E/U: 1.26 will be the key level to watch by Mary McNamara

The E/U monthly candle has a long way until it closes but is currently printing a bullish-reversal ‘Hammer’ candle. The pair made a bullish triangle breakout on the 4hr chart at the end of last week and managed a close back above 1.25. The key level to watch now is 1.26 as any close and hold above this would suggest there could be some continuation move ahead.

 There is a more detailed review of this pair in my w/e analysis however the E/U is now approaching a significant S/R zone which may mark a turning point for the pair.

E/U 4hr: showing the bullish triangle breakout and weekly close above 1.25:

EU4

E/U monthly: the November candle is currently printing a bullish-reversal ‘Hammer’ candle.

EUmonthlyCloud

E/U daily: the daily chart shows that the 1.26 level will be the key level to watch. This has been strong S/R in its own right but this level also intersects with the bear trend line from the descending wedge pattern. This wedge has contained price for almost 5 months and, so, any break and hold above this trend line would be a significant and bullish achievement. The 50% fib of the latest bear move would see price back up near the daily 200 EMA at the 1.32 level and this would be an obvious first target for any bullish move.

EUdaily

E/U 4hr Cloud: the E/U is still below the daily Cloud for now BUT a break of the 1.26 region would tie in with a breakout from the 4hr Cloud which would add support to this trade idea:

EU4hrCloud

USDX 4hr: there has been a bit of USD weakness to start off the Asian session and if this continues it would help to support the E/U:

USDX4

Summary: watch for any close and hold above the 1.26 level on the E/U as this would suggest bullish continuation. Any bullish momentum would primarily be underpinned by a tired ‘long USD’ trade scenario rather than any fundamental EUR shift.

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