EUR/USD: what a difference a day makes?

The ECB has underwhelmed the trading community with its latest easing announcement and this has sent the EUR/USD sharply higher, an outcome that I had warned about yesterday. Many are suggesting this is merely a ‘short squeeze‘ but, if NFP and FOMC also underwhelm the market, then this could be the new normal!

EURX weekly: this is how the chart of the EUR index appears after ECB. The ‘Double Bottom’ potential is still viable here:

EURXweekly

This was the chart yesterday however:

EURXweekly

EUR/USD weekly: this is how the weekly chart of the EUR/USD appears today. We may just be seeing a ‘Double Bottom’ form up here now too!

EUweekly

This was the chart as of yesterday and before ECB though:

EUweekly

Bullish targets: traders will be wondering about potential bullish targets on the EUR/USD even if this move is only a short squeeze and temporary. The following daily, weekly and monthly charts have been assessed and I’ve identified levels, based on fibs and previous price action, where price might be expected to react.

E/U daily: note how the 61.8% fib of the recent swing low move is near the Bear Flag TL and, also, near the key 1.12 level. (The 1.12 level is an important monthly-chart level as can be seen on the monthly chart):

EUdaily

E/U weekly: above 1.12 there is the previous S/R level of 1.18. Then there is the monthly chart’s triangle TL which is near the 50% fib of the weekly chart’s longer term swing low move. After that, there is the 61.8% fib up near 1.26 which is also a previous S/R level:

EUweekly

E/U monthly: The 1.12 level can be seen here circled as it is the 61.8% fib of the 2000-2007 swing high move. The monthly chart’s triangle trend line can also be seen from this chart:

EUmonthly

From analysis of these charts it is suggested that the following levels might prove to be worth watching if price does continue with any bullish pullback:

  • the 1.12 level: this is a major S/R level from the monthly chart as it is the 61.8% fib of the 2000-2007 swing high move. This also happens to be near the recent Bear Flag trend line and so would be an obvious target for any continuation move. It also happens to be the 61.8% fib of the recent daily chart-based swing low move.
  • the 1.18 level: this is major long term S/R level (seen on the monthly chart)
  • the 1.225 level: this is near the 50% fib of the recent weekly chart swing low move and also near the monthly chart’s triangle trend line.
  • the 1.26 region: this is near the 61.8% fib of the weekly chart’s swing low move.

NB: I’m having some PC issues with loading charts and suspect a virus. Weekend updates thus might be brief as this may not be resolved until next week.

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