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| Daily Double Top |
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| 4-hour Euro Chart |
On Friday the Euro moved up to the 61.80 % fib extension (A-B at C). Today, market bounced back from this resistance level. The monthly pivot and daily 20 SMA (purple line) currently act as support. The low of January at 1.2624 (orange line) and the low of August 2010 at 1.2588 (purple line) are key levels.
On the 4-hour chart (left) we see that the Euro respected the orange line and the 4-hour 10-SMA (red line). However, after the close of the bearish 4-hour candle at 12 a.m. (red circle-left) (Timing setup) the Euro fell below the orange line/ 10 SMA.
On the 1 hour chart (below) we see that the 12 a.m. hourly candle (A) respected the daily pivot at 1.2598. The 1 p.m. candle penetrated the pivot point and respected the weekly pivot at 1.2586 and the purple line (August 2010 low) but closed above the daily pivot on the hourly chart. However, the 3 p.m. hourly candle resumed the down trend and penetrated the already touched/ respected support levels (second test). The Euro found support at the monthly pivot point.
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| 1 hour EurUsd Chart Analysis |
The price zone of the circled consolidation (blue) from Friday also provided some temporary support.
On the 5 min chart (below) we had a kind of inverted Head and Shoulder in the Asian session with the green neckline and a prolonged left shoulder at the support level of the low of January (orange line). At 11 a.m. we see a typical 3-wave consolidation at the support level (orange line) before the Euro resumed its downtrend. The duration of the consolidation is the same like the duration of the prior 5-min down swing. Most of the circled candles on the 5 min chart show how price bounced at support/ resistance.
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| 5 min Euro US Dollar chart trading |
EUR/USD: We are currently at the monthly pivot point, daily 20 SMA and August 2010 low. I dont think that much will happen today anymore. If EUR/USD is able to hold the current support these days (possible bull flag on daily) then we could have some follow through of Fridays strong candle. If market is falling below the support level then more downside is likely (possible bear flag on the hourly/4 hour chart, consolidation at support (respecting) before resuming the down trend). The hourly low of 1.2553 might be the first downside target whereby the 20 SMA on the 4-hour chart could provide some support/ No trade recommendation.
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