Weekly gain/loss: -0.09%
Weekly close: 1.2109
Europe’s single currency wrapped up the week mostly unmoved against its US counterpart, clutching the upper bounds of the prior week’s action.
The technical picture on the weekly chart reveals EUR/USD recently overwhelmed the 2018 yearly opening value at 1.2004, drawing out supply at 1.2420-1.2214.
In terms of trend, it seems upside remains favoured, more so if price overthrows the 1.2555 February 12 high (2018). The above implies buyers could remain at the wheel this week until testing the aforementioned supply zone.
Before reaching weekly supply, buyers must contend with daily resistance at 1.2165, a level that made an appearance at the beginning of December.
A solid rejection here shines the spotlight on support at 1.1965, a previous Quasimodo resistance. A 1.2165 break, on the other hand, swings the pendulum in favour of a run to supply drawn from 1.2344-1.2279 (sited within the parapets of current weekly supply).
Friday, as you can see, finished on the backfoot, spinning south of daily resistance underlined above at 1.2165. While 1.22 stands as the next port of resistance above 1.2165, the 1.21 handle is considered possible support, with a break shifting attention to demand plotted at 1.2040-1.2064 and trend line support, extended from the low 1.1602. What’s also technically appealing on this scale is the possible formation of an ABCD bullish pattern (red arrows) terminating at the aforementioned trend line support, around 1.2042.
Should price reach the noted demand this week, traders are also urged to pencil in the possibility of a drop to test the key figure 1.20, bracketed within a 38.2% Fibonacci retracement ratio at 1.2012 and a 161.8% Fibonacci extension point at 1.1985.
Areas of consideration:
- The uptrend remains healthy, seen clearly from both the weekly and daily timeframes.
- H4 demand at 2040-1.2064, in addition to trend line support and ABCD convergence, is an interesting point. Though pushing beyond these areas shines the spotlight on 1.20 and nearby Fibonacci studies.
- Daily resistance at 1.2165 is perhaps a level to have noted this week, due to the number of times buyers failed to overthrow the barrier.
- 1 22 is also a significant ceiling to watch, one which could entice sellers. A mild fakeout above the level, a whipsaw that not only taps into any buy-stops above 1.22 but also tests the underside of weekly supply at 1.2214 (potentially strong offers), unlocks the possibility of fresh sellers making an appearance.