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I’m going to get started this week on the Euro versus the US Dollar [EURUSD]. I’m going to start here on the Daily Chart. For the past several months, we can see that this currency pair has been in an uptrend. I have two different indicators showing us that uptrend. If we go back down to the bottom left-hand side of the chart, all the way back down here towards the mid-1.2700s, we see the blue trend line connecting with the lowest low. And of course, as the market continued to pressure higher with higher highs and higher lows along that trend line, we saw the trend continue.
Interesting is recently we’ve seen the breakdown of that blue trend line. The second indicator I have here on the chart showing us the uptrend is the moving average line. It’s green here, and I made it really thick so you could see it easily on the video, but this green line is actually the 100-day-period moving average. 100-period moving average here on the Daily Chart. You can see also not only was it going up higher highs and higher lows, a couple of times challenging underneath it, but here we could see the market is underneath it once again.
The question of course is, if it stays underneath the blue trend line, representing higher highs and higher lows, underneath the 100-period moving average here on the Daily Chart, is that our clue that we are looking for the change in the overall trend? Now, again, I’ll point out that we have been underneath that moving average before and it turned around and went back up in the direction of the trend. However, very interesting is this time, being underneath the blue trend line also.
Some other indicators of a change in the trend would be, of course, a change of the price pattern. The overall indication of the uptrend would be higher highs and higher lows. That tells us that the price is continually moving higher and that we’re in an uptrend. Let’s go ahead and zoom it in one time here on the Daily Chart and take a look at this pink-shaded area. The pink-shaded area that you see here on the chart of course is our current support. The past five days have found support between 1.3695 or so and 1.3665, down here into the pink-shaded area over the past five days. Follow it back. You could see support right here. And you follow it back a little bit farther. You could see support back here.
So, one, two, and now the third time finding support above this pink-shaded area. So, it’s my expectation that as long as we stay above this pink-shaded area, we’re looking at support right now, but now we can also see that there’s potential resistance just above the market with the 100-day moving average. We follow that yellow-shaded area back in time. We can also see some congestion and support here. We could see some congestion and support back here, along that yellow-shaded area, so that is our current intraday resistance.
We’re looking at somewhere right around the 1.3730-level, which is that yellow-shaded area. A little bit higher than that of course would be the blue zone and back towards the blue trend line here, the longer-term trend line for the EURUSD. So, resistance: yellow-shaded area, possibly the blue-shaded area, the 100-period moving average – all of that providing intraday resistance. Of course if we break above that 100-period moving average and really that yellow-shaded area, we’ll call it 1.3730, we’ll likely look for a little bit of a push back towards the 1.3800-level, which would be the blue-shaded area.
And if, at any point, we see a breakout underneath support, a breakout underneath that pink-shaded area, we’ll look for it to continue down to the next support, which would be this orange-shaded area here for the EURUSD. Of course this week we see that the Forex Black Book trend bar has stayed red. It was red last week and again this week. It’s red again, so that tell us that we have a bearish bias. So, we have three different indicators really here, showing us a bearish bias. The 100-period moving average, the breakout underneath the blue trend line, and now the Forex Black Book, giving us a little bit of encouragement for selling for the EURUSD rather than buying.
One last thing here on the EURUSD Daily Chart. Let’s take Fibonacci from the low here, just on the Daily Chart, low that we could see all the way down at the bottom to the current resistance high here at the top of the chart. And here, very interesting is the .618 fib. Let me make sure the bottom of that fib gets right on that low, and here, very interesting, the .618 fib of that previous leg of the uptrend sits at 1.3673. That’s the bottom of our pink zone. So, clearly a break of that .618, we go down to the orange zone, which is where the .786 is.
Staying above the .618, we’re challenging actually the yellow-shaded area is where the 50% of that same range sits, right into the 1.3734-level. So, clearly the yellow and pink-shaded areas will be strong areas to watch for the day today on the EURUSD. Let’s take this down to the 4-Hour Chart. Bringing it down to the 4-Hour Chart, we could see the pink-shaded area, the past five days, holding support there.
Support on the left. Support in the middle. Support on the right. A breakout above the yellow-shaded area clearly gives way to a rise for the EURUSD for the intraday, likely pushing back up towards the blue-shaded area here, into the 1.3770s, 1.3780s, and 1.3790s. Interesting here, leaving that 100-period moving average on the 4-Hour Chart is the fact that it’s well above the current market, actually closer towards the blue trend line and the blue-shaded area. So, interesting how the 100-period moving average looks different here on the 4-Hour Chart and indicating potential rise towards the upper-1.3700s.
The other side of this of course will be the breakout under the pink zone and the continuation lower. One last indicator here on the 4-Hour Chart are the bank flow levels. We didn’t get bank flow levels on Friday, but we did get them last Thursday. And if you take a look at last Thursday’s bank flow levels, we could see the market holding resistance above and support below. We actually got bank flow buy levels down here in the orange zone.
We’re closer to the sell levels from last Thursday. We didn’t, again, get them Friday, which means, to me, that they were likely very similar to Thursday’s and there was no need to change them, but you could see that was just here above the yellow zone, below the blue zone. That would likely indicate resistance or selling pressure here for this currency pair today. So, given the clues to all of the selling indicators. The breakout under the blue trend line, we’re under the 100-day moving average. We’re red trend bar Forex Black Book. I would suggest that there’s potential to sell this currency pair on rallies into resistance, into the bank flow.
One last thing here on the EURUSD. Let’s take Fibonacci from the high down to the low of the last downtrend. We also find the .236 fib sitting right here at the yellow-shaded area. So, if you’re looking to sell, you’re selling resistance. Possibly the yellow zone, maybe even the blue zone, or a breakout underneath the pink-shaded area. For those on the other side, thinking, “Well, I think it’s done with this reversal,” let’s look for it to go back up again. Let’s look for buys down closer to the pink-shaded area. That minimizes your risk and a breakout above the yellow zone becomes a buy.
So, dip to the pink zone, breakout above the yellow zone becomes a buy for the buyers in the market. Selling the yellow zone, blue zone, or under the pink zone for the sellers in the market today for the EURUSD.
