EURUSD is showing weakness in daily forex chart analysis. As we explained in previous price action analysis, EURUSD has entered in a bearish trend. Let us go through the details.
Price action and technical analysis of Forex pair EURUSD
According to our DLS method, let us have an outlook of current Direction, Levels and setups.
From the daily chart given below, you can see that price has broken out of the bullish price channel. It is a good indication of start of a bearish trend or a consolidation period.
Also the price has reached the first support of 1.1662 too.
Let us see all possible moves in coming week. We will start with most possible scenario
EURUSD expected moves : Scenario 1
We can see from the first support level of 1.1662, price has made a nearly possible pin bar. Another thing to notice is the price is at the bottom of the price channel. So the most probable move will be a push back to 1.1832 resistance level where it meets both the resistance and upper band of price channel.
The resistance level around 1.1830 is a key area where price has to make a decision to find new direction. Arguably it will take a bearish reverse from that area. The reasons are the price channel and the resistance level.
Even at this level, least probable scenario can be a bullish breakout from price channel and go for a bullish rally towards 1.2000 levels. Considering the overall trend in monthly and weekly trends, this is least expected as of now.
When to enter in this possible bull move?
Every trader must have their own entry/exit rules and trading time frame. In the same way, @tradingol follow a Daily and 4 Hour time frames to trade. To enter a daily time frame trade, we must get an entry signal from 4H time frame. Let us see the 4H chart.
So the 4H chart is indicating a possible resistance from trend line. We can go for a long trade once the candle is closed above the trend line.
EURUSD expected moves : Scenario 2
This one will happen if the support of 1.1662 is broken directly and price takes a bearish ride. Let’s see the chart.
This is going to be a strong downward pull which is not expected according to the price action setup, we can assume from the long tail candle formed at the support level of 1.1662, in daily chart. Still, this possibilty must be considered during the Asian market hours.
EURUSD LIVE Chart