Weekly
• Last Candlesticks pattern: Shooting star
• Time of formation: 31 Jul 2017
• Trend bias: Near term up
Daily
• Last Candlesticks pattern: Shooting star
• Time of formation: 2 Aug 2017
• Trend bias: Up
EUR/USD – 1.1674
Last week’s stronger-than-expected rebound suggests low has been formed at 1.1554 earlier this month (with a hammer candlestick reversal pattern on the daily chart) and consolidation with upside bias is seen for gain towards resistance at 1.1880, however, a daily close above there is needed to retain bullishness and signal the correction from 1.2093 high has indeed ended at 1.1554, bring further rise to 1.1935-40, then 1.2005. Looking ahead, above there would confirm recent upmove has resumed for retest of 1.2093, break there would extend the rise from 1.0340 low to 1.12150-55 first.
On the downside, whilst initial pullback to 1.1700 cannot be ruled out, reckon downside would be limited to 1.1650-60 and bring another rise later. Below 1.1637 support would defer and risk weakness to 1.1600, then towards said support at 1.1554, once this support is penetrated, this would revive our near term bearishness and signal a temporary op has been formed at 1.2093, bring retracement of early upmove to 1.1500 and later towards 1.1465-66 (50% Fibonacci retracement of 1.0839-1.2093) but reckon 1.1370 support would hold and price should stay above 1.1312-18 (previous support and 61.8% Fibonacci retracement).
Recommendation: Buy at 1.1665 for 1.1865 with stop below 1.1565.
On the weekly chart, last week’s rebound to 1.1861 suggests low has been formed at 1.1554 earlier this month, hence consolidation above this level would be seen with mild upside bias for another test of said resistance at 1.1880, however, only break there would signal the pullback from 1.2093 top has ended at 1.1554, bring further gain to 1.1940-50, then test of 1.2005, once this level is penetrated, this would confirm early rise from 1.0340 low has resumed for retest of 1.2093, above there would extend headway to 1.2150-55, then 1.2200-10 later.
On the downside, although pullback to 1.1700 and possibly 1.1650-60 cannot be ruled out, downside would be limited and bring another rebound. A drop below said support at 1.1554 would signal a temporary top has been formed at 1.2093, bring retracement of recent rise to 1.1500, then 1.1466 (50% Fibonacci retracement of 1.0839-1.2093) but reckon downside would be limited to 1.1400 and 1.1312-18 (previous support and 61.8% Fibonacci retracement) should hold, price should stay above previous minor resistance at 1.1296, bring another rebound.
