In recent sessions, the EUR/USD extended its bounce from the H4 Quasimodo support level at 1.1722, taking out October’s opening level seen on the H4 timeframe at 1.1788 and also the 1.18 handle. The Federal Reserve, as expected, increased its benchmark interest rate by 25bps to 1.50%. However, as far as we can see, the US dollar was sold on the fact that the rate hike was priced in. Furthermore, the fact that the Fed’s optimistic growth forecast for 2018 is based on the assumption that the government will fiscally stimulate the economy has not gone down well with investors.
The break above the 1.18 handle placed the H4 mid-level resistance at 1.1850 in sight. Yesterday’s push higher has also ‘confirmed’ buyer interest from the daily demand pegged at 1.1712-1.1757. Continued buying from this area will likely see the candles shake hands with daily resistance at 1.1878. Over on the weekly timeframe, the weekly support area at 1.1880-1.1777 is now back in the fight, despite dipping to lows of 1.1717.
Direction:
• Long: A retest of 1.18 could provide traders a platform to buy. As most are aware, though, psychological bands are prone to whipsaws. Therefore, a fakeout below 1.18 into October’s opening level mentioned above at 1.1788 is a strong possibility, so do be prepared for this! Should one manage to pin down a long from 1.1788/1.18, the first take-profit target could be set at 1.1850, followed closely by the daily resistance level at 1.1878.
• Short: All three timeframes point to further buying.
Data points to consider: French flash manufacturing PMI at 8am; German flash manufacturing PMI at 8.30am; Euro flash manufacturing PMI at 9am; ECB press conference at 1.30pm; US retail sales m/m and weekly unemployment claims at 1.30pm GMT.
Areas worthy of attention:
Supports: 1.1722; 1.18 handle; 1.1788; 1.1880-1.1777; 1.1712-1.1757.
Resistances: 1.1850; 1.1878.
The break above the 1.18 handle placed the H4 mid-level resistance at 1.1850 in sight. Yesterday’s push higher has also ‘confirmed’ buyer interest from the daily demand pegged at 1.1712-1.1757. Continued buying from this area will likely see the candles shake hands with daily resistance at 1.1878. Over on the weekly timeframe, the weekly support area at 1.1880-1.1777 is now back in the fight, despite dipping to lows of 1.1717.
Direction:
• Long: A retest of 1.18 could provide traders a platform to buy. As most are aware, though, psychological bands are prone to whipsaws. Therefore, a fakeout below 1.18 into October’s opening level mentioned above at 1.1788 is a strong possibility, so do be prepared for this! Should one manage to pin down a long from 1.1788/1.18, the first take-profit target could be set at 1.1850, followed closely by the daily resistance level at 1.1878.
• Short: All three timeframes point to further buying.
Data points to consider: French flash manufacturing PMI at 8am; German flash manufacturing PMI at 8.30am; Euro flash manufacturing PMI at 9am; ECB press conference at 1.30pm; US retail sales m/m and weekly unemployment claims at 1.30pm GMT.
Areas worthy of attention:
Supports: 1.1722; 1.18 handle; 1.1788; 1.1880-1.1777; 1.1712-1.1757.
Resistances: 1.1850; 1.1878.
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