EURUSD is flirting with the top of the "no-fly zone" and has put in a top just shy of the Monthly M4, the predicted high for the month.
Price rejected the 1.15800 level, or 20 pips shy of the 1.16000 even handle which isn't a surprise, and has subsequently retraced back down to previous minor S&R together with dynamic support found in the 1HR 55-EMA.
Observations at this minor support level:
Mr. Draghi's ECB monetary policy statement is due tomorrow (Thursday 20th July), and I wouldn't be surprised to see price back at the 1.15800 level before selling off on his comments.
Risks to this trade: Continued USD weakness and potential ECB tightening of policy, although with Eurozone inflation softening to 1.3% ahead of the ECB meeting and a strengthening Euro, can the ECB really start to tighten policy?
Price rejected the 1.15800 level, or 20 pips shy of the 1.16000 even handle which isn't a surprise, and has subsequently retraced back down to previous minor S&R together with dynamic support found in the 1HR 55-EMA.
Observations at this minor support level:
- Stochastics are well into oversold territory and have turned back up into the trade zone
- 14-period RSI has broken down through the upwards trendline, suggesting one last push up before a reversal
- 5-period RSI is well into oversold territory, suggesting short term bullish bias considering the longer term up-trend
- Price falling back to the 55-EMA suggests a double top at previous resistance
- DXY has found support at 94.50 (Weekly M1, Monthly S1)
Mr. Draghi's ECB monetary policy statement is due tomorrow (Thursday 20th July), and I wouldn't be surprised to see price back at the 1.15800 level before selling off on his comments.
Risks to this trade: Continued USD weakness and potential ECB tightening of policy, although with Eurozone inflation softening to 1.3% ahead of the ECB meeting and a strengthening Euro, can the ECB really start to tighten policy?
If we can break above 1.15350 then we should be clear up to 1.15800-1.16000.