative – confirmation required (Stop loss: dependent on where one confirms this area) 1.1123-1.1107 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
Given the points made above, our attention will mostly be driven toward shorts today. ‘Sell the dips’ is a phrase that comes to mind here! And that is exactly what we plan on doing.
Sell zones to keep an eye on are as follows:
1. The mid-level hurdle 1.1050.
2. 4hr supply at 1.1092-1.1074 – be prepared for a fake higher here to 1.1100 though.
3. 4hr supply at 1.1123-1.1107.
We would certainly not advise trading the above areas using pending orders. The safest, and in our opinion, the most logical approach, would be to wait for some sort of lower timeframe selling confirmation before deciding to risk capital. With regards to targets, we intend on playing it speed bump-by speed bump. What we mean by that is, at each supportive structure price hits on the 4hr timeframe following your entry, watch to see how the lower timeframes react. If bullish, consider closing some of your position. In the event that our analysis is correct, one could potentially do this all the way down to the daily Quasimodo support level we highlighted above at 1.0892.
Levels to watch/live orders:
• Buys: Flat (Stop loss: N/A).
• Sells: 1.1050 Tentative – confirmation required (Stop loss: dependent on where one confirms this level) 1.1092-1.1074 Tentative – confirmation required (Stop loss: dependent on where one confirms this area) 1.1123-1.1107 Tentative – confirmation required (Stop loss: dependent on where one confirms this area).
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