European Union Foreign Exchange

Euro / Dollar Weekly Technical Analysis

The EUR/USD concluded the week effectively unchanged, despite ranging over 170 pips. Since late January, upside has been capped by a major-league weekly supply zone coming in at 1.2569-1.2287.

Weekly gain/loss: -0.07%

Weekly closing price: 1.2303

What’s also notable from a technical perspective here is the weekly Fibonacci resistance cluster (see below for the values) and long-term weekly trendline resistance (extended from the high 1.6038) positioned around the top limit of the said weekly supply. Should sellers crank it up a gear this week, downside targets fall in around the weekly support band at 1.2044, shadowed closely by the 2018 yearly opening level at 1.2004.

  • 61.8% Fib resistance at 1.2604 taken from the high 1.3993
  • 50.0% Fib resistance at 1.2644 taken from the high 1.4940
  • 38.2% Fib resistance at 1.2519 taken from the high 1.6038

The story on the daily timeframe, nevertheless, reveals that the major has been interacting with a daily support zone seen at 1.2246-1.2164. Also seen nearby is a daily trendline support etched from the low 1.0569 and daily support at 1.2070 – note that this level fuses nicely with a daily AB=CD (black arrows) 127.2% Fib ext. point at 1.2050. Traders are advised to keep close tabs on these areas as we move into the new week.

euro dollar 03112018

Friday’s US headline payrolls created 313k jobs in the month of February, vastly surpassing expectations. However, the pace of wage growth eased. The overall market impact was, therefore, subdued. H4 movement challenged nearby H4 support at 1.2279 and formed a H1 indecision candle. The day concluded a few pips north off 1.23 after modestly grinding lower from session highs of 1.2334.

Potential trading zones:

According to our analysis, the sellers, despite trading within a major weekly supply right now, have plenty of work to do should they intend on pressing lower this week. The top edge of the daily support area at 1.2246, coupled with a 61.8% H4 Fib support at 1.2265, a H4 support at 1.2279 and the round number 1.23, offers substantial downside support within a 50-pip range. As you can see, trading this market medium/long-term is challenging.

euro dollar 03112018 h4

In view of this, neither a long nor short seems attractive at this time on the euro / dollar currency pair. This is where the most important trading skill comes into play: PATIENCE.

Data points to consider: No high-impacting news on the economic calendar.

Areas worthy of attention:

Supports: 1.23 handle; 1.2246-1.2164; daily trendline support; 1.2050/1.2070; 1.2004/1.2044.

Resistances: 1.2350; 1.2569-1.2287; weekly trendline resistance; weekly Fib resistances.

Analysis provided by IC Markets

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