EURUSD bulls are on the move today. The single currency is testing the new resistance area between 1.1840 and 1.1875. These are two levels we have been keeping a close eye on since early September.
You may recall the September 25th break of ascending channel support. This was a significant development for the pair. Not only was the uptrend broken on this day, but the single currency also printed the first lower (swing) low since April.
Then on Friday, buyers found support at 1.1670. We’ve had this level on our radar since the EURUSD caught a bid here in mid-August. It was also our target following the breakdown on the 25th of September (see link above).
With the September breakdown fresh in our minds and our key levels drawn, this becomes a waiting game.
Apparently, Euro bulls are intent on pushing for a retest of the 1.1875 handle. The 1.1840 level was tested as resistance early this morning but has since broken down on a 4-hour closing basis.
A study of the daily time frame shows what could be the formation of a head and shoulders pattern. The left shoulder developed in early August while the head of the structure was carved out between August 29 and September 22.
Whether or not the pair forms the right shoulder is anyone’s guess. Furthermore, without a daily close below 1.1670, we can’t technically call it a head and shoulders pattern. Until that day comes, this isn’t much more than a talking point.
For now, I’m going to keep an eye on how price reacts to 1.1875. A bearish signal from current levels could take us back down to 1.1670 support and perhaps 1.1490.
Alternatively, a daily close (5 pm EST) above 1.1875 would (at minimum) delay the bearish scenario I just described. It would also expose the next key resistance at 1.2040.
Keep in mind that the FOMC meeting minutes are to be released today at 2 pm EST. Then on Thursday, we have PPI and U.S. unemployment claims at 8:30 am EST followed by Friday’s CPI and retail sales at the same time.
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Thank you Sir for the heads up.
You’re welcome.
Thanks you, watching it for sometime.
Anytime, Souheil.
If we draw channel which was going down till october 6, cant we say it is broken now?
Sorry, I’m not sure what you’re referring to.
Thank you Justin
My pleasure.
Yes could be head and shoulders developing. On the sidelines for now.
We’ll find out soon enough.
Very useful, Thank you
You’re welcome. Cheers.
Thanks sir
You’re welcome.
Thank you JUSTN…Thank you…very much!
You’re welcome. Happy to help.
How about situation of EUAUD sir?
It’s holding above former wedge resistance for now. We’ll see if it holds as new support.
https://dailypriceaction.com/weekly-forex-forecast/october-2-6-2017
tks you ^^
Anytime, cheers.
1.16996 buy – it’s been a good performer since
Seems like it. Thanks for sharing.
Thank you for information head up
From Laos country
It’s my pleasure. Welcome from Laos.
I set sell at 1.187 , thanks
Cheers.
You wrote: “My initial entry was a few pips above 1.2040 just before the completion of the September 8th bearish pin bar”. Can you explain why you sell? why did’t wait for completion of the pin bar?
The market was overextended so it was a fairly low-risk entry. It was also a small position. The rest was added after the pair closed below 1.2040.
Thank you for answering my question. i could understand the entry, buy how about stoploss? or have no stoploss?
Thank you for answering my question. i could understand the entry,. But you sell above 1.2040 (key resistant). there is no price action after the completion of the September 8th bearish pin bar. so, with the entry, where is stoploss or have no stoploss?
Terimakasih pak justin,,,apakah setelah melihat candle di hari kamis bisa di pastikan menuju 1.20xx
Very well spotted. Indeed Friday’s bearish pinbar gives us a hint that we target up to 1.16700. Thanks!
Euro is still bullish and its going to touch 11970 with support this week being 11780
Justin as always your tutorial are very helpful. Thanks a lot. A small question/comment from me: I have seen an outside bar near resistance (1.18956) on the 4 hr chart. On my opinion this indicates a move down.