Razvan Mihai, CFTe
Forex Rally
EURUSD – Pennant Price Pattern
Last week the price of EURUSD has tried to break the resistance are from 1.1000 several times. On Thursday, when the volatility was at its highest point EURUSD bounced once more from the resistance area, retested the support from 1.0830. During the ECB’s press conference the price bounced from 1.0830 and had an incredible rally, hitting a high at 1.1217.
Currently the price of EURUSD has drawn a Pennant. In most of the cases, this patterns signals a continuation of the previous move. In this situation a break above the upper line of the price pattern would signal another rally, most probably above the current highs,targeting the next important resistance from 1.1400. On the other hand, a drop below 1.1000 would be a strong bearish signal. In this second scenario I will be expecting the Euro to lose against the greenback at least 100 more pips.
USDJPY – Continues Sideways
Seems like investors doesn’t really care about USDJPY this month. Half of March already gone and the price of this currency pair did not exit the range with the limits set in February between 115.00 (resistance) and 111.00 (support.)
I am keeping an eye on this pair for a breakout. My favorite scenario in this situation would a break below the support.
NZDUSD – Stronger Bearish Signals
Last week I was expecting the NZDUSD to be rejected once more from 0.6746 support area. Expectations met, the price got back to the resistance to bounce back towards the support. In the first half of last week the support was broken and the price fell to the trend line. In the second part of the week, the price got back to retest the resistance area (ex-support 0.6746).
This week started with a plunge of the kiwi. NZDUSD currently trading below 0.6700. I am expecting the price to retest the trend line and maybe to break it. I would consider a close on a four hour time frame under the trend line, a strong bearish signal. In this scenario I will be expecting the price to get back to the key level support from 0.6558.I would believe in a comeback of the NZD only if the price will break again above 0.6750.
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