Today is important. So is tomorrow. This market has been in a steady downtrend for some time now, with regular oscillations indicative of healthy profit taking activity. Both the US and European markets are going through turbulent times manifesting in US/China trade talks, calls for impeachment over alleged improper presidential activities and last minute negotiations over Britain's departure from the European Union. Today, the EURUSD market ascended into a cluster of potentially strong price/time barriers. This could certainly be another interim high leading to a continuation of the downtrend. Let's go through some of the key features of this chart with our standard series of Analysis Points (APs).
AP1) The first indication that the market could be about to reverse is its proximity to the 0.5 retracement level. This comes from the Fibonacci levels, shown in yellow, which are obtained by dividing the range from the point labelled C and the point labelled D. The letters are in pink.
AP2) Observe the downward sloping solid lines of red and cyan. They are the product of a pitchfork using points A,B and C in its construction. The market has been responsive to these trendlines , including the median line often enough to place some degree of confidence in them as price barriers. Notice that the cyan trendline extending from point C in the pitchfork coincided with the 0.5 level from AP1 at the current time in the yellow circle. Now we're starting to see some confluence in signals.
AP3) This is a simple one. The green line which is generally falling throughout this chart shows a 100 day moving average. It too coincides with the barriers from AP1 and AP2 in the yellow circle. This moving average has potential to act as resistance as the market rises into it. It has provided support and resistance on a number of occasions in this chart.
AP4) Finally, consider the stochastic oscillator shown at the bottom of the chart. It is set to highlight points where the oscillator exceeds a reading of 90 or is below a reading of 10. Today, it is at the highest level shown in this chart. The stochastic has only been close to this level twice before in this chart and on both occasions, the market's uptrend became exhausted and reversed. These are shown by the white dashed vertical lines. This cn be considered another bearish signal.
There are a number of significant barriers for this market at the current price and time. Remember that this market is in a downtrend so the bearish bias of these signals coincide with the trend sentiment. Today's close price could be a significant indicator of how the market will respond to this cluster. However, be aware that Monday could open with a gap following what may be a shocking weekend for investors, particularly surrounding Brexit. If the market powers through this barrier and breaks to the upside, it could be a sign of bullish strength or of a market that is adjusting to new information. The next few days of price action will be very interesting.
AP1) The first indication that the market could be about to reverse is its proximity to the 0.5 retracement level. This comes from the Fibonacci levels, shown in yellow, which are obtained by dividing the range from the point labelled C and the point labelled D. The letters are in pink.
AP2) Observe the downward sloping solid lines of red and cyan. They are the product of a pitchfork using points A,B and C in its construction. The market has been responsive to these trendlines , including the median line often enough to place some degree of confidence in them as price barriers. Notice that the cyan trendline extending from point C in the pitchfork coincided with the 0.5 level from AP1 at the current time in the yellow circle. Now we're starting to see some confluence in signals.
AP3) This is a simple one. The green line which is generally falling throughout this chart shows a 100 day moving average. It too coincides with the barriers from AP1 and AP2 in the yellow circle. This moving average has potential to act as resistance as the market rises into it. It has provided support and resistance on a number of occasions in this chart.
AP4) Finally, consider the stochastic oscillator shown at the bottom of the chart. It is set to highlight points where the oscillator exceeds a reading of 90 or is below a reading of 10. Today, it is at the highest level shown in this chart. The stochastic has only been close to this level twice before in this chart and on both occasions, the market's uptrend became exhausted and reversed. These are shown by the white dashed vertical lines. This cn be considered another bearish signal.
There are a number of significant barriers for this market at the current price and time. Remember that this market is in a downtrend so the bearish bias of these signals coincide with the trend sentiment. Today's close price could be a significant indicator of how the market will respond to this cluster. However, be aware that Monday could open with a gap following what may be a shocking weekend for investors, particularly surrounding Brexit. If the market powers through this barrier and breaks to the upside, it could be a sign of bullish strength or of a market that is adjusting to new information. The next few days of price action will be very interesting.
