The Chart of the Week: EUR/USD bears await break of critical support
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADE- A massive amount of long positioning is being closed in a phase of distribution.
- EUR/USD severs its uptrend and bears are set on a sizeable retracement.
EUR/USD is hugging the 2-month Point of Control, (POC) around 1.1830, supported by trendline resistance.
Last week, we noted the consolidation period in EUR/USD with a focus on the downside:
The Chart of the Week: EUR/USD in distribution, bears waiting for breakout confirmations
Looking to the positioning data, speculators are closing out there long positions in a phase of profit-taking which has seen a huge spike in the data showing an almost -18,000 net change in longs from the prior week of -2,184 and -11,194 before that.
Consequently, this shift in the futures market can be expected to be reflected in the spot market while the price reached its lowest level since mid-August to 1.1737.
Monthly chart
Following a strong monthly and uninterrupted impulse, the focus is on a healthy correction towards a 38.2% Fibonacci retracement level.
Weekly chart
1.15 area on the weekly chart is market by the structure as well as a 38.2% Fibonacci retracement level.
Daily chart
A break of the trendline support will pressure the daily support structure and open prospects of a breakout to the downside.
4HR chart
As illustrated, the market can easily remain in a phase of distribution above the trendline support, although swing traders will be monitoring for a break of structure from a 4-hour perspective.
From a volume profile analysis, there is space between 1.1720 and 1.1350 that guards a high volume area in the lower end of the 1.12 area.
- A massive amount of long positioning is being closed in a phase of distribution.
- EUR/USD severs its uptrend and bears are set on a sizeable retracement.
EUR/USD is hugging the 2-month Point of Control, (POC) around 1.1830, supported by trendline resistance.
Last week, we noted the consolidation period in EUR/USD with a focus on the downside:
The Chart of the Week: EUR/USD in distribution, bears waiting for breakout confirmations
Looking to the positioning data, speculators are closing out there long positions in a phase of profit-taking which has seen a huge spike in the data showing an almost -18,000 net change in longs from the prior week of -2,184 and -11,194 before that.
Consequently, this shift in the futures market can be expected to be reflected in the spot market while the price reached its lowest level since mid-August to 1.1737.
Monthly chart
Following a strong monthly and uninterrupted impulse, the focus is on a healthy correction towards a 38.2% Fibonacci retracement level.
Weekly chart
1.15 area on the weekly chart is market by the structure as well as a 38.2% Fibonacci retracement level.
Daily chart
A break of the trendline support will pressure the daily support structure and open prospects of a breakout to the downside.
4HR chart
As illustrated, the market can easily remain in a phase of distribution above the trendline support, although swing traders will be monitoring for a break of structure from a 4-hour perspective.
From a volume profile analysis, there is space between 1.1720 and 1.1350 that guards a high volume area in the lower end of the 1.12 area.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.