The EUR/USD went down strongly yesterday and breached below the major support level 1.4400 towards 1.4285 ?!!
will the pair continue falling or strong pullback on the horizon ?!!
let's take a quick look to the daily chart ?!!
Yesterday , the pair closed below EMA 50 , its low 1.4285 , what is this supposed to mean ?!
It means we have these options:
1- The pair will try to break - close - below 1.4285 , if it does , then 1.4100/1.3968 on the horizon !
2- If it does fail to break below 1.4285 , strong pullback on the horizon towards 1.4395/1.4466 , then
we need to evaluate pair's activities on 4 hour and 1 hour chart ,
a- If we have a clear break above 1.4395/1.4466 the next target is 1.4577 before heading towards 1.4720 !
b- If it fails to break above 1.4395/1.4466 then it will test 1.4285 or may be go lower towards 1.4100 ?!!
Note : If we have several daily closes above EMA 50 , it means false bearish move happened and strong move at the opposite direction on the horizon ?!!
Very Important : If you you read my weekly report we have strong monthly support at 1.4265 , may be it's not easy at all to break below this level from the first time , daily / weekly close below this level is supposed to test any of these levels 1.4060/1.3850/1.3640..BUT CCI on daily and on 1 hour suggests a strong bullish move but we need a clear break above 1.4466....
RSI on 1 hour suggests a test to the area 1.4360/1.4395 before falling towards 1.4285/36 but if it fails to decline from this level and breaks above 1.4466 , means false breakout and strong bullish move towards 1.4720 on the horizon !!!
Remember : today we have important news from EURO and U.S , the ECB will be released at 12:45 PM GMT , it supposed to take the EURO down , from U.S we have Jobless claims at 01:30 PM GMT , it supposed to take the EURO up BUT I think the most important events will come tomorrow , we have Employment Situation from U.S , it will be released at 01:30 PM GMT , it supposed to push the EURO up strongly , I guess the pair will make its big move tomorrow not today ?!!
Weekly support and resistance levels: (04 Jul - 08 Jul 2011)
Resistance: (1.4720) main, where correction is possible, break would test (1.4880), the next levels are (1.5040) and (1.5200)…For buyers the bullish zone is above 1.4720
Support :( 1.4405) main, where correction is possible, break would test (1.4245), the next levels are (1.4085) and (1.3925)…For sellers, the bearish zone is below (1.4405)...
The neutral zone is between (1.4405 - 1.4720) where it is recommended to evaluate activities on 60 min and 240 min.
The pivot level for this week is (1.4560)…
Weekly :use 1 hour and (4 hour ..recommended).
Above 1.4720 very bullish trend..
Between 1.4560 - 1.4720 light bullish trend.
Between 1.4405 - 1.4560 light bearish trend..
Below 1.4405 very bearish trend..
Trend Direction is Downward , the trend will remain valid as long as stability is below1.4410,technical targets are around 1.4250 and 1.4060 , a daily close above this level may lead for a bullish move towards 1.4550/1.4720 levels…
Recommendations : Upon the chart and the explanation posted above , my recommendation is buying the pair with an hourly closing above 1.4466 targeting 1.4580 and 1.4720 , stop loss 100 pips below your entry OR selling the pair with a daily closing below 1.4285 targeting 1.4060 and 1.3850 stop loss 100 pips above your entry !!
Thursday 07 July 2011 06:23 AM