Bearish strategies south of 1.13 in the offing...

2020年7月9日

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

The month of May, as you can see, recovered off worst levels out of demand from 1.0488/1.0912 and closed firm.

June extended gains to highs at 1.1422 and finished adding 1.19%, despite running into opposition at the lower ledge of nearby supply from 1.1857/1.1352 mid-month (unites with long-term trendline resistance [1.6038]).

July is currently seen toying with the aforesaid supply.

With reference to the primary trend, the pair has exhibited clear lower peaks and troughs since 2008.

Daily timeframe:

Partially altered from previous analysis -

The month of June observed EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern. The base is comprised of an 88.6% Fib level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 (red oval). It’s typical, in the case of bearish formations, to see traders sell PRZs and place protective stop-loss orders above the X point (1.1495). Common take-profit targets fall in at the 38.2% and 61.8% Fib levels (of legs A/D) at 1.1106 and 1.0926, respectively.

As you can see, traders remain undecided right now, leaving sellers in a precarious situation as the aforementioned Fib targets have yet to be met.

H4 timeframe:

Resistance at 1.1348 came under fire Thursday, though buyers were unable to muster enough strength to draw in neighbouring supply located at 1.1415/1.1376. This led to an impulsive decline, listing channel support (prior resistance - 1.1422) back in view. Levels of interest under the aforesaid channel has the July 3 low at 1.1219 to target, as well as demand at 1.1189/1.1158 (prior supply).

H1 timeframe:

Heading into US trading Thursday, intraday price movement unwound from levels just under 1.1350 in dominant fashion, as the US dollar index stamped in a relatively impressive recovery. After dethroning demand at 1.1316/1.1306, price went on to tackle the 1.13 level and 100-period simple moving average, with price now bound for lows around 1.1265 and demand at 1.1239/1.1251, an area bringing with it 1.1250 support.

Beyond 1.1239/1.1251, eyes will be on demand at 1.1181/1.1202 and the 1.12 level.

Structures of Interest:

According to the above, sellers appear to have the advantage heading into Friday.

Consequently, intraday sellers may make a show under 1.13 today, headed for the 1.1250 neighbourhood (and H1 demand at 1.1239/1.1251), which happens to align closely with channel support on the H4 timeframe. Movement beyond H1 demand at 1.1239/1.1251 will look to H1 demand at 1.1181/1.1202 (and the 1.12 level).