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 – 1.1200
Although the single currency resumed recent upmove and rose briefly to 1.1296, lack of follow through buying on the break of previous resistance at 1.1285 and the subsequent retreat suggest a temporary top is possibly formed there and consolidation below this level would be seen, below last week’s low at 1.1132 would bring test of previous support at 1.1109 but a daily close below there is needed to add credence to this view, bring retracement of recent upmove to 1.1050, then test of previous resistance at 1.1025 (now support) but reckon downside would be limited to 1.0950-60 and price should stay well above support at 1.0839.
On the upside, whilst initial recovery to 1.1230-35 cannot be ruled out, reckon said resistance at 1.1296 would remain intact, bring retreat later. A break above said last week’s high would extend recent upmove from 1.0340 low to previous resistance at 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.
Recommendation: Take profit on our long entered at 1.1120 and stand aside
On the weekly chart, euro’s retreat after last week’s late rise to 1.1296 suggests consolidation below this level would be seen and pullback to 1.1109 support cannot be rued out, however, a weekly close below the Tenkan-Sen (now at 1.1059) is needed to suggest a temporary top is formed there, bring retracement of recent rise to the upper Kumo (now at 1.0984), then towards 1.0920-25, however, reckon downside would be limited to 1.0850-60 and previous support at 1.0839 would hold from here, bring rebound later.
On the upside, above said resistance at 1.1296-00 would signal the rise from 1.0340 low is still in progress and bring a test of previous resistance at 1.1366 but a break of this level 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.
