Upside is likely to find a cap
EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April spent the best part of the month feasting on the top edge of demand from 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June extending gains and recently reconnecting with the lower ledge of supply at 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
Last week had EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]), and rotate lower into the week’s end. In addition to the bearish configuration, the RSI indicator recently exited overbought territory.
It’s common to see traders sell PRZs and place protective stop-loss orders above the X point, in this case at 1.1495. Common targets fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A/D) at 1.1106 and 1.0926, respectively.
Despite this, Monday came back in force, reclaiming Friday’s losses and closing just off best levels.
H4 timeframe:
After candles dipped through 1.1241 (June 9 low), running local sell-stop liquidity, we ended the week testing support at 1.1226.
The aforesaid support, sponsored by the US dollar index dipping to lower levels, prompted a recovery, maybe charting the way to supply at 1.1415/1.1376, an area boasting a connection to the daily PRZ structure.
H1 timeframe:
Although somewhat swimming against the tide (higher-timeframe areas), buyers, after Friday completed an intraday ABCD pattern (where legs AB equal CD) at 1.1211 that prompted a recovery marginally above 1.1250, made it through 1.13 Monday.
Above 1.13, price met up with the 100-period simple moving average and 61.8% Fib ret level at 1.1331 (taken from legs A/D). Note 1.1331 represents the second take-profit target out of the ABCD pattern – this is a point you may see traders cover long positions.
RSI traders will also note the value is fast approaching overbought status.
Structures of Interest:
Overall, according to monthly supply at 1.1857/1.1352, as well as the daily harmonic bat pattern’s PRZ capping upside, intraday buying may eventually fade.
H4 supply at 1.1415/1.1376 is an area worthy of attention as a possible upside cap and may attract bearish signals. Though before reaching this area, a H1 dip through 1.13 from the 61.8% Fib ret level at 1.1331 could also be in store, with 1.1250 in line as an initial target.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April spent the best part of the month feasting on the top edge of demand from 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June extending gains and recently reconnecting with the lower ledge of supply at 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
Last week had EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]), and rotate lower into the week’s end. In addition to the bearish configuration, the RSI indicator recently exited overbought territory.
It’s common to see traders sell PRZs and place protective stop-loss orders above the X point, in this case at 1.1495. Common targets fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A/D) at 1.1106 and 1.0926, respectively.
Despite this, Monday came back in force, reclaiming Friday’s losses and closing just off best levels.
H4 timeframe:
After candles dipped through 1.1241 (June 9 low), running local sell-stop liquidity, we ended the week testing support at 1.1226.
The aforesaid support, sponsored by the US dollar index dipping to lower levels, prompted a recovery, maybe charting the way to supply at 1.1415/1.1376, an area boasting a connection to the daily PRZ structure.
H1 timeframe:
Although somewhat swimming against the tide (higher-timeframe areas), buyers, after Friday completed an intraday ABCD pattern (where legs AB equal CD) at 1.1211 that prompted a recovery marginally above 1.1250, made it through 1.13 Monday.
Above 1.13, price met up with the 100-period simple moving average and 61.8% Fib ret level at 1.1331 (taken from legs A/D). Note 1.1331 represents the second take-profit target out of the ABCD pattern – this is a point you may see traders cover long positions.
RSI traders will also note the value is fast approaching overbought status.
Structures of Interest:
Overall, according to monthly supply at 1.1857/1.1352, as well as the daily harmonic bat pattern’s PRZ capping upside, intraday buying may eventually fade.
H4 supply at 1.1415/1.1376 is an area worthy of attention as a possible upside cap and may attract bearish signals. Though before reaching this area, a H1 dip through 1.13 from the 61.8% Fib ret level at 1.1331 could also be in store, with 1.1250 in line as an initial target.
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