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EURUSD to Face New Round of Selling Pressure Below 1.1875
-
By
Justin Bennett
- / October 11, 2017
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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Leave a Comment:
34 comments
Thank you Sir for the heads up.
ReplyYou’re welcome.
ReplyThanks you, watching it for sometime.
ReplyAnytime, Souheil.
ReplyIf we draw channel which was going down till october 6, cant we say it is broken now?
ReplySorry, I’m not sure what you’re referring to.
ReplyThank you Justin
ReplyMy pleasure.
ReplyYes could be head and shoulders developing. On the sidelines for now.
ReplyWe’ll find out soon enough.
ReplyVery useful, Thank you
ReplyYou’re welcome. Cheers.
ReplyThanks sir
ReplyYou’re welcome.
ReplyThank you JUSTN…Thank you…very much!
ReplyYou’re welcome. Happy to help.
ReplyHow about situation of EUAUD sir?
ReplyIt’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
Replytks you ^^
ReplyAnytime, cheers.
Reply1.16996 buy – it’s been a good performer since
ReplySeems like it. Thanks for sharing.
ReplyThank you for information head up
ReplyFrom Laos country
It’s my pleasure. Welcome from Laos.
ReplyI set sell at 1.187 , thanks
ReplyCheers.
ReplyYou 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?
ReplyThe 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.
ReplyThank you for answering my question. i could understand the entry, buy how about stoploss? or have no stoploss?
ReplyThank 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?
ReplyTerimakasih pak justin,,,apakah setelah melihat candle di hari kamis bisa di pastikan menuju 1.20xx
ReplyVery well spotted. Indeed Friday’s bearish pinbar gives us a hint that we target up to 1.16700. Thanks!
ReplyEuro is still bullish and its going to touch 11970 with support this week being 11780
ReplyJustin 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.
Reply