Weekly
• Last Candlesticks pattern: Shooting star
• Time of formation: 03 May 2016
• Trend bias: Down
Daily
• Last Candlesticks pattern: Shooting star
• Time of formation: 3 May 2016
• Trend bias: Sideways
EUR/USD – 1.1208
As the single currency has retreated after faltering below resistance at 1.1285 (this month’s high), suggesting consolidation below this level would be seen, however, as long as support at 1.1109 holds, bullishness remains for recent upmove to resume after initial sideways trading, break of said resistance at 1.1285 would extend recent upmove from 1.0340 low to previous resistance at 1.1300, then 1.1327, however, near term overbought condition should limit upside to previous chart resistance at 1.1366 and reckon 1.1440-50 would hold from here, risk from there is seen for a retreat later.
On the downside, whilst initial pullback to 1.1160-65 cannot be ruled out, as long as support at 1.1109 holds, prospect of another rally remains. A daily close below said support at 1.1109 would defer and risk test of the Kijun-Sen (now at 1.1062) but a sustained breach below there is needed to suggest a temporary top is possibly formed instead, risk correction to 1.1025 (previous resistance now support), break there would add credence to this view, then correction to 1.0950-60 would follow, having said that, support at 1.0839 should remain intact.
Recommendation: Hold long entered at 1.1120 for 1.1320 with stop below 1.1105.
On the weekly chart, as euro has eased after rising to 1.1285 earlier this month, suggesting consolidation below this level would be seen and pullback to 1.1160-65 cannot be ruled out, however, reckon support at 1.1109 would limit downside and bring another rise later, above said resistance at 1.1285 would signal the rise from 1.0340 low is still in progress and bring a test of previous resistance at 1.1300 but a break of another previous resistance at 1.1366 is needed to signal early downtrend has ended at 1.0340, bring further subsequent rise to 1.1428, then towards 1.1500, having said that, price should falter well below another previous chart resistance at 1.1616.
On the downside, expect pullback to be limited to 1.1160-65 and bring another rise later to aforesaid upside targets. Below said support at 1.1109 would defer and risk weakness to the upper Kumo (now at 1.1091), then test of 1.1025 (previous resistance now support) but break there is needed to signal top is formed instead, bring further fall to 1.0965-70, however, 1.0922-28 (previous support and current level of the Tenkan-Sen) should remain intact, price should stay well above another previous support at 1.0839, bring another rise later.
