Yellow zones- critical zones based on the monthly/weekly timeframe
Red zones- critical zones based on the daily timeframe
Blue horizontal lines – critical levels based on the 4h timeframe
According to last week’s EUR COT Report we can see that the long contract sizes are not only dominating the long/mid-term trends, but also there was a huge increase from last week as well. Crucial for the future price development will be the next COT report.
After price got rejected from the monthly critical near the 1.14200 area on the 10. June, it made a small correction towards the daily critical at the 1.11800 mark.
No further strong sell pressure was noticed after the rejection. Multiple attempts were made to break into the monthly critical and none of them had a strong rejection as the one on the 10. June. This created a new uptrend on the 4H time frame and it has also built new higher highs. The correction towards the higher lows was done due to the new upper-trendline which also plays the role of a resistance zone.
Now we have 2 possible scenarios and next week’s COT Report will be the decisive factor for which one will happen:
1. Price is already doing a small correction after the attempt to break the monthly critical. Then it goes for a close above it, respecting the upper trendline. After that, a touch with the upper trendline of the closed triangle near the 1.16200 will happen. And then finally the price will be able to do a strong correction towards the 1.11000 mark.
2. Price loses its buy force after a second attempt for a close above the monthly critical is made. This will result in a new downtrend towards the 1.11000 mark, while creating a “M” formation on the 4H timeframe. In order of this to happen, a strong rejection from the liquidation zone above the monthly critical (1.14300) must take place.
Happy Trading!
Red zones- critical zones based on the daily timeframe
Blue horizontal lines – critical levels based on the 4h timeframe
According to last week’s EUR COT Report we can see that the long contract sizes are not only dominating the long/mid-term trends, but also there was a huge increase from last week as well. Crucial for the future price development will be the next COT report.
After price got rejected from the monthly critical near the 1.14200 area on the 10. June, it made a small correction towards the daily critical at the 1.11800 mark.
No further strong sell pressure was noticed after the rejection. Multiple attempts were made to break into the monthly critical and none of them had a strong rejection as the one on the 10. June. This created a new uptrend on the 4H time frame and it has also built new higher highs. The correction towards the higher lows was done due to the new upper-trendline which also plays the role of a resistance zone.
Now we have 2 possible scenarios and next week’s COT Report will be the decisive factor for which one will happen:
1. Price is already doing a small correction after the attempt to break the monthly critical. Then it goes for a close above it, respecting the upper trendline. After that, a touch with the upper trendline of the closed triangle near the 1.16200 will happen. And then finally the price will be able to do a strong correction towards the 1.11000 mark.
2. Price loses its buy force after a second attempt for a close above the monthly critical is made. This will result in a new downtrend towards the 1.11000 mark, while creating a “M” formation on the 4H timeframe. In order of this to happen, a strong rejection from the liquidation zone above the monthly critical (1.14300) must take place.
Happy Trading!