Daily bearish engulfing candle likely to give way
EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
March, evident from the monthly chart, left behind a long-legged doji indecision candle, with its extremes crossing paths with heavyweight demand-turned supply at 1.1857/1.1352 and demand at 1.0488/1.0912.
The technical foundation has April rangebound between the two aforementioned price structures; notably, however, the current monthly candle is nearly 1% lower, testing the upper boundary of 1.0488/1.0912.
The primary downtrend has remained in motion since 2008, exhibiting clear lower peaks and troughs.
Daily timeframe:
Partially altered from previous analysis -
Buoyed on the back of a 78.6%/61.8% Fib zone at 1.0745/1.0830 (pink), EUR/USD experienced a surge in demand over the course of the week. Northbound, the 200-day simple moving average (SMA) at 1.1060 offers a layer of resistance. Supply at 1.1239/1.1179 also remains a prominent fixture on this timeframe, sited just north of a 61.8% Fib level at 1.1171 and intersecting with trendline resistance (1.0879).
In addition to this, traders may find interest in supply coming in from 1.1323/1.1268, having seen a potential AB=CD correction point terminate at 1.1276 (orange). Traders will note, however, Monday concluded by way of a bearish engulfing formation.
H4 timeframe:
Sellers moderately strengthened their grip Monday, following a shooting star Japanese candlestick pattern (bearish signal) from the underside of supply at 1.1044/1.0966, accompanied with a nearby 50% retracement at 1.0954 and a 127.2% Fib ext. level at 1.0973.
Continued pressure to the downside could eventually see the candles address support at 1.0831, a level that offered support Wednesday last week.
H1 timeframe:
Early London Monday observed a run of stops north of 1.0950, testing highs of 1.0967 before collapsing to 1.09. Joined with a channel support from 1.0768 and a 100-period SMA, there’s a chance buyers may attempt to lift things higher from here, possibly bringing 1.0950 back into the frame.
Though with the RSI indicator circulating sub 50.00, a move lower could be on the cards, with 1.0850 offering reasonably well-grounded support.
Structures of Interest:
Monthly price rebounding from demand at 1.0488/1.0912, together with daily price printing a solid recovery from 1.0745/1.0830 last week, potentially sets the stage for further upside and somewhat negates Monday’s bearish engulfing formation. The 200-day SMA rests as an initial upside target on the bigger picture.
Having noted higher-timeframe flow echoing a bullish vibe, 1.09 may remain a supportive structure on the H1 timeframe, while H4 price might struggle to cross paths with support at 1.0831. Therefore, long opportunities from 1.09 could be an idea worthy of consideration today.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
March, evident from the monthly chart, left behind a long-legged doji indecision candle, with its extremes crossing paths with heavyweight demand-turned supply at 1.1857/1.1352 and demand at 1.0488/1.0912.
The technical foundation has April rangebound between the two aforementioned price structures; notably, however, the current monthly candle is nearly 1% lower, testing the upper boundary of 1.0488/1.0912.
The primary downtrend has remained in motion since 2008, exhibiting clear lower peaks and troughs.
Daily timeframe:
Partially altered from previous analysis -
Buoyed on the back of a 78.6%/61.8% Fib zone at 1.0745/1.0830 (pink), EUR/USD experienced a surge in demand over the course of the week. Northbound, the 200-day simple moving average (SMA) at 1.1060 offers a layer of resistance. Supply at 1.1239/1.1179 also remains a prominent fixture on this timeframe, sited just north of a 61.8% Fib level at 1.1171 and intersecting with trendline resistance (1.0879).
In addition to this, traders may find interest in supply coming in from 1.1323/1.1268, having seen a potential AB=CD correction point terminate at 1.1276 (orange). Traders will note, however, Monday concluded by way of a bearish engulfing formation.
H4 timeframe:
Sellers moderately strengthened their grip Monday, following a shooting star Japanese candlestick pattern (bearish signal) from the underside of supply at 1.1044/1.0966, accompanied with a nearby 50% retracement at 1.0954 and a 127.2% Fib ext. level at 1.0973.
Continued pressure to the downside could eventually see the candles address support at 1.0831, a level that offered support Wednesday last week.
H1 timeframe:
Early London Monday observed a run of stops north of 1.0950, testing highs of 1.0967 before collapsing to 1.09. Joined with a channel support from 1.0768 and a 100-period SMA, there’s a chance buyers may attempt to lift things higher from here, possibly bringing 1.0950 back into the frame.
Though with the RSI indicator circulating sub 50.00, a move lower could be on the cards, with 1.0850 offering reasonably well-grounded support.
Structures of Interest:
Monthly price rebounding from demand at 1.0488/1.0912, together with daily price printing a solid recovery from 1.0745/1.0830 last week, potentially sets the stage for further upside and somewhat negates Monday’s bearish engulfing formation. The 200-day SMA rests as an initial upside target on the bigger picture.
Having noted higher-timeframe flow echoing a bullish vibe, 1.09 may remain a supportive structure on the H1 timeframe, while H4 price might struggle to cross paths with support at 1.0831. Therefore, long opportunities from 1.09 could be an idea worthy of consideration today.
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