EURUSD – Dip buying at 61.8%

[PIA_First_IC]

Monthly: Trading within a bearish channel formation. Trend line resistance is seen at 1.2583. Levels close to the 38.2% pullback level of 1.2522 (from 1.6038-1.0349) attract sellers. We trade to the lowest level in 9 months. This area has acted as resistance in 2016 and 2017 (1.1714 and 1.1616) and now acts as support

 

Weekly: After posting a bearish Outside Week (week 16th April) the major currency pair has broken the Ending Wedge formation to the downside. Six weeks of net losses have resulted in signals for sentiment being at oversold extremes. A 13 (exhaustion count) has been posted on the weekly chart. Levels close to the 261.8% extension level of 1.1490 (from 1.2557-1.2149) have found buyers. This timeframe offers a Morning Star formation and suggests dips will be bought. Bespoke resistance is at 1.1960. A rally to this level could then form a Bearish Head and Shoulders.

 

Intraday 2-Hours: The first corrective leg has been complete with an AB=CD formation at 1.1830. We have seen a correction to the downside.

 

Intraday 4-Hours: Using forward projection, a larger AB=CD formation to target bespoke resistance at 1.1960 would require dip buying at 1.1635. This is the 61.8% pullback level of the last rally (1.1510-1.1837). With these facts in mind, we look to buy into further dips for the next drive higher in the AB=CD formation (buying the CD leg)

 

 

We look to Buy at 1.1670

 

Stop: 1.1550

 

Targets: 1.1950 and 1.2020

 

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.