EUR/USD tech outlook and review following ECB movement...
The EUR, as you can see, stamped in a rather savage-looking selling wick ahead of yesterday’s ECB press conference, surpassing both the 1.08 handle and a nearby H4 resistance at 1.0830, with the unit managing to clock highs of 1.0873. Following the ECB’s decision to extend the QE program till Dec 2017, but at a gentler pace, this sent the single currency screaming lower. Ripping through the 1.07 barrier and its nearby H4 support at 1.0685, the major ended the day shaking hands with the 1.06 handle.
Amid the increased volatility the pair hit the 2016 yearly opening level at 1.0873 (a to-the-pip reaction), before collapsing lower. This has now positioned weekly action within striking distance of a support area drawn from 1.0333-1.0502. Looking down to the daily candles, the next support target appears to be the triple-bottom formation at 1.0520, followed closely by a Quasimodo support carved from 1.0494.
Our suggestions: Considering that the1.06 barrier is bolstered by December’s opening level at 1.0590, there’s a chance that we may see a bullish rotation from this neighborhood today. Be that as it may, a long from this vicinity places one in an awkward spot, since there is little higher-timeframe structure reinforcing this area. In that the daily candle looks somewhat poised to extend lower today, we’ll humbly pass on longs from 1.06, but this is not to say a trade from here will not work out!
Should a H4 close be seen below both 1.06 and the December opening level, followed by a retest of this zone as resistance, we may, dependent on how the lower timeframe action behaves, look to sell, targeting the H4 mid-way support at 1.0550, followed by the daily triple bottom at 1.0520 and then the 1.05 handle!
Data points to consider: University of Michigan consumer sentiment survey due for release at 3pm GMT.
Amid the increased volatility the pair hit the 2016 yearly opening level at 1.0873 (a to-the-pip reaction), before collapsing lower. This has now positioned weekly action within striking distance of a support area drawn from 1.0333-1.0502. Looking down to the daily candles, the next support target appears to be the triple-bottom formation at 1.0520, followed closely by a Quasimodo support carved from 1.0494.
Our suggestions: Considering that the1.06 barrier is bolstered by December’s opening level at 1.0590, there’s a chance that we may see a bullish rotation from this neighborhood today. Be that as it may, a long from this vicinity places one in an awkward spot, since there is little higher-timeframe structure reinforcing this area. In that the daily candle looks somewhat poised to extend lower today, we’ll humbly pass on longs from 1.06, but this is not to say a trade from here will not work out!
Should a H4 close be seen below both 1.06 and the December opening level, followed by a retest of this zone as resistance, we may, dependent on how the lower timeframe action behaves, look to sell, targeting the H4 mid-way support at 1.0550, followed by the daily triple bottom at 1.0520 and then the 1.05 handle!
Data points to consider: University of Michigan consumer sentiment survey due for release at 3pm GMT.
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