EURUSD Analysis Today
Looking into past week analysis you can see that I mentioned the price could reach $1.07825 and then bounce back up. On Monday the price continued to move down and reached an area of supply close to $1.07825 and bounced up.
The move up was more retrace than a bounce because the price has reached all two levels I have mentioned, $1.07825 and $1.09860. Those two resistance levels were significant resistance levels for the price in the past, but now they had no meaning.
The reason is in the demand zone close to support $1.07825 which had lots of buyers waiting to enter into the market. On the other hand there were a lot of sellers that wanted to get out of the market. Sellers wanted to get before reaching $1.07825 to avoid locking the profits so they got out at the start of the demand zone.
This scenario pushed the price higher 300 pips in two days which is more than the average daily pip range for EUR/USD currency pairs.
On the move up the price stopped on the confluence level of resistance where horizontal resistance $1.10755 and downtrend channel resistance line are crossing.
That area was the final destion for the price in the bullish move and in the next two days the price returned back down and stopped almost on the same level as the week started.
Since the price is almost on the same price as the week started we can make a conclusion where the price could move this week.
We can look on the chart and find levels with strong influence on the price and levels with weak influence.
Strong levels are $1.10755 on the upper side and $1.07825 on the lower side.
Weak levels are $1.09860 on the upper side and $1.08846 on the lower side.
The price is in the middle of the weak levels and since the market is in the bearish mode I am targeting lower levels this week.
Source: Currency Strength Meter App
The final target is $1.07825 because it is the strongest support the price has in front of it. The weekly support of $1.08846 is not that strong and significant in the current market overview because it did not hold the price in the bearish and bullish scenario in the last two weeks.
The price could stall a little bit, but it will eventually break below.
If the price breaks below $1.08846 on a daily basis we can be sure the price will head down to $1.07825.
The entry level would be around $1.09860 if the price makes a bounce from $1.08846. Stop loss would be at $1.10500 which is above Friday candle high and it will be close to confluence of resistance.
If the price closes below $1.07825 the next support is $1.06736. But to get to this level the price has to show strong selling pressure.
On the upper side we need to see the price above $1.10755 to think about a bullish scenario and seek for bullish entry levels. That is the level the price needs to break above to show some strength that could shift the market sentiment from bearish to bullish.
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