EURUSD First buy signals. 1.1100 possible medium-term.

The EURUSD pair has been trading within a multi-month Channel Down with the Ukraine - Russia war acceleration the weakness. More recently, after a rejection on the 1D MA50 (red trend-line), the price entered a selling sequence below the 4H MA50 (blue trend-line) that broke below the previous Lower Low and Support of the Channel.

This week we see the first signs of a potential, medium-term trend reversal, as the 4H RSI is rebounding on a Higher Lows trend-line since April 06. This is what we call a Bullish Divergence, as despite the price action being on Lower Lows, the RSI is on the opposite (Higher Lows) showing a potential trend reversal as the selling gets weaker.

In fact, we've seen the very same 4H RSI Higher Lows Bullish Divergence on all previous price Lower Lows of the Channel Down. More specifically, the current phase resembles the 1D MA50 rejection of October 29. As you see both fractals started falling after a price Double Top and halfway through the trend made the 1D MA50 rejection. On November 24 2021, EURUSD bottomed on its new Channel Lower Low and as the 4H MA50 broke, the trend turned sideways within a low gradient Channel Up that ultimately approached the 0.5 Fibonacci level.

If the correlation continues to hold (Channel patterns tend to be symmetrical), then when/ if the 4H MA50 breaks again, expect to see a low slope Channel Up, which if broke upwards can approach the 0.5 Fibonacci. That level is currently at 1.11240 so medium-term swing traders can set a target zone of 1.10700 - 1.11000.



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