EUR/USD technical outlook and review...
Risk appetite engulfed the markets during Monday’s sessions, forcing the DXY beneath the 95.00 mark. The shared currency, as you can see, established firm support off the 1.16 handle on the H4 timeframe, underpinned by a strong German IFO survey. This led to the candles arriving at a strong area of H4 (red) resistance at 1.1705/1.1675 (comprised of June’s opening level at 1.1705, 1.17 handle, August’s opening level at 1.1686 and July’s opening level at 1.1675).
The story on the bigger picture, however, shows both weekly and daily action approaching significant areas of resistance plotted just above the current H4 resistance area. Weekly price is trading within a stone’s throw away from a resistance area planted at 1.1717-1.1862, while daily flow is seen nearing resistance at 1.1723.
Areas of consideration:
Although the red area of H4 resistance houses a number of resistances, trading short from here is considered chancy given higher-timeframe direction.
The safer, more conservative, area for shorts, therefore, may be the H4 supply zone printed at 1.1762-1.1732, given it is located within the walls of the weekly resistance area and positioned only 10 pips above the current daily resistance level. Stops can be sited above the upper edge of the H4 supply, with traders then likely looking for price to push below 1.17 in order to reduce risk to breakeven and take partial profits off the table.
Today’s data points: US CB consumer confidence.
The story on the bigger picture, however, shows both weekly and daily action approaching significant areas of resistance plotted just above the current H4 resistance area. Weekly price is trading within a stone’s throw away from a resistance area planted at 1.1717-1.1862, while daily flow is seen nearing resistance at 1.1723.
Areas of consideration:
Although the red area of H4 resistance houses a number of resistances, trading short from here is considered chancy given higher-timeframe direction.
The safer, more conservative, area for shorts, therefore, may be the H4 supply zone printed at 1.1762-1.1732, given it is located within the walls of the weekly resistance area and positioned only 10 pips above the current daily resistance level. Stops can be sited above the upper edge of the H4 supply, with traders then likely looking for price to push below 1.17 in order to reduce risk to breakeven and take partial profits off the table.
Today’s data points: US CB consumer confidence.
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