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EUR/USD Candlesticks and Ichimoku Analysis

Weekly

  • Last Candlesticks pattern: Shooting star 
  • Time of formation: 03 May 2016
  • Trend bias: Down

Daily

  • Last Candlesticks pattern: Shooting star
  • Time of formation: 3 May 2016
  • Trend bias: Sideways

EUR/USD – 1.0633

As the single currency has staged another strong rebound after holding above previous support at 1.0493, a long white candlestick was formed on Friday and suggesting further consolidation above this level would be seen and test of the Kijun-Sen (now at 1.0661) cannot be ruled out, however, a daily close above resistance at 1.0714 is needed to signal the pullback from 1.0829 top has ended at 1.0493 earlier, bring further gain to1.0745-50 first but price should falter well below said resistance at 1.0829.

On the downside, whilst pullback to 1.0580 cannot be ruled out, reckon downside would be limited to 1.0520 and bring another rebound later. Only a drop below support at 1.0493 would signal the fall from 1.0829 top is still in progress for further weakness to support at 1.0454 but a sustained breach below there is needed to signal the rebound from 1.0340 (Jan low) has ended, bring further fall to 1.0400 and later retest of said support which is likely to hold from here.

Recommendation: Buy at 1.0580 for 1.0780 with stop below 1.0480.

On the weekly chart, euro continued finding support around 1.0493 and has recovered and consolidation above this level would be seen, hence gain to 1.0630-35 cannot be ruled out, however, reckon upside would be limited to 1.0700-05 and 1.0770-80 should hold, bring further consolidation. Only break of resistance at 1.0829 would suggest another leg of rise from 1.0340 low is underway, bring retracement of early decline to previous resistance at 1.0873 and later 1.0930-35 (61.8% Fibonacci retracement of 1.1300-1.0340) but reckon 1.1000 would limit upside and price should falter below 1.1050-60.

On the downside, although pullback to 1.0570-80 is likely, reckon said support at 1.0493-96 would remain intact, bring another rebound later. A drop below 1.0493-96 would extend the retreat from 1.0829 towards key support at 1.0454 but a sustained breach below this level is needed to signal the rebound from 1.0340 has ended, then further fall to 1.0390-00 and later retest of this January low would follow.

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