Much has been said about EURUSD and the rally that has consumed the first four months of 2016. But for those who trade the higher time frames, this is just consolidation, and the larger downtrend is still very much intact.
Sure, the pair has managed to climb over 700 pips so far this year, but at the end of the day, the swing highs from 2015 remain untarnished. Even the recent high on May 3rd fell short of retesting the prominent August 2015 high by a sizable 100 pips.
This doesn’t mean the pair has been untradable. There has been some decent price action within the fifteen-month range between 1.1600 and 1.0500.
But at the same time, it’s important to keep things in perspective. EURUSD is range-bound after coming off a 3,500-pip landslide in 2014 and is thus vulnerable.
I mentioned the 1.1357 handle in the recent weekly forecast, noting that it was formerly 1.1340. In doing so, I received several questions asking why I made the adjustment.
My reasoning is threefold:
- It lines up with the May 10th minor swing low
- It doesn’t cut off the candlestick body from April 19th (unlike 1.1340)
- The 1.1357 level lines up with the 23.6 Fibonacci level when measuring from the May 3rd high to last week’s low
The reasons outlined above lead me to believe that any retest of 1.1357 is likely to come under considerable selling pressure. Does that mean 1.1340 is insignificant and will, therefore, fail to act as resistance?
Not quite. In fact, I’m seeing sellers flock to 1.1340 as I type this. However, it does suggest that a close above 1.1340 wouldn’t negate the bearish bias in the near-term. In my opinion, only a daily close above 1.1357 would do that.
If selling pressure picks up where Friday left off, the first key support area to come under fire would be the April low of 1.1210 followed by 1.060.
Alternatively, a daily close back above 1.1357 would signal that buyers remain in control and could ultimately expose the current 2016 high near 1.1600.
Want to see how we are trading this setup? Click here to get lifetime access.
Yes, your analysis is 100% correct. Good work done.
Thanks, Solomon. We’ll see how the level holds up over the next few sessions.
I love u. U are great. God bless you.
Pleased to know I could help, Aamir. 🙂
I have come to see that your analysis is reliable and I want in on the game. I am trading micros and am really struggling to pay my bills right now ,else I would sign up for a full membership today. I wish for the record you would send me a page or two of some recent past views of what goes on in the room for full members. Love ya man you ROCK.
Henry, thanks for your comment. However, I’m not going to post images of the member’s area here or anywhere for that matter. There is a 30-day money-back guarantee if you’re ever interested in joining.
Feel free to reach out with any questions (https://dailypriceaction.com/contact).
Your analysis 100 correct
Tnx a lot
You’re welcome, Ahmad. Glad to have helped.
Nice Analysis Justin! I am short from 1.1198, Stop Loss at 1.1230, Take Profit at 1.1140. Just trying to pick up 50-60 pips to end the week. Rationale for this trade stems from the Bearish 60 pip move down we had yesterday, That Bearish move down broke Support at 1.1210, and has been retested. The Bulls do not show signs of strength to fill that 60 Pip Gap above 1.1210. I feel next immediate Support level at 1.1150 is the next short term price objective.
John, sounds like a plan. Best of luck.