Though biased to the upside buying this market is difficult...

2019年2月25日

EUR/USD:

Weekly gain/loss: +0.35%
Weekly close: 1.1330

Weekly perspective:

Since October 2018, the buyers and sellers have been battling for position between a long-standing support/resistance at 1.1465 and a notable demand area coming in at 1.1119-1.1295. As is evident from the chart, the week concluded responding from the lower edge of this consolidation; therefore further buying may take shape this week. Outside of these areas, zones on the radar fall in at a resistance area drawn from 1.1717-1.1862 and a 2016 yearly opening level at 1.0873.

Daily perspective:

Mid-week witnessed the pair enter a phase of indecision (albeit with a minor bias to the downside) off the underside of a 38.2% Fibonacci resistance value at 1.1362. This level, as highlighted in previous reports, is the first take-profit target for many traders long the daily ABCD bullish completion point (red arrows) around 1.1240.

Any sustained move above 1.1362 this week places the 61.8% Fibonacci resistance value at 1.1442 in the spotlight – considered the second take-profit target for traders long the aforementioned ABCD completion. A move lower, nonetheless, has support at 1.1271 in sight.

H4 perspective:

Worries in the German business world continued to grow Friday, following the ifo Business Climate Index falling from 99.3 points (seasonally adjusted) in January to 98.5 points in February. This is the lowest level since December 2014. Technically speaking, the H4 candles faded December’s opening level at 1.1350 after the said report, though staged a reasonably strong recovery into US hours from 1.1316.

By and large, though, H4 action remains capped by the yellow zone marked at 1.1377/1.1364: a H4 127.2% ABCD (red arrows) pattern and a 38.2% Fibonacci support value at 1.1322: measured as the first take-profit target for harmonic traders. Well done to any of our readers who managed to remain short this area throughout last week’s volatility, as 1.1377/1.1364 was a noted zone to watch in Wednesday’s piece for potential shorting opportunities.

Areas of consideration:

In a nutshell, the structure of this market can be boiled down to the following:

• Weekly flow shaking hands with demand at 1.1119-1.1295 – possible buying this week.
• Daily price resisting its first upside target at 1.1362 (converges with the 1.1377/1.1364 ABCD sell zone on H4) – possible selling this week.
• H4 action contained between an ABCD bearish completion at 1.1377/1.1364 and its first take-profit target (38.2% Fibonacci support) at 1.1322 – direction unclear.

Overall, the research team is marginally biased to the upside this week. The combination of weekly price striking demand and daily action showing room above 1.1362 towards its second take-profit target (from its ABCD support) at 1.1442.

Despite a possible rally emerging this week, buying based on H4 structure is challenging. Not only do we have 1.1377/1.1364 in play, we also have nearby 1.14 resistance to consider as well.

Today’s data points: FOMC Member Clarida Speaks.