Euro looking very likely to make a move soon

AUD/USD Forecast
Australian dollar looking exhausted
June 25, 2019
AUD/USD Forecast
Major test ahead for Aussie dollar, is the bottom near?
July 13, 2019

The Euro has been relatively quiet this week which of course is in a major surprise considering that it is also a major holiday week. Compounding things is the fact that we have the jobs figures coming out on Friday, so that of course makes for a bit of a “double whammy.” That being the case, we are setting up for a big move if the technical pattern holds true.

Major confluence of support

There is a major confluence of support in this area, as seen by the fact that the market, although soft has been sitting on a large Fibonacci retracement ratio. The 61.8% Fibonacci retracement level of course attracts a lot of attention as it is the “golden ratio”, and therefore a lot of traders will simply enter the market at that area. That being said, we also have the 50 day EMA underneath, which is flattening out. In other words, it makes sense that we are going to see a lot of confusion in this area, as it is essentially “fair value.” The question here is, “How long will it last?”

Candlestick pattern

The candlestick pattern of three inverted hammers in a row is a crucial pattern as far as I can tell, because it is extraordinarily bearish. However, as we are sitting on major support, there is the possibility that we turn around. If we were to turn around and break above the three candlesticks, it’s very likely that the market goes looking towards 1.1350 level, perhaps even into the area just above there reaching towards 1.14 handle.

On the other hand, if we were to break down below the 50 day EMA on a daily close, then it’s likely that we go looking towards the 1.12 handle. That’s an area that has seen support in the past. That being the case, it looks as if there is a certain amount of interest in the Euro at that handle.

Beyond the candlestick pattern, we also have a bit of a bottoming pattern, which looks a lot like a “rounded bottom” at this point. If we rally from here it would be a series of “higher lows”, which of course suggests that the uptrend is very much intact.

Jobs figures

The jobs figures coming out on Friday will be crucial. In fact, this could be the reason the markets move. We are expecting 160,000 jobs added during the previous month, so keep that in mind when that announcement comes out at 8:30 AM New York time. If we can rally at this point, probably due to the idea that the Federal Reserve will be forced to cut interest rates, we could break above the top of the three candlesticks that make up the three inverted hammers. If that happens, it shows a major breach of resistance, sending this market much higher. The 1.1350 level has been a bit important in the past, and it would be like a magnet for price. If we can break above there then we could be talking about a major trend change being confirmed for just about everybody watching.

The next 24 hours are crucial, maybe.

It’s possible that the next 24 hours will be crucial. However, there’s also the possibility that they aren’t. We may need a couple of days’ worth of action to either break down or break through the top of these inverted hammers. The only reason I say that is because quite often a lot of traders will take an extended weekend after the holiday. At this point it’ll be interesting to see how the markets react but the daily close should tell the entire story. At this point we could be looking at the market winding up to make a bigger move.

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