Technical analysis for EURUSD: 24th October -28th October
5 years ago forexsimulation 0
The bullish rally in the EURUSD pair has come to an end since the price has finally broken the triangle support zone at 1.11200 level. There has been a mass chaos into the mind of the investors about the next t possible move of the EURUSD pair due to burning issue of the interest rate hike decision by the FED. From the very beginning of the year 2016, the FED tried to hike their interest rate but failed due to the ongoing weakness of their economy. In the last FOMC meeting minutes, the FED didn’t clearly state about their interest rate hike decision. According to the world leading hedge firm, there is 67.3% of a rate hike in the month of December. But this positive tone will be fade out if the major economic news release comes in red in this upcoming week. The EURO might recover its loss to a certain extent if the German Ifo Business Climate data comes positive in the Tuesday. Investors are overly cautious since the ECB president Draghi is going to deliver a speech about the current performance of the EURO. If Draghi ends the meeting with a hawkish statement then we can see decent bullish move in the EURUSD pair in the event of that press conference. The U.S dollar has been doing pretty good in the last couple of weeks since the major economic news event is reflecting the positive performance of the U.S economy .But things are not clear yet until the FED clearly indicates about their pending rate hike.
Daily chart analysis
Figure: Technical parameter in the EURUSD pair
The medium-term uptrend in the EURUSD pair has come to an end with the clear break of the triangle support zone and the 61.8% Fibonacci retracement level. In the last week, the EURO suffered an extensive loss in the market against its major rivals, U.S dollar. The sharp fall in the EURUSD pair is a clear indication of fresh selling pressure in the market which is most likely to challenge the low of 5th January 2016.In the eyes of trained professional, it’s better to sell the pair after minor retracement in the daily chart. The first bullish retracement for the pair would be the 1.09590 resistance level. A valid break of that level will lead the pair towards the next critical resistance level at 1.11440 which is the triangle broken support line. Professional traders will be patiently waiting for the minor retracement in the pair to short this pair in the stated two resistance level. The first bearish target for this pair would be the critical support level of 1.08253.This support is level is pretty weak and most likely to fail to bring fresh buying pressure in the market. A clear decisive break below the 1.08253 level will bring further downward momentum in the pair towards the next critical support level at 1.07077.This level is going to provide a significant amount of support to the EURUSD pair and decent bullish bounce is expected from that level. A clear decisive break of the price below that level will bring the long-term bearish trend in the EURUSD pair again into action. The pair is most likely to find another strong support near the critical support level at 1.05436 from where we can again see some fresh buying pressure in the EURUSD pair. But the support level at 1.05436 fails then we are going to see a long bearish move in the EURUSD pair in the upcoming days.
Weekly chart analysis for the EURUSD pair
Figure: Weekly chart analysis for the EURUSD pair
The EURUSD pair has been falling sharply after hitting the minor bearish trend line on the weekly chart. The U.S dollar has also gained strength in the very beginning of this month which has also created fresh selling pressure in the market. Last week the pair tried to recover its losses to a certain extent but eventually closed making a new lower low in the market. The pair is most likely to find some support near the 1.08118 level. If the support level firmly holds then we will see a decent bullish retracement in the EURUSD pair. Professional traders are eagerly waiting for the bullish retracement to sell this pair. A valid break below the support level at 1.08118 will bring a strong bearish momentum in the market which will challenge the critical support level at 1.05252.The critical support level at 1.05252 is going to provide a significant amount of support to the EURUSD pair and from that level, we might see a range movement before the FED hike their interest rate. A clear break of the critical support level of 1.05252 will bring strong bearish rally in the pair which will lead the pair towards the 1.03820 level.
Summary: The EURUSD pair has broken the critical support level in the last week. In the eyes of trained professional selling, the pair at minor retracement would be the best possible trade entry. The recent performance of the U.S economy is pretty strong which also favor the bearish move in the EURUSD pair. Entering short at the current price is not a suitable entry since the price is trading too close the important support level at 1.08332.A valid break of the 1.08332 level is required to see some fresh selling pressure in the market. If that support holds then selling the pair at a higher price would be our prime target. Considering all the parameters the overall bias is strongly bearish in the EURUSD pair. Traders should use price action confirmation signal before entering short at the critical resistance level.