EUR/USD: Technical outlook and review...
The EUR/USD bulls went on the offensive during yesterday’s segment, running through both the H4 resistance area at 1.1372-1.1390, as well as the 1.14 handle. Influenced by lower-than-expected US ADP non-farm employment numbers and weekly unemployment figures, the major managed to end the day forming a nice-looking daily full-bodied bullish candle.
While we agree that the bulls look incredibly aggressive at this time, traders may want to note that weekly flow remains loitering within the walls of a major supply zone drawn from 1.1533-1.1278 that has capped upside since May 2015. Furthermore, we also see a strong-looking daily resistance level overhead at 1.1468. Therefore, the bears still clearly have a hand in this fight!
Our suggestions: Based on the above findings, our desk has their eye on a H4 supply zone positioned just above the 1.1450 mid-level line at 1.1529-1.1484 (seen higher on the screen) for potential shorts. Why this area? Well, we can see that it’s located within the upper boundary of the said weekly supply zone, thus should we trade it, we can place stops above the weekly supply. What’s more, it is positioned just above the aforementioned daily resistance line, and also of interest is how fresh the H4 supply zone is!
In addition, stop-loss orders above 1.1450 and the daily resistance line at 1.1464 will, should price strike our H4 supply, likely provide enough liquidity for the big boys to sell, and this is exactly where we want to be!
Data points to consider: US Employment figures at 1.30pm, US Fed Monetary policy report at 4pm GMT+1.
While we agree that the bulls look incredibly aggressive at this time, traders may want to note that weekly flow remains loitering within the walls of a major supply zone drawn from 1.1533-1.1278 that has capped upside since May 2015. Furthermore, we also see a strong-looking daily resistance level overhead at 1.1468. Therefore, the bears still clearly have a hand in this fight!
Our suggestions: Based on the above findings, our desk has their eye on a H4 supply zone positioned just above the 1.1450 mid-level line at 1.1529-1.1484 (seen higher on the screen) for potential shorts. Why this area? Well, we can see that it’s located within the upper boundary of the said weekly supply zone, thus should we trade it, we can place stops above the weekly supply. What’s more, it is positioned just above the aforementioned daily resistance line, and also of interest is how fresh the H4 supply zone is!
In addition, stop-loss orders above 1.1450 and the daily resistance line at 1.1464 will, should price strike our H4 supply, likely provide enough liquidity for the big boys to sell, and this is exactly where we want to be!
Data points to consider: US Employment figures at 1.30pm, US Fed Monetary policy report at 4pm GMT+1.
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