The EURUSD recovers this week, as we suggested before , the key support 1.0848 holds and pushes the pair to the upside , the question is now!!! what’s next move for EURUSD ?!!!
I think the answer can be divided into 2 points:
Point 1 : The pair remains bearish and it will fall towards 1.0461 levels where a cut will open 0.950 levels. (70%).
Point 2 : The pair will consolidate within 1.0845/1.1466 range before flying towards 1.2000 levels. (30%)(unlikely).
First Scenario : If we take a quick look to weekly chart, the pair was rejected below EMA 30 , a short term resistance has been printed at the 1.1466 levels , as a result ; as long as 1.1466 resistance holds on a weekly closing basis, the EURUSD remains bearish , sooner or later it will fall to 1.0461 levels but I think we have 2 options for this scenario:
A: Recovery from 1.0818 will end around 1.1297/1.1326 levels , we should witness strong reversal from this point ,If seen, It should target 1.0818 levels , note that we have U.S Non-farm Payrolls data tomorrow , since we are around critical resistance levels on daily (1.1297/1.1326) and weekly (1.1289) , positive Nonfarm Payrolls data should bring strong reversal !!!! (It might spike to 1.1400 before falling )!!!
B: Recovery from 1.0818 could extend beyond 1.1326 levels , If seen, we may witness limited gains above 1.1326 levels , how ????
The pair will spike above (1.1466) to 1.1575 or 1.1679 levels but It will fail to hold gains on a weekly closing basis, in other words, It will jump to 1.1575/1.1679 levels and back to close below 1.1466 levels on a weekly basis , If seen , It will fall to 1.0461 levels , sooner or later, just a matter of time !!!
Second Scenario : I think this option is unlikely since we are below weekly EMA(30), but noting impossible ?!!
Anyway; as long as 1.0848 support holds on a weekly closing basis , a higher leg above the 1.1466 levels couldn’t be ruled out , If seen , It will target 1.2200 levels..
Conclusion : To prevent the risk of a return to the 1.0461 levels , the EURUSD will have to hold above the 1.1466 levels on a weekly closing basis,otherwise ; It will remain vulnerable to the downside even in case of recovery !!
Note : The pair was rejected from yearly chart support at 1.0507 ( 2002 high ) , according to yearly chart , fall from 1.6035 is seen as a corrective pullback as long as the pair trades above 1.0507 levels , a cut below 1.0507 will open 0.8000 levels in the upcoming years…however; If the pair mange to take out 1.1466 on a weekly closing basis, I think 1.0461 will become history , and the pair may fly once again towards 1.4000 levels !!!!
Further Reading :
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