Potential longs on the EUR/USD...

2018년 9월 28일

From an open of 1.1736 to a close of 1.1640, the single currency concluded Thursday’s sessions down 0.8%. USD bulls were firmly on the offensive in recent trade thanks to robust US data and a recovery in yields. According to the latest GDP report, the US economy expanded at its fastest pace in nearly 4 years, confirmed at an annual rate of 4.2%. US Durable goods also doubled expectations, though the increase was largely due to Boeing orders.

H4 movement, as can be seen from the chart, ended the day closing within striking distance of demand plotted at 1.1609-1.1632, after a number of key tech supports were engulfed. Positioned just north of the 1.16 handle and September’s opening level at 1.1595, this demand area is likely to enter the fray today. It may also be worth noting the RSI indicator is displaying a firm oversold/divergence reading at the moment.

On a wider perspective, weekly sellers spun off into a phase of selling from its resistance area drawn from 1.1717-1.1862. Further downside is possible according to this timeframe, as the next obvious support target does not enter the fight until demand penciled in at 1.1312-1.1445. Daily support at 1.1723 (now acting resistance) was obliterated in the shape of a near-full-bodied bearish candle yesterday, leaving price action free to drop down towards the 1.1509-1.1600 support area.

Areas of consideration:

On account of the above, weekly price suggests we may be heading for further selling, while daily movement indicates potential support may be seen off of 1.1509-1.1600. Note the top edge of this area represents the 1.16 handle on the H4 scale.

Should the market observe a H4 bullish pin-bar formation that pierces the current H4 demand and taps the 1.16 handle (effectively bringing in daily buyers), a long on the close of this candle could be an option, targeting July’s opening level at 1.1675.

Today’s data points: Spanish Flash CPI y/y; EUR CPI Flash Estimate y/y; US Core PCE Price Index m/m; Chicago PMI; US Revised UoM Consumer Sentiment.