EURUSD Weekly Technical Outlook
As noted last week, over the past three months, the pair has been largely northbound. However, generally, over the the past two years the price action has been within a horizontal channel or range (Khaki colour). On the weekly time frame, during May and June this year, price action went primarily sideways for five weeks. Two weeks ago, it moved away from its sideways mode and headed north with a relatively large bullish candlestick, falling shy of 1.16159, the high of May 2016 by about 172 pips. Last week, an attempt to move price beyond the previous week’s high failed and the ultimate price action resulted in a hammer-like candlestick on the weekly time frame at an area adjoining the monthly pivot. This is a bullish signal but the momentum is weak.
On the daily time frame, the most recent price action was within a significant S/R zone which it could not breach. Price action is respecting a support trendline (navy colour) from the low of April 6, 2017 and we may expect a pullback to the trendline, perhaps around the 1.13280 area, before any further upward move. A successful break of the zone is likely to target the next resistance around the 1.16100 area. However, should price break the trendline southward, a likely target is the immediate support around the 1.12270 area. Such a move would be likely corrective in nature.
On the H4 time frame, price action is operating in a range (bound by two magenta-coloured horizontal lines). Most recent price action has moved upwards and distally, respecting an inner ascending/support trendline with buyers very much in control of the most recent sessions. This move may break the range northward and target the immediate major resistance around the 1.16100 area. A retracement to test the trendline may take place before further northward move gets an increased momentum.
I may be wrong. Trade safe and prosper.