EUR/USD: Analyzing the Daily Chart

In this weekend look at the EUR/USD currency pair we will be looking at the daily chart.  It provides a longer term perspective than the time frame looked at in the analysis I publish each night.

No major levels were broken during the week, namely 1.3800 or 1.3265.  If 1.3800 is breached in the upcoming week targets are 1.3900, 1.4200 and 1.4300. A move back lower and a penetration of 1.3265 indicates another leg down with a target of 1.3060.

Trading remains choppy with no strong directional bias.  The downtrend was broken at the begining of the previous trading week.  Old trendlines often continue to hold significance even after they are broken.  The downward (broken) trendline has been left on the chart as it may provide support near Fridays low which just approached the trendline level.

Other important levels are the swing highs and lows and market with horizontal lines.  Targets for a move outside this trading region are marked with ellipses.

A move back below the trendline, which will come in just above 1.3420 on Monday, indicates downward pressure and a retest of the 1.3300 region.  Penetration of the two previous swings lows is likely to be the catalyst to take us to the downside target area.

Ability to remains above that trendline indicates some Euro stability, but the rate needs to move back above 1.3700 and then 1.3800 to indicate any sort of uptrend.

The average  (14) weekly price for the is 297 pips.

Longer term trend traders are likely better off allowing the market to breakout instead of trying to pick a direction at this point.  If the initial wave of a trend is missed, there are generally 2 more waves of even greater magnitude which provide safer trades and more reward.  False breakouts remains likely the current environment.

Cheers,

Cory Mitchell, CMT
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