If you read my yearly forecast for EURUSD pair , EURUSD 2015 Forecasts , we had expected the pair to decline towards the 1.1035 levels as the yearly chart explained , here is a quote from our forecast :
[su_quote]The EURUSD continued its bearish momentum in 2014 , topped at the 1.3993 levels and bottomed at the 1.2097 levels . This development leaves the pair targeting 1.1000 levels , a halt is likely , but a cut would open 1.000 next , further down will pave the way towards the 0.8222 levels (2000 low ) .
On the upside , resistance comes at the 1.2745 levels ( 2014 low ) , sustained trading (monthly) closing basis would open main resistance at the 1.3993 levels where fall resumption is likely , however ; break of 1.3993 levels on a yearly closing basis will suggest that fall from 1.6038 levels ( 2008 high ) is over , If seen , focus will be on the 1.5144 levels ahead of the 1.6035 levels and possible higher !!!
In all , as long as 1.3993 resistance holds on a yearly closing basis , outlook in EURUSD remain on the downside – the upcoming 1 – 3 year(s) , break of the 1.3993 levels on a yearly closing basis should recapture the 1.5144 /1.6035 levels.
Note that losing the 1.2097 levels on a yearly closing basis , will turn 1.2097 from support to resistance level , If seen , strong pressure will be built on the 1.000/0.8220 levels… [/su_quote]
here is the yearly chart we had posted before in the same forecast :
You may read the whole forecast :
What happened Next ?!!!
The pair has declined as we expected , reached and breached below the first yearly target 1.1030 , a halt was expected around this level , however , the pair breached below 1.1030 , reached 1.0461 then returned to 1.1030 levels and formed a hidden bearish divergence at broken yearly support 1.1035 , look at the weekly chart below :
but……..hold on a second ………there’s a lot of interesting things on the weekly time frame , according to weekly time frame , bears are running out of gas , How ?!!
Take a quick look at the weekly chart posted below :
First try :Sellers succeeded to top around 1.1036 and forced the pair to decline , but they failed to break below 1.0461 support …
Second try : Sellers try topping around 1.0848 resistance , what happened next ?? they not only failed to break below 1.0519 support , they also have failed to keep the pair below 1.0848 resistance last week , the key resistance 1.0848 has been broken on a weekly closing basis , what is that supposed to mean ?!!!!
It only means one thing ; bears are running out of gas near yearly support where strong rebound is expected !!!
Conclusion : As long a 1.0461/1.0519 support holds on a weekly closing basis , the EURUSD remains in recovery mode and further upside towards the 1.1036 levels couldn’t be ruled out , break of 1.1036 levels on a weekly closing basis will have large bullish implications towards 1.1533 levels ahead of 1.1997/1.2119 levels , below 1.1036 it will keep consolidating within 1.0461/1.1036 range with possible to break higher , To restore the downside momentum ; losing the key support 1.0461/1.0519 is needed on a weekly closing basis , otherwise the pair will try breaking higher !!!
1.The yearly chart suggests possible rebound from the 1.1030 levels towards the key resistance 1.2000 (2014 low) before the next fall..
2. On weekly time frame , break of 1.1036 on a weekly closing basis will put the pair in extended bearish divergence mode , the extended bearish divergence usually comes in trending market , when the market formed a regular or hidden divergence, but it failed to decline and extended higher .
This scenario means there’s no enough momentum to push the pair lower , as a result the pair will extend higher to get the needed (required) momentum to push the pair lower !!!