1.13/1.1314 being tested, as we write - anyone for longs?
EUR/USD:
The single currency relinquished further ground to the US dollar Tuesday, recording its second consecutive daily loss. The pair met strong selling at 1.14 mid-way through London’s session and aggressively turned lower. The move was later exacerbated on hotter-than-expected US PPI numbers – US PPI rose 0.1% in November, decelerating from the 0.6% in October amid a slump in oil prices.
The US dollar index concluded the day clipping the underside of 97.50, while the EUR/USD H4 candles shook hands with a rather interesting base of support drawn from 1.13/1.1314 (green – comprised of November’s opening level at 1.1314, a trend line support (taken from the low 1.1215), a 78.6% Fibonacci support value at 1.1304 and a round number at 1.13). In addition to this, recent movement also chalked up a nice-looking AB=CD bullish pattern (black arrows) that terminates within the said green zone, therefore complementing the overall structure.
With respect to the higher timeframes, structure remains unchanged:
Weekly price turned south just ahead of resistance priced in at 1.1465, which, as you can probably see, brings with it a nearby cloned trend line resistance (extended from the high 1.2413). Further selling has demand at 1.1119-1.1212 to target. A closer reading on the daily timeframe adds a proven base of resistance circulating around the 1.1455 region. What’s appealing here, other than the fact the level capped upside three times in November and is closely linked to the weekly resistance mentioned above at 1.1465, is the merging Fibonacci resistances: a 61.8% and a 38.2% at 1.1469 and 1.1443, respectively. Note price recently turned lower just ahead of the 38.2% Fibonacci resistance. The next downside target on this scale falls in around demand at 1.1171-1.1220 (glued to the top edge of the current weekly demand area).
Areas of consideration:
Medium term, the 1.13/1.1314 region marked in green on the H4 timeframe appears a reasonable location for a bounce higher today. Why only a bounce comes down to both weekly and daily timeframes indicating a somewhat bearish vibe at the moment.
As for entry, traders have the choice of waiting for additional candlestick confirmation to form and entering based on the selected structure, or simply entering at 1.1314 and positioning stop-loss orders beneath 1.13.
1.1350 (December’s opening level) appears to be a logical starting point in terms of take-profit targets.
Today’s data points: US CPI m/m; US Core CPI m/m.
The single currency relinquished further ground to the US dollar Tuesday, recording its second consecutive daily loss. The pair met strong selling at 1.14 mid-way through London’s session and aggressively turned lower. The move was later exacerbated on hotter-than-expected US PPI numbers – US PPI rose 0.1% in November, decelerating from the 0.6% in October amid a slump in oil prices.
The US dollar index concluded the day clipping the underside of 97.50, while the EUR/USD H4 candles shook hands with a rather interesting base of support drawn from 1.13/1.1314 (green – comprised of November’s opening level at 1.1314, a trend line support (taken from the low 1.1215), a 78.6% Fibonacci support value at 1.1304 and a round number at 1.13). In addition to this, recent movement also chalked up a nice-looking AB=CD bullish pattern (black arrows) that terminates within the said green zone, therefore complementing the overall structure.
With respect to the higher timeframes, structure remains unchanged:
Weekly price turned south just ahead of resistance priced in at 1.1465, which, as you can probably see, brings with it a nearby cloned trend line resistance (extended from the high 1.2413). Further selling has demand at 1.1119-1.1212 to target. A closer reading on the daily timeframe adds a proven base of resistance circulating around the 1.1455 region. What’s appealing here, other than the fact the level capped upside three times in November and is closely linked to the weekly resistance mentioned above at 1.1465, is the merging Fibonacci resistances: a 61.8% and a 38.2% at 1.1469 and 1.1443, respectively. Note price recently turned lower just ahead of the 38.2% Fibonacci resistance. The next downside target on this scale falls in around demand at 1.1171-1.1220 (glued to the top edge of the current weekly demand area).
Areas of consideration:
Medium term, the 1.13/1.1314 region marked in green on the H4 timeframe appears a reasonable location for a bounce higher today. Why only a bounce comes down to both weekly and daily timeframes indicating a somewhat bearish vibe at the moment.
As for entry, traders have the choice of waiting for additional candlestick confirmation to form and entering based on the selected structure, or simply entering at 1.1314 and positioning stop-loss orders beneath 1.13.
1.1350 (December’s opening level) appears to be a logical starting point in terms of take-profit targets.
Today’s data points: US CPI m/m; US Core CPI m/m.
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