So, starting with the fundamentals, we see no major news at the start of the week. However, there is volatile EUR news on Wednesday, with the main refinancing rate being released as well as the Monetary Policy Statement at 12:45 GMT. The Monetary Policy is crucial to understand data on interest rates and inflation.
On to the technicals and starting on the daily timeframe, we can see a clear downtrend with a range of lower highs and lower lows. We have a descending trend line that was respected, however we saw one spike/false break-out by +/- 50 pips above the trend line. We then saw price snap back lower from this region of resistance met.
At this current moment in time it is clear we are currently consolidating within a +/- 70 pip range. We are also sitting at an interesting daily key level where I see two scenarios playing out. We can either treat this daily key level as support and spike back up to test the descending trendline, as well as the 61.8% Fibonacci level marked in a red rectangular strip, create a reversal pattern, a lower high and in turn a new leg to the downside. OR, what I see having more potential is price falling from its current position.
Reason being, We can see this triangle chart pattern and a flat base on the daily key. We've had 3 drives into this area of support. The first drive to the low was Mid-November, second drive early-March and now we currently testing it for the third time. We have reached the base and we have not seen a bounce or any buying pressure. Hence, my thoughts of going short sooner than later. If we put the EMA's on, we can see a clear bearish trend as well as we have rejected the blue MA, with price trading below both EMA's.
Dropping down to the 4HR timeframe, I have a counter trend line drawn, which price broke below on the 3rd touch as well as it closed below. A retest and bounce back lower is expected. Drawing out a Fibonacci on the most recent High to Low, we can maybe see a retracement of 30 pips before going lower after seeing a rejection of resistance, the counter trend line, EMA's as well as the Fibonacci, all giving us confluence to go short.
Ultimately, I'd like to see price come back down to the 1.0800 price region as price gapped in April 2017 and we haven't seen this correction in the market as of yet. However, my first take profit will be the weekly key level of 1.10900. As always traders, have a great trading week, ensure you are using correct and suitable risk/money management as well as ensuring your psychology is 100%.
On to the technicals and starting on the daily timeframe, we can see a clear downtrend with a range of lower highs and lower lows. We have a descending trend line that was respected, however we saw one spike/false break-out by +/- 50 pips above the trend line. We then saw price snap back lower from this region of resistance met.
At this current moment in time it is clear we are currently consolidating within a +/- 70 pip range. We are also sitting at an interesting daily key level where I see two scenarios playing out. We can either treat this daily key level as support and spike back up to test the descending trendline, as well as the 61.8% Fibonacci level marked in a red rectangular strip, create a reversal pattern, a lower high and in turn a new leg to the downside. OR, what I see having more potential is price falling from its current position.
Reason being, We can see this triangle chart pattern and a flat base on the daily key. We've had 3 drives into this area of support. The first drive to the low was Mid-November, second drive early-March and now we currently testing it for the third time. We have reached the base and we have not seen a bounce or any buying pressure. Hence, my thoughts of going short sooner than later. If we put the EMA's on, we can see a clear bearish trend as well as we have rejected the blue MA, with price trading below both EMA's.
Dropping down to the 4HR timeframe, I have a counter trend line drawn, which price broke below on the 3rd touch as well as it closed below. A retest and bounce back lower is expected. Drawing out a Fibonacci on the most recent High to Low, we can maybe see a retracement of 30 pips before going lower after seeing a rejection of resistance, the counter trend line, EMA's as well as the Fibonacci, all giving us confluence to go short.
Ultimately, I'd like to see price come back down to the 1.0800 price region as price gapped in April 2017 and we haven't seen this correction in the market as of yet. However, my first take profit will be the weekly key level of 1.10900. As always traders, have a great trading week, ensure you are using correct and suitable risk/money management as well as ensuring your psychology is 100%.
Comment:
ECB Press Conference was not added in, take note of this volatile fundamental release.
Comment:
We have shown a nice bounce off support so the 61.8 / 78.6 and 3rd touch of descending trend line is next reversal target !