EUR/USD chart (4-hour timeframe)
Salam and Good Day,
Looking at the EUR/USD chart (4-hour timeframe), here are a few technical insights that can help forecast the next potential action:
1. Symmetrical Triangle Formation:
The chart shows a symmetrical triangle pattern, with the price narrowing between the upper and lower trendlines. This suggests consolidation of price, where neither the bulls nor the bears are currently in full control.
Symmetrical triangles are typically continuation patterns, meaning that the market is likely to break out in the direction of the prior trend. In this case, a break to the downside could be possible since the trend leading into the triangle was downward.
2. Key Support and Resistance Levels:
The price is currently testing the upper trendline resistance near the 1.11200–1.11300 area.
If the price fails to break above this resistance, we could see a rejection and move toward the lower trendline, which is acting as support, around 1.0835.
On the other hand, a decisive breakout above the upper trendline could signal a potential upward rally, with the next key resistance at 1.1200–1.1250.
3. Liquidity Swings and Market Structure:
There are several liquidity points (labelled in red) on the chart. These represent areas where significant trading volumes occurred, which might act as resistance or support.
The latest price action shows a retest of previous liquidity, suggesting a potential pullback, but the extent of this pullback remains uncertain.
4. MACD Momentum Indicator:
The MACD (12, 26) below the chart shows a slight bullish crossover, indicating positive momentum in the short term. However, the strength of this move remains modest, and if the signal lines flatten out or cross back down, it could indicate a return to bearish momentum.
5. Potential Forecast:
Scenario 1 (Bullish Breakout): If the price breaks above the upper trendline, it may move towards 1.1200–1.1250, continuing a bullish rally. A strong breakout with increased volume will support this scenario.
Scenario 2 (Bearish Rejection): If the price faces rejection at the upper trendline, it might move downward toward the lower trendline (around 1.0835), which could trigger a further test of this support level. A break below this level could indicate further downside movement.
Conclusion:
The EUR/USD is currently in a consolidation phase within a symmetrical triangle, and the market is awaiting a breakout. Traders should watch for a decisive breakout above the upper trendline or a rejection leading to a move toward the lower support levels. Momentum indicators like the MACD will indicate whether the breakout will be bullish or bearish.
Happy trading and trade wisely guys
Regards
Mustaqim Mazuky
Independent Trader / Investor
Looking at the EUR/USD chart (4-hour timeframe), here are a few technical insights that can help forecast the next potential action:
1. Symmetrical Triangle Formation:
The chart shows a symmetrical triangle pattern, with the price narrowing between the upper and lower trendlines. This suggests consolidation of price, where neither the bulls nor the bears are currently in full control.
Symmetrical triangles are typically continuation patterns, meaning that the market is likely to break out in the direction of the prior trend. In this case, a break to the downside could be possible since the trend leading into the triangle was downward.
2. Key Support and Resistance Levels:
The price is currently testing the upper trendline resistance near the 1.11200–1.11300 area.
If the price fails to break above this resistance, we could see a rejection and move toward the lower trendline, which is acting as support, around 1.0835.
On the other hand, a decisive breakout above the upper trendline could signal a potential upward rally, with the next key resistance at 1.1200–1.1250.
3. Liquidity Swings and Market Structure:
There are several liquidity points (labelled in red) on the chart. These represent areas where significant trading volumes occurred, which might act as resistance or support.
The latest price action shows a retest of previous liquidity, suggesting a potential pullback, but the extent of this pullback remains uncertain.
4. MACD Momentum Indicator:
The MACD (12, 26) below the chart shows a slight bullish crossover, indicating positive momentum in the short term. However, the strength of this move remains modest, and if the signal lines flatten out or cross back down, it could indicate a return to bearish momentum.
5. Potential Forecast:
Scenario 1 (Bullish Breakout): If the price breaks above the upper trendline, it may move towards 1.1200–1.1250, continuing a bullish rally. A strong breakout with increased volume will support this scenario.
Scenario 2 (Bearish Rejection): If the price faces rejection at the upper trendline, it might move downward toward the lower trendline (around 1.0835), which could trigger a further test of this support level. A break below this level could indicate further downside movement.
Conclusion:
The EUR/USD is currently in a consolidation phase within a symmetrical triangle, and the market is awaiting a breakout. Traders should watch for a decisive breakout above the upper trendline or a rejection leading to a move toward the lower support levels. Momentum indicators like the MACD will indicate whether the breakout will be bullish or bearish.
Happy trading and trade wisely guys
Regards
Mustaqim Mazuky
Independent Trader / Investor
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