Paying attention to the 4-hour chart, you will notice that:
- at the end of the European session on Thursday our first target was reached – 1.2260,
- at the level of 1.2267, a noticeable resistance formed for EURUSD, after which a downward correction began,
- at the same time, the bears do not have enough strength yet to break the mirror level 1.2241.
Now let’s look at the indicators:
- The currency remains well above the 34, 55, 89 and 144 moving averages, which are directed upward and indicate continued bullish sentiment (in the medium term), as well as a range of support levels 1.2175, 1.21505, 1.2116 and 1.20245.
- The MACD histogram is still in the positive zone and above its signal line, but it started to gradually decline and thus indicates a possible strengthening of bearish sentiment.
- Stochastic Oscillator headed to the exit from the overbought zone and is giving a signal to sell the euro (EUR), as the% K line falls below the% D line.
Since it is extremely risky to trust only one clear signal, and also due to the fact that the decline in quotations has slowed down, then as a confirmation that bearish sentiments may increase in the forex market in this currency pair, it is necessary to wait for the breakdown of the mirror level 1.2241, which may open the way to levels 1.22055, 1.2166 and 1.21365.
Otherwise, the rate of the EUR / USD currency pair will move within the price range 1.2241 – 1.2267.
An alternative (‘bullish’) scenario of the development of events will be ‘activated’ in case of a breakdown of the resistance level 1.2267, after which the quotes may go to the levels 1.2300, 1.2325 and 1.2380.
Resistance levels: 1.2267, 1.2300, 1.2325, 1.2350, 1.2380, 1.2400 / 10
Current price: 1.2245
Support levels: 1.2241, 1.2225, 1.22055, 1.2175, 1.2166, 1.21505, 1.21365
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