1.0650 is firmly on our radar for longs this morning...

7 févr. 2017

The EUR continued to sag against its US counterpart yesterday, as the US dollar advanced against the majority of its trading peers. H4 demand at 1.0684-1.0709 along with the 1.07 psychological handle housed within, were both wiped out, allowing price to clock a low of 1.0656 and retest the aforementioned H4 broken demand as a resistance area.

From a technical perspective, the weekly timeframe is trading with a reasonably strong downside bias at the moment. With the weekly resistance at 1.0819 holding firm, the next support target on tap falls in at around a weekly support area drawn from 1.0333-1.0502. While this may be true, we also have to take into consideration the fact that the daily candles are now seen checking in with a daily demand base at 1.0589-1.0662.

Our suggestions: Although weekly price indicates further selling may be on the cards, we really like the look of the H4 mid-way support at 1.0650. This level boasts a H4 AB=CD 161.8% ext. at 1.0637, a deep 88.6% retracement at 1.0644, a H4 trendline support etched from the low 1.0589 (yellow zone) and is seen positioned within the above noted daily demand area. One could also say that there’s a possible H4 three-drive approach in play as well. Ideally, we’ll be looking to enter just above 161.8% ext. today, with stops placed 2-3 pips below the H4 Quasimodo support at 1.0621. That way, should a fakeout be seen beyond the 161.8% ext. there’s another H4 trendline seen just below (1.0579) to support our trade. Just to be clear here, we are not looking for a reversal off this area. A bounce is all that’s expected due to what’s been noted on the weekly timeframe.

Data points to consider: There are no scheduled high-impacting news events on the docket today relating to these two markets.