Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- The 1.37 was cracked, but the market eventually topped of near 1.3740. We anticipated 1.3730 (61.8% retracement) level to hold. The current top is respecting this 61.8% fibonacci level, just with some elbow space.
- Now the decline is materializing, note that the RSI dipped below 30, after failing to rise above 70 during the most recent rally. This suggests the bears are in more control, even though we are yet to be convinced of a significant downtrend. For now, the 1.34, 1.3250 levels are the targets, with the near-term one at zone between 1.3510 and 1.3550.
- The 4H chart shows the possible head and shoulder forming with a neckline that is slightly tilted down, residing at the moment near 1.3550.
- A break of the neckline (confirmed with a close in the 4H chart below 1.35, should see a decline towards 1.34. However even if the bearish outlook is correct, it is possible the market will provide another pullback from 1.34 as it would have completed a Gartley-type, or AB=CD type of retracement pattern. The 200SMA is also here, so a rally can be anticipated here.
- If this subsequent bullish attempt remains at the bottom half of the head and shoulder, a more significant bearish attempt could be at hand and the 1.3250 level would then be in sight pending a break below 1.34.
Will the EUR/USD complete a head and shoulder and continue lower, or will this be merely a pause in an uptrend? We would love to hear what you think.
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Fan Yang CMT
Chief Technical Strategist