Intraday and swing scenarios based on price action and volume profile.
EUR/USD is about to retest 1.1600
2020-07-24 • Updated
The pair slightly contracted after reaching the highest level since 2018. What’s next?
The euro has shown the great performance during 2020 so far. It seems it has changed the 2-year downward long-term trend. If we look at the weekly chart below, we will notice it.
The Euro gained on the current risk-on sentiment and the weak US dollar. Also, EU members agreed on the 750-billion-euros recovery fund to support economies in Europe. This fund includes 360 billion euros in loans and 390 billion euros in grants that don’t need to be repaid. Moreover, today the German consumer climate gave an additional impetus to the further EUR’s rally. It came out 0.8%, that was twice better than analysts expected. Some analysts claimed that the euro is overbought, but it keeps rallying no matter what.
If we look at the weekly EUR/USD chart, we’ll see that the pair is really close to break the intersection of the 12-year trendline and the 50.0% Fibonacci retracement level at 1.1600. If it crosses it, it will surge to the 61.8% Fibo level at 1.1820.
Now let’s look at the 4-hour chart. EUR/USD reached the key psychological mark at 1.1600, but then slightly contracted. If it breaks it through again, the price may jump to the high of September 9, 2018 at 1.1625. On the flip slide, the move below the support at 1.1570 will form the bearish double-top pattern and push EUR/USD even lower to 1.1525. Follow the US unemployment claims report at 15:30 MT time. It will add some fresh volatility to the pair!
Corrective Bearish Scenario: Sells below 38680 with TP1: 38560, TP2: 38500, TP3: 38432 Continuation Bullish Scenario: Buys above 38816 with TP: 39000
Bullish Scenario: Buy between 17515 and 17600 with TP1: 17681; TP2: 17720 intraday, and TP3: 17750 / 18000 in extension. Bearish Scenario in case of breaking the buying zone: Sell below 17500 with TP1: 17469; TP2: 17421, and TP3: 17358 in extension.
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