Our take on the EUR this week...
Weekly gain/loss: - 67 pips
Weekly closing price: 1.0589
Last week’s action shows that the EUR/USD extended its pullback from the 2016 yearly opening level at 1.0873, which could force the major to test the 2017 yearly opening level at 1.0515/support area at 1.0333-1.0502 sometime this week. With this area having been a considerable support and resistance zone in this market since late 1997, selling pressure is expected to diminish here.
Despite weekly price indicating further downside may be on the cards, daily action is seen testing a trendline support etched from a low of 1.0340, which happens to be positioned directly above a demand base at 1.0525-1.0576. While this area has a good chance of repelling price, it may be worth taking into consideration that the mentioned 2017 yearly opening level sits just beneath here, thus, a fakeout through this zone is a real possibility.
Following Friday’s lower-than-expected US non-farm payrolls print at 98k, a slightly upbeat unemployment rate at 4.5% and average hourly earnings coming in as expected at 0.2%, the single currency aggressively spiked northbound and tested April’s opening level at 1.0659. As can be seen on the H4 chart, buyers failed to sustain gains beyond this point and ended the day touching fresh lows beyond the 1.06 handle.
Our suggestions: A long from March’s opening level seen at 1.0569 is certainly something to consider, given how it fuses with the nearby daily trendline support/daily demand area. With this being said however, there are two cautionary points to consider. Firstly, as explained above, the weekly chart suggests further selling could be seen. Secondly, there is little H4 structure seen around March’s opening line. The closest place for stops here, in our view, is beyond the 9th March low at 1.0525! Therefore, in order to trade from here, we would advise waiting for a reasonably sized H4 bull candle to take shape, and place stops beyond its tail. The first take-profit from this angle can be seen at 1.06, followed closely by the resistance area planted at 1.0607-1.0632.
Data points to consider: Fed Chair Yellen speaks at the University of Michigan at 9.10pm GMT.
Levels to watch/live orders:
• Buys: 1.0569 region (waiting for a reasonably sized H4 bullish rotation candle to form before pulling the trigger is advised, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
Weekly closing price: 1.0589
Last week’s action shows that the EUR/USD extended its pullback from the 2016 yearly opening level at 1.0873, which could force the major to test the 2017 yearly opening level at 1.0515/support area at 1.0333-1.0502 sometime this week. With this area having been a considerable support and resistance zone in this market since late 1997, selling pressure is expected to diminish here.
Despite weekly price indicating further downside may be on the cards, daily action is seen testing a trendline support etched from a low of 1.0340, which happens to be positioned directly above a demand base at 1.0525-1.0576. While this area has a good chance of repelling price, it may be worth taking into consideration that the mentioned 2017 yearly opening level sits just beneath here, thus, a fakeout through this zone is a real possibility.
Following Friday’s lower-than-expected US non-farm payrolls print at 98k, a slightly upbeat unemployment rate at 4.5% and average hourly earnings coming in as expected at 0.2%, the single currency aggressively spiked northbound and tested April’s opening level at 1.0659. As can be seen on the H4 chart, buyers failed to sustain gains beyond this point and ended the day touching fresh lows beyond the 1.06 handle.
Our suggestions: A long from March’s opening level seen at 1.0569 is certainly something to consider, given how it fuses with the nearby daily trendline support/daily demand area. With this being said however, there are two cautionary points to consider. Firstly, as explained above, the weekly chart suggests further selling could be seen. Secondly, there is little H4 structure seen around March’s opening line. The closest place for stops here, in our view, is beyond the 9th March low at 1.0525! Therefore, in order to trade from here, we would advise waiting for a reasonably sized H4 bull candle to take shape, and place stops beyond its tail. The first take-profit from this angle can be seen at 1.06, followed closely by the resistance area planted at 1.0607-1.0632.
Data points to consider: Fed Chair Yellen speaks at the University of Michigan at 9.10pm GMT.
Levels to watch/live orders:
• Buys: 1.0569 region (waiting for a reasonably sized H4 bullish rotation candle to form before pulling the trigger is advised, stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).
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