Posts have not been as frequent during the week for forex day trading analyses lately, but after a another day of down right belligerent volume on the stock market, I thought I would pay homage to our liquid friend the EUR/USD.

Early trading  this week saw the Euro move off the lows of the hurtful experience it had last week.

A drop below 1.2800 is a pivot point. Watch for a retest of the lows below 1.2750.  On the longer term we are seeing a correction, but within an overall uptrend.  The uptrend is thrown out the window with a move below 1.2700.

So far the upward trendline from the daily chart has held.  This means if the shorter time frames can show some strength by taking out swing highs from late last week the short and long term set-ups will align.

Rise above 1.2875 is likely to encounter resistance between 1.2915 and 1.2940.  Movement above that, sets up some potential aggressive buying as we will have a very short-term uptrend for action this week.  There is little resistance till 1.3070.

Last week saw aggressive selling and can’t be dismissed, even though the daily uptrend has remained intact.  Watch the pivotal levels, right now at 1.2800, 1.2700 and 1.2940.

Cheers,

Cory Mitchell, CMT

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From the close last Friday at 1.3275 to the close this week at 1.2749 the Euro lost 526 pip vs. the USD.  The range for the week, covered a distance of 558 pips indicating strong selling all week as the pair nearly opened on its weekly high and closed on its low.  As mentioned in last weeks post the pair was in the midst of a resistance region, and ultimately could not get through the upper end of it (1.3400).

The aggressive,  or secondary, upward trendline was broken early in the move, at 1.3150.  The break down of that trendline indicates a test of the primary trendline which currently runs through 1.2700.  Support at that level will keep the Euro uptrend intact, penetration of it indicates that the Euro rally is over and the longer term downtrend will continue.

A drop below 1.2730 is the first indicator of lower rates and test of 1.2700.  This will put the rate below the previous swing low (see daily chart) nullifying the uptrend.  Below 1.2700 support comes in between 1.2520 and 1.2500.  This is the target for a drop 1.2700.

The average span of prices we see in a week is 391 pips (based on 14 week average).  Therefore the target is well within what could be seen this week.

On the upside, movement up through 1.2900, 1.2950 and 1.3000 would progressively cause further rallies.  More solid resistance is expected between 1.3100-1.3150.

Keep in mind the short-term is down, longer term uptrend remains in tact – barely.

Chart below…

Cory Mitchell, CMT

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EUR/USD Daily - FreeStockCharts.com

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The Euro continues to rally, with an acceleration to the upside on Friday after the jobs number out of the US almosted doubled the concesus to the downside.  The stock market may not care to much, but the EUR/USD was definitely affected.

The pair still remains in an uptrend, and has come close to the highs of the resistance area near 1.3400.  It fell off this level as Friday progressed closing out the week at 1.3275.

Upward trendline support comes in at 1.3150 on the hourly charts, but will rise over time.  1.3150 also correlates well with the lows seen before the advance we saw on Friday.  Further support comes in at 1.3110.  Significant support is at 1.2960 which held up under a long run of channeling prices.

On the upside, 1.3400 is the pivot point.  Moving above it gives it room to run towards 1.3700.

The advance has seen our target hit at 1.3200.  1.3400 is now likely to be hit, but will of course require a move above Friday’s high at 1.3334.

Enjoy the weekend,

Cory Mitchell, CMT

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The pair finished higher last week, moving closer to the target mentioned last week at 1.3200.  13100 is actually the start of the resistance area, which is in effect till just above 1.3400.  Movement above 1.3100 indicates that 1.3200 is highly likely to be tested, but beyond this pair will enter a “no-mans land.”  The acceleration of the secondary advance in this trend higher indicates a broader advance is underway, yet reaction around this area will provide confirmation.  1.3400 ultimately needs to be broken to the upside.  Yet, as mentioned the area between 1.3200-1.3400 at this time is where new trades don’t likely need to be made.  Waiting for a rejection off the area, or a break above the area provides for higher probability trades.

1.3100 has so far held off further advances.  Penetration indicates a test of 1.3200 which is the current target.  Movement beyond 1.3200 should indicate a test of 1.3400 but given the clusters of former price movement in this area, the probabilities are not ideal for trading in the area.

Failure to move through this area, or a drop below 1.2700 shows weakness.  A drop below 1.2500 shows the updraft has ended and indicates a renewed trend to the downside.  Active traders may watch 1.2900.  The level does not jeopardize the uptrend in and of itself, but movement below it does indicate a further pullback.  How the pullback then reacts will determine if the support below it holds the uptrend, or the downtrend.

Trend remains up, and the former downtrend has been broken (written about before).

Cheers,

Cory Mitchell, CMT

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Overall there was not much change last week in the EUR/USD.  Heading into this week, the 1.3100-1.3200 resistance still remains overhead, yet the trend also remains up.  With the pullback last week having little follow through it is likely that a test of this resistance area will be seen.

A likely target is the high of this area at 1.3200 –  based on the small triangle breakout which can be seen on the chart.  Average weekly movement is just over 400 pips, putting this price within reach over the next several days.  1.3200 is also likely to act as resistance, with a move through likely to extent towards 1.3400.

With the pair currently trading at 1.2935, the uptrend is not in close proximity to being in danger.  1.2500 is a support level to watch as this is a swing low, and also the trendline has an impact at this price (crossing through).  It also happens to be the 50% retracement level for the swing from the lows at 1.1875 to the intra-day high last Tuesday.  A break below 1.2500 shows a further correction downward is likely.  Support comes in at the next retracement level just above 1.2300.  A move beyond this shows that the upward move is finished and likely new lows will be seen.

At this point the trend is up, on the short-term, but as mentioned last week the long term downtrend has been broken.  Short term traders can watch the highs and lows put in last week.  A move above 1.3030 indicates a test of the resistance area mentioned above.   On the flip side, a drop below 1.2725 indicates a test of support mentioned.

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Cheers,

Cory Mitchell, CMT

EUR/USD Daily, FreeStockCharts

In the last analysis I said the Euro was heading for a test of the dominant trendline at 1.2800.  That target has been met and exceeded as the pair closed out the week at 1.2928.  This means the downward trendline has been broken.

There is a band of resistance between 1.3100-1.3300 making this an interesting area.  A rise to the lower part of this region is likely, but how it reacts in this area will provide signals as to the longer term direction.  A rally through 1.3300 indicates continued buying into the 1.3700-1.3800 region.

At this time, the pair remains in correction higher.  A move back below 1.2475 indicate that the move higher has ended and a move back lower is likely.  The upward trendline currently crosses just below 1.2400.  A drop below that trendline is needed to confirm a reversal back lower.

Cory Mitchell, CMT

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The pair has pulled off the Tuesday highs, and is currently heading for a test of support (prior resistance) at 1.2600.  Further support comes in at 1.2560 and 1.2530.

The short-term trend remains up but may be jeopardized by a move below 1.2500, especially the swing low at 1.2480  This could trigger selling into 1.2400 (prior resistance which should now offer support).

A move higher through minor resistance at 1.2635 is likely to push higher into Tuesday’s high area – 1.2660.  Beyond this 1.2700 is the target.  Such a move would leave little resistance to the upside and targets come in at 1.2740 and 1.2800.

Cory Mitchell, CMT

~Know your risks.  Please read our Legal Disclaimer page.

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After taking some time off to enjoy some of the summer weather EUR/USD and stock market analyses will be more frequent again over the next couple weeks.

Currently the EUR/USD is headed for a test of the dominant downward trendline just above 1.2800.  This should provide some resistance.  A move lower off that level indicates downward pressure with support coming in at 1.2300.  A rise above 1.2800 indicates a broken downward trend and a further correction higher.  Resistance beyond comes in at 1.3100-1.3300

On the daily chart, a higher swing low and a higher swing high can be seen since the early June low.  This puts a short-term upward trendline in place.  As we approach the dominant downward trendline, this short term trendline should also be watched to gauge the strength of the move higher.

Cheers,

Cory Mitchell, CMT

~Know your risks.  Please read our Legal Disclaimer page.

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The EUR/USD finally broke below the triangle, but did so after two false breakouts.  The pair has moved higher after putting in lows below 1.1900.  The week was closed out with the EUR/USD at 1.2110.  The resistance comes in at 1.2150-1.2200.  This is the former support level which created the triangle (see chart at bottom).  If that resistance band hold, expect continued selling pressure.  Support comes in at 1.2050, 1.1950 and 1.1875.  Penetration of the recent low at 1.1875 has a target of 1.1650.

I have expressed bullish sentiments in previous posts.  Since support levels were not respected, it was evident the Euro was not ready to head higher yet. The break below the support 1.2150 is a bearish signal but a move back above 1.2200 indicates some stregnth, yet caution is still warranted on the long side.  Resistance comes in at 1.2350 and 1.2450.  1.2450 is a swing high and also a downward intermediate trendline.  Further resistance comes in at 1.2750.

Even with the recent bounce off the lows, trends remain down.

Cheers,

Cory Mitchell, CMT

~Know your risks.  See our legal disclaimer page.

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EUR/USD Daily, Free Stock Charts

The EUR/USD has stabilized this week around 1.19 – 1.20.  Given recently volatility and continued unease in financial markets the pair is not likely to stay within this small range for long.

False breakout may occur at 1.1900 and 1.2000 but these levels provide some indication of buying or selling interest.  A move below 1.1900 confirmed by a move below the recent low at 1.1875 indicates continued downward pressure on the Euro.   Targets/potential support include 1.1800 and 1.1750.

Trends on all time frames remain down, keep this in mind when considering the following resistance levels.  1.2000 offers some resistance, with a move above 1.2015 indicating possible upward pressure into 1.2100.  Resistance is at 1.2110 and  1.2150

Cheers,

Cory Mitchell, CMT
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