EURUSD Technical Outlook (Daily)
EURUSD: Shortly after the market opened Monday, the single currency ran into a strong floor of bids around H4 support drawn from 1.1233, consequently forcing the pair to retest the 1.13 handle going into the close.
Well done to any of my readers who managed to pin down a position from this line as it was, alongside the H4 support seen below at 1.1219.
Given that daily action just rebounded from demand at 1.1242-1.1202, there is a chance that the 1.13 line could be taken out Tuesday.
Assuming this comes about, a Long position will then be considered on any retest targeting H4 resistance at 1.1367, just 2 pips below daily supply at 1.1446-1.1369.
The reservation about this potential trade setup is the weekly price remains trading from supply seen at 1.1533-1.1278.
This area has capped Northside since May 2015 (see Red arrows), feel that the single currency will eventually push lower to touch support at 1.0796 in the near future.
So, strongly advise a trade above 1.13 with lower time frame confirmation. This action could come in the form of an engulf of supply followed by a retest, a trendline break/retest or simply a collection of buying tails around support.
Stops are usually placed 5-10 pips beyond confirming structures allowing the trade room to breathe.
Levels to watch/live orders:
- Buys: Watch for price to take out 1.13 and look to trade any retest seen thereafter; lower time frame confirmation required.
- Sells: Flat (Stop loss: N/A).
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