Jump to content

Bearish in EURUSD but only selling into rallies


Recommended Posts

USD INDEX- The index has stalled at the 161.8% extension level of 90.25 (from 88.26-89.49). Although the med-term bias remains bullish for the US dollar, some currency majors are highlighting scope for a deeper correction. Bespoke support is seen at 89.94. If we see a break of this area then further support is seen at 89.61, a possible right shoulder of a bullish reverse Head and Shoulders formation. We look for the deeper correction to buy into.

usd index ig.png

 

For this reason, we look for an upside correction to sell into EURUSD this week.

 

Monthly: In a large corrective channel formation. The trend of lower lows in seen at 1.2670. We have stalled and pulled back from the 38.2% pullback level of 1.2517 (from 1.6038-1.0341)

eurusd m ig.png 

 

Weekly:  A possible Ending Wedge formation. Trend line support is seen at 1.1978. The previous swing low is seen at 1.1553. With bespoke support at 1.1593, we expect a ‘bounce’ higher from this solid support area.

eurusd w ig.png

 

Daily: Stalled in front of the 261.8% extension level of 1.2620(from 1.1551-1.1959). The move higher can bee seen in 5 waves (Elliott Wave). With bespoke support located at 1.2123, our risk/reward would be poor to sell from current levels.

eurusd d ig.png

 

Intraday (four-hours) – We have stalled at the 161.1% extension level of 1.2212 (from 1.2539-1.2337). The intraday chart (1 hour) posts a DeMark exhaustion 13. Often the indication of a change in the current trend. For these reasons, we look to sell into rallies.

Bespoke resistance is seen at 1.2330-40. This area has been pivotal (swing high from 17th January 1.2324 / swing low from the 30th January at 1.2337).

eurusd 4 ig.png

In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
×
×
  • Create New...