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EUR/USD Candlesticks and Ichimoku Analysis


    •    Last Candlesticks pattern: Shooting star 
    •    Time of formation: 31 Jul 2017
    •    Trend bias: Near term up


    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 2 Aug 2017
    •    Trend bias: Up

EUR/USD – 1.1900

Although the single currency extended recent rise to 1.2070 last week, the quick retreat from there formed a shooting star bearish reversal pattern on the daily chart, suggesting consolidation below this level would be seen and consolidation with mild downside bias is seen for weakness to 1.1770-75, then test of support at 1.1740, however, reckon support at 1.1662 would hold from here, risk from there is seen for a rebound to take place later. Only a daily close below this support would suggest top has possibly been formed, bring correction of recent upmove to 1.1613 support, then test of the upper Kumo (now at 1.1532).

On the upside, expect recovery to be limited to the Tenkan-Sen (now at 1.1905) and resistance at 1.1980 (Friday’s high) would hold, bring another corrective fall later. A daily close above said resistance at 1.1980 would signal the pullback from 1.2070 has ended instead, bring further gain to 1.2000, then retest of 1.2070 and possibly 1.2100-10, however, loss of upward momentum should prevent sharp move beyond dynamic resistance at 1.2165-70 (50% Fibonacci retracement of 1.3993-1.0340) and price should falter below 1.2200-10, bring retreat later.

Recommendation: Exit long entered at 1.1870 and stand aside for this week.

On the weekly chart, despite last week’s initial rise to 1.2070, the subsequent retreat formed a black candlestick with a long upper shadow, suggesting consolidation below this level would be seen and pullback to 1.1770-75 and then 1.1740 is likely, however, reckon downside would be limited to the Tenkan-Sen (now at 1.1691) and support at 1.1662 should hold from here. A weekly close below this support would suggest a temporary top is formed, bring retracement of recent rise to 1.1610-15, then 1.1550-60 and later towards 1.1435, having said that ,downside should be limited to 1.1370 and support at 1.1312 should remain intact, bring rebound later.

On the upside, although initial recovery to 1.1940-45 cannot be ruled out, reckon Friday’s high at 1.1980 would hold from here and bring another retreat later. A weekly close above said resistance at 1.1980 would extend gain towards last week’s high at 1.2070 but break there is needed to confirm recent upmove from 1.0340 low has resumed for headway towards 1.2160-70 (50% Fibonacci retracement of 1.3993-1.0340) but loss of upward momentum should limit upside and reckon 1.2220-30 would hold, price should falter below 1.2300-10, bring another retreat later.

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