Last year was flagged by a strengthening Euro as the EURUSD started its upward trend in March 2020 from 1.0637 and reached its high in January 2021 at 1.2350, gaining 16%. This year the single European currency has to surrender along with a downside trend that started in January. Even a rally to 1.2250-1.2260 in May this year finished early with a decline that has lasted for five months until now.
This year’s lows in EURUSD was formed at 1.1524. But this movement that started on September 3 is now forming a “downward wedge” that is usually considered to be a reversal pattern. Among lows on September 30, October 6 and October 12 on both H1 and H4 timeframes we may see convergences. Usually such a reversal patter is accompanied by triple convergences, especially if the price is close to the important support level that is now located at 1.15. All these indications provide a strong reason to expect an upside correction of the Euro. This correction would be confirmed once the level at 1.1641 is reached. After this the Euro will have strong chances to move further to 1.1700-1.1730 and beyond to 1.1800-1.1815.
So, you may ask why the 1.1641 level is considered to be a reversal confirmation. And that is because the decline that began on October 4 is forming the “downward wedge” pattern by itself. So, we have a “downward wedge” inside the elder timeframe “downward wedge”.With this in mind we may open buy positions if the EURUSD would cross the resistance line of the junior “downward wedge”, above 1.1570.
So, what could be the upside trigger for the Euro? It could be the FOMC minutes that are going to be released on Wednesday. The hot topic, however, is the tapering of the Federal Reserve (Fed) bond buying program and the schedule concerning the uptick of interest rates.
According to CME, investors bet on interest rate hikes in September and November 2022. The possibility of such an event is at 41.7% and 40% respectively. Any hikes made to the interest rate after these times would support the Euro.
This year’s lows in EURUSD was formed at 1.1524. But this movement that started on September 3 is now forming a “downward wedge” that is usually considered to be a reversal pattern. Among lows on September 30, October 6 and October 12 on both H1 and H4 timeframes we may see convergences. Usually such a reversal patter is accompanied by triple convergences, especially if the price is close to the important support level that is now located at 1.15. All these indications provide a strong reason to expect an upside correction of the Euro. This correction would be confirmed once the level at 1.1641 is reached. After this the Euro will have strong chances to move further to 1.1700-1.1730 and beyond to 1.1800-1.1815.
So, you may ask why the 1.1641 level is considered to be a reversal confirmation. And that is because the decline that began on October 4 is forming the “downward wedge” pattern by itself. So, we have a “downward wedge” inside the elder timeframe “downward wedge”.With this in mind we may open buy positions if the EURUSD would cross the resistance line of the junior “downward wedge”, above 1.1570.
So, what could be the upside trigger for the Euro? It could be the FOMC minutes that are going to be released on Wednesday. The hot topic, however, is the tapering of the Federal Reserve (Fed) bond buying program and the schedule concerning the uptick of interest rates.
According to CME, investors bet on interest rate hikes in September and November 2022. The possibility of such an event is at 41.7% and 40% respectively. Any hikes made to the interest rate after these times would support the Euro.
