1.14 offering potential resistance today?

2020年7月16日

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

The month of May, as you can see, recovered off worst levels out of demand from 1.0488/1.0912 and closed firm. This prompted an extension in June to highs at 1.1422, adding 1.2% despite running into opposition at the lower ledge of nearby supply from 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).

Interestingly, July is currently crossing paths with the aforesaid trendline resistance.

With reference to the primary trend, the pair has exhibited lower peaks and troughs since 2008.

Daily timeframe:

Partially altered from previous analysis -

The month of June observed EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern. The base is comprised of an 88.6% Fib level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 (red oval).

It’s typical, in the case of bearish formations, to see traders sell PRZs and place protective stop-loss orders above the X point (1.1495). Take-profit targets fall in at the 38.2% and 61.8% Fib levels (of legs A/D) at 1.1106 and 1.0926, respectively.

After touching 1.1168 (June 19), a mild bid has been observed, which, as you can see, recently gathered traction and retested the aforesaid PRZ. Following Wednesday’s shooting star pattern, considered a bearish signal among candlestick traders, Thursday ended lower after the DXY staged a healthy recovery off daily support at 95.84.

H4 timeframe:

Partially altered from previous analysis -

Supply at 1.1470/1.1447 made an entrance in recent trading, an area drawn from February 2019. Containing sufficient fuel to drive things back into the ascending channel between 1.1185/1.1345, Thursday welcomed a retest at channel resistance followed by a downward move.

Holding under channel resistance today has demand at 1.1324/1.1345 on the radar as the next point of consideration, with a break here unmasking neighbouring channel support.

H1 timeframe:

Dipping from peaks just ahead of the 1.1450 resistance, we took orders from 1.14 and landed things at an area of local confluence, made up of demand at 1.1361/1.1377, channel support (1.1378) and the 100-period simple moving average. Recent action reveals bullish interest in the aforesaid area, which could ultimately force a retest at the underside of 1.14.

Below demand, technical traders will be watching 1.1350 support and another base of demand coming in from 1.1323/1.1338.

Structures of Interest:

Partially altered from previous analysis -

Monthly supply at 1.1857/1.1352, neighbouring long-term trendline resistance, the daily PRZ between 1.1462/1.1395 and H4 holding things under supply from 1.1470/1.1447 and channel resistance puts across a robust ceiling in this market.

H1 demand at 1.1361/1.1377 faces considerable higher timeframe pressure. Though with intraday buyers showing intent from the zone right now, this could be enough to draw 1.14 into the frame for potential selling opportunities, in line with the bigger picture.