Weekly

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

Daily

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

EUR/USD – 1.1789

Although the single currency fell to as low as 1.1730 late last week, the quick rebound from there suggests consolidation above this level would be seen and initial upside risk remains for another bounce to the Tenkan-Sen (now at 1.1835), however, reckon resistance at 1.1877-79 would limit upside and bring another decline later, below said support at 1.1730 would signal the fall from 1.1961 top is still in progress and bring test of 1.1713 support. Once this level is penetrated, this would signal the rebound from 1.1554 has ended, bring further fall to 1.1650-60, then towards 1.1600 but said support at 1.1554 should remain intact.

On the upside, whilst recovery to the Tenkan-Sen (now at 1.1835) cannot be ruled out, reckon upside would be limited to 1.1900 and bring another decline to aforesaid downside targets. Above indicated resistance at 1.1940 would risk retest of recent high at 1.1961 but only break there would signal the rise from 1.1554 is still in progress and extend gain to 1.2005. Looking ahead, above there would confirm recent upmove has resumed for retest of 1.2093, break there would extend the rise from 1.0340 low to 1.12150-55 first.

Recommendation: Sell at 1.1880 for 1.1680 with stop above 1.1980.

On the weekly chart, as euro has retreated after faltering below resistance at 1.1961, retaining our view that further consolidation below this level would be seen and below 1.1730 would bring test of previous support at 1.1713 but break there is needed to signal the rebound from 1.1554 has ended, bring weakness to 1.1650-60, then towards said support at 1.1554 which is likely to hold from here. A drop below said support at 1.1554 would signal a temporary top has been formed at 1.2093, bring retracement of recent rise to 1.1500, then 1.1466 (50% Fibonacci retracement of 1.0839-1.2093) but reckon downside would be limited to 1.1400 and 1.1312-18 (previous support and 61.8% Fibonacci retracement) should hold, price should stay above previous minor resistance at 1.1296, bring another rebound.

On the upside, expect recovery to be limited to 1.1880-85 and resistance at 1.1940 should hold, bring another retreat. Above said resistance at 1.1961 would revive bullishness and signal early pullback from 1.2093 has ended at 1.1554, bring further gain to 1.2005, once this level is penetrated, this would confirm early rise from 1.0340 low has resumed for retest of 1.2093, above there would extend headway to 1.2150-55, then 1.2200-10 later.

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