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
- EUR/USD has broken below a head and shoulder as seen in the 1H chart. The market topped off at 1.3450 last Friday, and starts the week breaking below the neckline near 1.3320, but has bounced back up from 1.3250.
- As we gear up for the US session, the market has retraced back to near 1.3340.
- The bullish candles are strong and it looks like this head and shoulder formation might not hold up as a topping pattern. It's more correct to say that whatever retracement we were suppose to get already materialized, and we are ready for continuation.
- On the other hand, if the market respects the 61.8% retracement level at 1.3380, there is still a chance for the market to decline towards 1.3150, a lower support pivot. The RSI in the 1H chart should not break above 60, and should return below 40 in this short-term bearish continuation scenario.
- This is still within the larger correction rally we are anticipating. Because of this possible scenario, the bearish outlook is limited at the moment to 1.31 (61.8% retracement of the last week's rally).
Will the EUR/USD respect the 1.3500 high? We would love to hear what you think.
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Fan Yang CMT
Chief Technical Strategist
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.