Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.
The weekly band of support on Eurusd (see weekly chart below) continues to hold remarkably well, following a pierce- through of the down trendline, and all the way into 1.3820s. The bounce out of that zone sent the pair back up through the trendline, and Friday’s close saw it trying to stay supported above 1.4350, an important level of support which extends all the way from 2008, (see blue shading on the 4hr chart below). This zone has proven to be a critical reversal area in the past. More recently, the last down swing from 1.4578 to 1.3834 low included a pullback to retest the top of this zone before following through lower. This is also a .618% fibonnacci retracement level. Currently, the market is supported above this band.
If the 4hr band of support continues to hold, the very next obstacle to further upside would be the down-sloping trendline at 1.4430, and also the .786% fibonnacci retracement level. If breached, the bulls will probably be targeting the 1.4578 high next, which should offer strong resistance, since it also converges with the lows of the previous highs at 1.4693. The horizontal lines on the chart indicate the major levels of resistance above this level.
It is important to note that the band of support also means that price can range within that zone (1.4300-1.4360) before breaking out decidedly in one direction. Next week I will be watching for a long setup, with confirmation on the smaller timeframes as to whether the support will continue to hold. Otherwise, I will wait for a retest of the bottom of the range (1.4300), where price should either breach to the downside, or reverse to continue its bullish run.
Thanks for reading…till next week..Have a great weekend!
Winner’s Edge Trading, as seen on: