EUR/USD Outlook (11July - 15July 2011)
Despite of the positive fundamentals from Germany last Wednesday which showed an increase in the factory orders, which was better than expectations, the EUR/USD depreciated strongly since there were fears that Greece is just postponing its bankruptcy but not getting rid of it.
And what make things getting worse! When Moody’s downgraded the credit rating for Portugal’s debt by four points from Baa1 to Ba2, which caused a wave of panic in the financial markets and gave traders a reason to believe that the debt crisis is much deeper and deeper than anyone might think and seriously dangerous.
Technically, according to the daily chart, we still in a consolidation phase, trapped inside the triangle, since the bias is bearish in nearest term testing the lower line of the triangle at 1.4150/ 1.4102, a clear break below 1.4102 would open the door for further bearish pressure testing 1.4000 key support area, if the support level - 1.3968 – is taken out, I guess the next target would be around 1.3350 level!!
I recommend waiting for a clear break up/down, the market usually pulls-back to broken level before continuing its journey up/down?!!
Very important : The last bullish breakout on daily was confirmed by RSI(14) at 1.4795 the high of 27 April 2011 , since this level was taken out by buyers the next day , so the market was supposed to be ready for a big consolidation by testing one of these areas 1.4493 - low of 26 April , 1.4156 - low of 18 April 20100 , 1.4026 - low of 28 March 2011 , before going up again towards 1.5500 levels , the market already finished testing these levels add to that RSI on daily is above the 30 line , then the bullish scenario still strong and on the horizon , unless we have a daily RSI close below the 30 line , I guess this is supposed to happen around 1.3700/800 levels , then the market would pullback for the last time towards 1.4000/100 before the big fall towards 1.3000 levels , if the last scenario happens , the EURO needs at least 4 months to recover and back towards 1.4000 levels...so we need to watch the daily RSI ?!!!
Monthly support and resistance levels: (July 2011)
Resistance: (1.4680) main, where correction is possible, break would test (1.4885), the next levels are (1.5095) and (1.5300)…For buyers the bullish zone is above 1.4680
Support :( 1.4265) main, where correction is possible, break would test (1.4060), the next levels are (1.3850) and (1.3640)…For sellers, the bearish zone is below (1.4265)...
The neutral zone is between (1.4265 - 1.4680) where it is recommended to evaluate activities on daily and weekly.
The pivot level for this month is (1.4475)…
Monthly : use weekly and daily close ;
Above 1.4680 very bullish trend..
Between 1.4475 - 1.4680 light bullish trend.
Between 1.4475 - 1.4265 light bearish trend...
Below 1.4265 very bearish trend...
If we have a weekly close below 1.4265 , the market may drop/test 1.4885 very soon ?!!
Weekly support and resistance levels: (11 Jul - 15 Jul 2011)
Resistance: (1.4335) main, where correction is possible, break would test (1.4460), the next levels are (1.4580) and (1.4705)…For buyers the bullish zone is above 1.4335
Support :( 1.4090) main, where correction is possible, break would test (1.3965), the next levels are (1.3840) and (1.3715)…For sellers, the bearish zone is below (1.4090)...
The neutral zone is between (1.4090 - 1.4335) where it is recommended to evaluate activities on 60 min and 240 min.
The pivot level for this week is (1.4215)…
Weekly :use 1 hour and (4 hour ..recommended).
Above 1.4335 very bullish trend..
Between 1.4215 - 1.4335 light bullish trend.
Between 1.4090 - 1.4215 light bearish trend..
Below 1.4090 very bearish trend..
Trend Direction is Downward , the trend will remain valid as long as stability is below1.4390, 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 observing trading today and following the daily updates for more confirmations !
Best Regards
Haitham653
Monday 11 July 2011 08:36 AM
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Comment by Haitham653 on July 11, 2011 at 9:27am -
Update:
Bearish breakout has been confirmed on 1 hour chart , a bullish correction on the horizon towards 1.4200/20 before falling again towards 1.4102!!
If the market fails to pullback from 1.4200/20 , then it will be heading towards 1.4335/1.4460 very soon !!!
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Comment by Aleksandr on July 11, 2011 at 12:38pm -
But on friday you said buy on 4285 to target 1.4370 minimum and now we drop,I do not understand(((
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Comment by Haitham653 on July 11, 2011 at 12:54pm
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The bearish breakout confirmed at 1.4125 , on 1 hour chart , today is Monday , the market opened on a gap , so it's so normal / usual to pullback to the nearest resistance level , but the market was unable to pullback , in 90% the market pulls-back to the nearest resistance level , once it fails - unfortunately we missed the trade- this could be an indicator for trend change ?!!so
All this fall may be a trap !!! I'll wait for the daily close ?!!
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Comment by Haitham653 on July 11, 2011 at 1:00pm
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excuse me Aleksander , I didn't say that , you can check my post here , I said buy with an hourly close above 1.4370 the market didn't break above this level ?!! also I've said a four hour close below 1.4220 will drop the pair !!
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Comment by Toni on July 11, 2011 at 1:16pm
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I have retained from your earlier post that if the pair in daily chart close above 50 EMA, which is above 1.4285 than we might have had some bullish momentum. This hasn't happened, so you are OK Haitham.
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Comment by Aleksandr on July 11, 2011 at 3:13pm
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ok,thanks and sorry me.
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Comment by Haitham653 on July 11, 2011 at 5:27pm
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Hello Toni..
I guess I'm very OK..I said according to EMA 50 on daily , if we have a daily close above 1.4285 we have a bullish momentum , especially if it followed by several closes above EMA50 on daily , and the market couldn't move this far, also I've said last Friday buy with an hourly close above 1.4370 which the market was unable to reach and declined strongly from 1.4365 ..so what's wrong with that ?!!!
Remember we were in a consolidation phase , I've said this too many times in my previous posts , so the market was expected to move up or down....
Remember: missing a trade is better than losing one , and not every day is good day for trading
so far the market is ruled by rumors and fears , so any thing may happen now , any good announcement from EURO leaders may take the pair up and strongly and it may happen any moment ?!!
but we need to watch the daily close for today ?!! it's very important !!!
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Comment by Haitham653 on July 12, 2011 at 12:19am
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According to the hourly chart a consolation phase on the horizon before the next move ?!!
it suggests a pullback towards 1.4070 or 1.4125/1.4140 , with such a volatility , it's so hard to confirm the pullback area ?!!
The 4 hour shows we are in strong downtrend , and further down-move still on the horizon ?!!
The daily candle has already closed 1.4038 , but it still above 1.4000 level ?!!
In nearest term CCI confirmed the bearish breakout on daily chart but I like to see a daily close below 1.4985 , it would confirm the breakout !!!
But it also -CCI- suggests a pullback towards EMA 50 on 4 hour before the next drop ?!!
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Comment by Egbosimba christian chinedu on July 12, 2011 at 12:33pm
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haitham you re to good,best of lucks
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Comment by Haitham653 on July 12, 2011 at 1:57pm
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Hello everyone , sorry for not posting anything today!!!
here is the latest updates for EUR/USD today Tuesday 12 July 2011
The EUR/USD kept falling sharply for the second day and tested 1.3836 this morning affected by expectations and comments , that EURO leader might leave Greece default on some of its bonds.
Even these are expectations - rumors - they spread panic in the financial markets which caused the shares indices to decline sharply yesterday and that was the reason for the strong drop that happened yesterday and today ?!!
I've already heard some news that EURO leaders have a new agenda for aiding Greece , and the most important is that they are almost ready for big financial aids - around 200 billions EUROS - for Greece and they have a solution for the debt crisis in EURO ZONE !!According to the technical analysis , the pair broke through the triangle , and its under strong pressure especially below 1.4150 ?!!
BUT the most important thing that needs to be watched now is ; the daily close ! GMT close !
Yesterday's low was 1.3985 , if we have a daily close below it , the pair will continue dropping strongly, it may stop around 1.3751 or continue dropping !!
If we have a daily close above 1.3985 , the pair will range for awhile , then test the area around 1.4102 before falling towards 1.3751 !!
According to the weekly and monthly chart , we are so close from the support of the uptrend channel , it's around 1.3750 ...so the pair may stop falling about this level , we'll talk about that with more details with charts tomorrow morning ?!!
Best Regards
Haitham653
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