Talking Points
- EURUSD approaching apex of multi-month consolidation formation
- Updated targets & invalidation levels
- Event Risk on Tap This Week
EURUSD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: EURUSD has continued to consolidate into the apex of a formation darting back to the December high with the pair struggling to mount resistance at 1.0924. This level is defined by the December reversal high-day close and converges on basic trendline resistance over the next few days. A topside break of the formation is favored eyeing resistance objectives at 1.0970 (100DMA) & 1.1051 (200DMA). Note that this level coincides with basic TL resistance dating back to the August high. More significant resistance is eyed at 1.1120 where the 61.8% retracement of the October decline converges on the upper median-line parallel into the close of the week / open of next week.
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EURUSD 30min
Notes:The consolidation can be seen more clearly here on the 30min chart and we’ll be looking for a break of this range to offer guidance on the euro’s next leg. A topside breach is favored and so we’ll be looking to buy pullback’s / long-triggers while above the weekly opening range lows with a breach of the highs targeting the aforementioned resistance objectives.
A break below the figure invalidates our immediate long-approach with such a scenario eyeing support targets at 1.0769 & 1.0724/34. Note that the 2016 opening-range low comes in at 1.0709/10 and a break below this objective threshold would put the broader short bias back in play. A quarter of the daily average true range (ATR) yields profit targets of 23-26pips per scalp. Added caution is warranted heading into the close of the week with the U.S. Non-Farm Payrolls release likely to fuel volatility in the dollar crosses.
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Relevant Data Releases
Other Setups in Play:
- Webinar: Aussie Crosses at Key Inflection Points Ahead of RBA
- EURAUD Approaches Critical Support- Longs Favored Above 1.5300
- AUDJPY Following 2016 Trade Plan- Time to Reload
- AUDUSD Rally Accelerates into Resistance- 7037 in Play
- GBPJPY Coiling For Next Big Move- Breach of 170.50 to Fuel Recovery
---Written by Michael Boutros, Currency Strategist with DailyFX
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