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EURUSD broke higher in line with our forecasts but what will happen to the major forex pair now?
And what are the key levels we should look at?
Watch the video to learn more…
https://youtu.be/x1lsBNHBh-A
Today, we’re going to highlight EUR/USD, its key levels, and what we expect from it next week.
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The price has been relatively bullish this week.
Weekly timeframe
If we go to the weekly timeframe, we have a nice rally up. We hit some targets recently.
In our official Telegram channel, our forecast was that the price was going to rally. We looked at the potential for a buy order at 1.19105, with the stop loss below the low 1.8635, targeting the supply zone at 1.19575.
EUR/USD broke the highs in line with our forecasts in our official Telegram channel. We looked for this move due to the retail trader data showing an increase in short positions at the recent swing lows. This is a common trait in the retail market which led us to look for a long opportunity. The price rallied then hit our targets in line with the major supply zone.
That worked out nicely. The price rallied up and hit those targets. What now? What else can we expect from this market?
Monthly timeframe
The monthly timeframe looks like it’s going to be a strong month, which is what we could expect if we’re looking at the US Dollar weakness.
However, we have to understand that the market will move in impulse retracement phases.
We have an impulse retracement, and we’re currently in that impulse phase. However, if the price rejects this supply zone, we could expect a retracement phase back down to some key support.
The market is finding some resistance at 1.1980 and could move the market into a daily retracement phase. If we are expecting the trend to continue in line with the USD seasonal bias, we should look to buy low and sell high. The level of support resting at 1.1892 could be an area where buyers can re-enter.
If I want to be a buyer of EUR/USD, I’d want to buy it down at 1.18924 because the philosophy is to buy low, sell high.
Four-hour timeframe
If going to the four-hour timeframe, the price is rejecting this supply zone. I would like to see a move back down to the 1.1892 area. We can then look for long opportunities in line with some high volume analysis there.
The most traded level is 1.1892 within this consolidation area. So, this is where I want to do business with the markets.
Going down into the four-hour timeframe we can see the levels in more detail. The reason 1.1892 is the level of interest is because it was the most traded level within the four-hour consolidation pattern. If the price were to retrace back to this point, the buyers that pushed the price should defend this level and push the price back higher.
The risk is to the upside. If the price doesn’t pull back and breaks higher, we could see a further rally.
Alternatively, if the US Dollar weakness will continue, we may not get the pullback that we’re expecting.
We may see the price break to the upside and then pull back, but we have wait if we get a higher high. If we don’t get the higher high, then we should expect a retracement in price.
Hopefully, we can get the pullback into 1.1892 for a move down.
Hourly timeframe
If I go to the hourly timeframe, some buyers are stepping back in, so we may not get the retracement that we would like to see.
However, I’m expecting some selling to come into this market.
EUR/USD is looking pretty good. If it takes out these highs, we’re going to see some further upside. Potentially, all the way back up into the 1.2150 area.
That would be the resistance level I would expect the price to come back to. The reason is because we saw some aggressive selling from that area.
Reverting back to the daily timeframe, we can identify other supply zones that the market could retest if the current highs were to be broken.
There is a large supply zone resting at 1.2155 which could be a future target for the price if USD were to sell off further.
So, this could be a nice supply zone, and if the price were to break out and continue to trend, then I’d look for the price to come to 1.2155 on EUR/USD.
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