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I’m going to get started today on the Euro versus the US Dollar [EURUSD]. Starting here on the Daily Chart, we could see that this currency pair has been in an uptrend for quite some time. We go all the way back into July of 2013. We began the uptrend – bottom left-hand side of the chart – and we’ve continued to see higher highs and higher lows over the past several months. Even recently, last week, we’ve seen a new high made as the market pressured all the way into the upper-1.3900s at the top of the chart.
However, over the past few days, we’ve seen the market holding in this pink-shaded area up here at the top of the chart. The high was very temporary. It spiked up there into the 1.3960s, fell quickly back down. Currently the market holding underneath the 1.3900-level. The pink-shaded area goes between 1.3913 and 1.3890. That’s the pink-shaded area you see up here at the top of the chart. And as you can see, since last week, we have held here as resistance with that one spike pushing all the way up into the upper-1.3900s.
So, for this week, as long as we stay underneath this pink-shaded area, I expect we could be looking for some intraday reversal. Falls back down into support. Likely could even see a push all the way back down into the low-1.3800s. Along where the red trend line is, we see some Fibonacci there. We also see the historical highs from previous resistance sitting there into the 1.3800-level. It’s a level that should be familiar if you’ve been listening to the analysis over the past few weeks. The 1.3830-level was a .618 Fibonacci retracement level from the Weekly Chart, and we’ve talked about resistance there until we broke above it. Then, once we broke above it, we now would expect support there.
So here’s the way it’s going to shape up for the week for me. Here into the pink-shaded area, the 1.3900-level or lower, we could be looking for resistance and a fall back down into support, which sits down here towards the 1.3800-level. All in all, if it breaks above 1.3900 and we see it open and close on the Daily Chart any time this week above 1.3900 – the pink-shaded area -, we’ll likely look for a continuation of the uptrend. Reversals come if we breakdown through 1.3800 and the red trend line. So, underneath the yellow-shaded area, the red trend line, we’ll likely look for some reversal back down to the 1.3600s for the EURUSD.
So, right now we’re concentrating on support, the 1.3800, resistance, 1.3900. Potential intraday bounces back down towards support. Green trend bar with the Forex Black Book tells us that of course we are in an uptrend bias. That’s not too hard to see with the red trend line there and here on the Daily Chart. Your best lowest-risk opportunities to buy this currency pair in the direction of the Forex Black Book green trend bar and of course the trend would be dips into support. Dips back down towards 1.3800 becomes your lowest risk and highest potential reward opportunities.
As long as it holds underneath the pink-shaded area at the top, there’s risk that it continues to find resistance falls back down. So, I’m not really excited about buying it today. As long as we stay underneath 1.3900, more likely I’m watching for clues to reversal and opportunities to sell this currency pair.
Let’s go back down to the 4-Hour Chart. And if you were in the Trade Room on Friday, you’ll know that we sold this currency pair in the Trade Room on Friday right around the 1.3920-level. Particularly because we were challenging into the bank flow levels. Take a look at Friday’s bank flow levels between 1.3917, 1.3929, and the cap was all the way up here into 1.3947. Those were the bank flow levels. They came out during the Trade Room on Friday. Took a sell there.
If you decide to sell right around the 1.3923-level, where I sold it, of course Friday, before the market closed, you were able to see a little bit of a dip. Probably about 40 or 45 pips on the fall from Friday. Currently sitting about 35 pips if you’re still holding sells from the 1.3923-level. So, you should at least be protecting profit on those sells. Of course today our bank flow levels may dictate another opportunity to sell this currency pair into resistance. Again, as long as it holds underneath, within and underneath this pink-shaded area, I’m looking for intraday resistance. Falls back down are support, which could, again, be all the way back down into the low-1.3800s, down here towards the blue trend line, the red trend line, and the yellow-shaded area.
All again, nothing really different here on the 4-Hour than it is on the Daily Chart. Just gives us a little closer view. A break back above the bank flow levels, back above the pink zone, we look for it to go higher. So we’re closer to resistance, further from support. Dips into support become opportunities to buy in the direction of the trend, and I think likely back down towards the 1.3800-level. 1.3830 maybe would be the best opportunities for that.
Let’s take Fibonacci one time here on this chart. And I’m going to go from the low down here, bottom left-hand side of the chart. All the way down at the low to the current resistance high. And in doing that, we could see that the .236 fib is our current support. We could see the market has tested there last week as support into the 1.3850-level. So, between 1.3850, 1.3830, there’s potential support for the intraday. Again, we’re all the way up here into 1.3890, 1.3900 right now, so you’re closer to resistance, further away from support. Your best opportunities may, for the day, be selling into resistance.
We’ll definitely watch for today’s bank flow levels. I would expect that as long as we hold underneath 1.3900, the bank flow levels today would be very similar to Friday’s levels. We’ve sat here, again, into the low-1.3900s. So, bank flow levels today potentially – this is mere speculation at this point, but potentially here just above 1.3900. Above the pink-shaded area, implying resistance and selling pressure at least for the temporary time being for a fall back down for the EURUSD. Then of course, as it challenges back down to 1.3800, at any point, we could be looking for new opportunities for support and buying in the direction of the trend for the EURUSD this week.
