Bearish in EURUSD but only selling into rallies

[PIA_First_IC]

USD INDEX- The index has stalled at the 161.8% extension level of 90.25 (from 88.26-89.49). Although the med-term bias remains bullish for the US dollar, some currency majors are highlighting scope for a deeper correction. Bespoke support is seen at 89.94. If we see a break of this area then further support is seen at 89.61, a possible right shoulder of a bullish reverse Head and Shoulders formation. We look for the deeper correction to buy into.

 

For this reason, we look for an upside correction to sell into EURUSD this week.

 

Monthly: In a large corrective channel formation. The trend of lower lows in seen at 1.2670. We have stalled and pulled back from the 38.2% pullback level of 1.2517 (from 1.6038-1.0341)

 

 

Weekly:  A possible Ending Wedge formation. Trend line support is seen at 1.1978. The previous swing low is seen at 1.1553. With bespoke support at 1.1593, we expect a ‘bounce’ higher from this solid support area.

 

Daily: Stalled in front of the 261.8% extension level of 1.2620(from 1.1551-1.1959). The move higher can bee seen in 5 waves (Elliott Wave). With bespoke support located at 1.2123, our risk/reward would be poor to sell from current levels.

 

Intraday (four-hours) – We have stalled at the 161.1% extension level of 1.2212 (from 1.2539-1.2337). The intraday chart (1 hour) posts a DeMark exhaustion 13. Often the indication of a change in the current trend. For these reasons, we look to sell into rallies.

Bespoke resistance is seen at 1.2330-40. This area has been pivotal (swing high from 17th January 1.2324 / swing low from the 30th January at 1.2337).

In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.