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EUR/USD Forex Technical Analysis – Starting Fourth Week Inside 1.1447 to 1.1576

By:
James Hyerczyk
Updated: Oct 22, 2018, 07:18 UTC

Based on the three consecutive weekly closes inside a pair of 50% levels, the direction of the EUR/USD this week is likely to be determined by trader reaction to 1.1447 and 1.1576. Continuing to trade between 1.1576 and 1.1447 will indicate investor indecision, but it will also indicate the potential for a volatile breakout.

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The Euro closed lower last week despite confirming the previous week’s potentially bullish closing price reversal bottom. The price action continues to be controlled by a series of retracement levels and headlines regarding Brexit. The way of least resistance is down with the weekly chart showing plenty of room to the downside under the recent support at 1.1432. Any rally is likely to be labored until it clears 1.1669.

At 0608 GMT, the EUR/USD is trading 1.1529, up 0.0014 or +0.10%.

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Weekly EUR/USD

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. However, momentum is trying to shift to the upside with the formation of the closing price reversal bottom the week-ending October 19 and the subsequent confirmation last week.

A trade through 1.1432 will negate the closing price reversal bottom and signal a resumption of the downtrend. The next target is the main bottom at 1.1301. The main trend will change to up on the weekly chart on a trade through 1.1816.

The main support is a 50% level at 1.1447. It’s paired with a Fibonacci level at 1.1185. That zone is based on the 1.0339 to 1.2555 range.

The main range is 1.1851 to 1.1301. Its 50% level or pivot is 1.1576. This price is acting like resistance.

The short-term range is 1.1816 to 1.1432. Its retracement zone at 1.1624 to 1.1669 is another resistance zone.


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Weekly Swing Chart Technical Forecast

Based on the three consecutive weekly closes inside a pair of 50% levels, the direction of the EUR/USD this week is likely to be determined by trader reaction to 1.1447 and 1.1576.

A sustained move over 1.1576 will indicate the presence of buyers. Overtaking this level could lead to a labored rally with additional targets 1.1624 and 1.1669. Since the main trend is down, sellers are likely to come in on a test of these levels.

The trigger point for a potential acceleration to the upside is 1.1669. Taking out this level with conviction could fuel a breakout to the upside with the next potential target the main top at 1.1816.

A sustained move under 1.1447 will signal the presence of sellers. Taking out 1.1432 will indicate the selling is getting stronger. The weekly chart is wide open under this level with the next major downside target 1.1301.

Continuing to trade between 1.1576 and 1.1447 will indicate investor indecision, but it will also indicate the potential for a volatile breakout.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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