EUR/USD Weekly Analysis (Wk Strt 8th April 2012)

EUR/USD 4hr Chart Analysis

EUR/USD Last Week

EUR/USD started the week bound in a range between the 1.3355-1.3375 resistance area and the 1.3265-1.3285 support area.

eur/usd analysis breakout

On Wednesday price broke through the 1.3265-1.3285 and tumbled down for the rest of the week. As you can see on the image below price reached at all three of our support areas.

eur/usd analysis support areas

Going Long on EUR/USD

Buying EUR/USD could be tough this week. There is heavy resistance above last weeks close price at 1.3094. Remember resistance means Sellers so buying into large groupings of sellers can be very dangerous. There is a strong resistance area immediately above last weeks close at 1.3100-1.3125. This is followed by a minor resistance line at 1.3155 and then by another resistance area at 1.3185-1.3205.

eur/usd analysis resistance this week

All of this Resistance means taking a long trade early in the week could be very dangerous. Price may push up but there is no telling when Sellers will flood the market and turn the price around. In my opinion if you are going long early in the week you should aim for small and quick targets.

I have noticed in other EUR/USD analysis that many traders are ignoring the resistance at 1.3100-1.3125. I do see some merit to ignoring the 1.3100-13125 and the 1.3155 levels as they have been cleanly broken recently. However, I still think it would be wise to trade cautiously around these areas. The only reason the 1.3100-1.3125 was broken last week is because the Bears were extremely strong. The Bulls may not find it as easy to break these levels on the way back up.

eur/usd analysis major resistance hurdle

Going Short on EUR/USD

EUR/USD has heavy Support below last weeks close price. The first support area on EUR/USD is between 1.3020-1.3050. This area held well last week and as you can see below it held well three weeks ago when price last approached it.

eur/usd analysis support areas this week
The 1.3020-1.3050 is backed up by a major psychological level at 1.3000 which was the low of of the major bearish move three weeks ago. This could be an extremely tough area to break as there are likely to be a lot of buyers from 1.3050 down to 1.3000.

I would not consider shorting EUR/USD until a clear break of the 1.3000 psychological level/three week low.

After the 1.3000 the next support area is at 1.2970-1.2945. Be aware that there is only 30 pips between the 1.3000 psychological level and the next support at 1.2970.

Ranging on EUR/USD

Considering how many major Support and Resistance hurdles EUR/USD needs to cross to move up or down it is possible that we will see a range. Despite last weeks large Bearish move EUR/USD has been ranging a lot over the last few weeks. I would not be surprised to see ranges resuming this week.

If EUR/USD does fall into a range between the 1.3020-1.3045 support area and the 1.3100-1.3125 resistance area I will be watching closely for reversal trades within the range.

eur/usd analysis ranging this week

Summary

It will be a tough week for both the Bulls and the Bears. On the short side the Bears face a major psych level and the three week low at 1.3000. On the long side the Bulls face a lot of sellers.

Given the challenge for both the Bulls and Bears they may find it easier to stay in a range between the two closest Support and Resistance areas.

Leave a Reply

Your email address will not be published.

8 thoughts on “EUR/USD Weekly Analysis (Wk Strt 8th April 2012)
  1. Hi Nick, here is my take on the Eurusd , It seems that the weekly down channel is being respected by the big push down last week therefore it may well continue with the big downward push to complete the down channel over the next few weeks.  the target to the other side of the channel is over  a thousand pips and therefore next week could well see areas of support being treated as they were last week.  Price may well bounce up to the 1,3150 area to gain momentum for the next push down below the 1,3 level.

  2. Hi Nick, considering the bears had a great party last week. The bulls could rally to 1.3130 then would expect the bears to come in and push down to 1.3050 area.  If support does not hold then I would expect a move to 1.3020, 1.3000. I feel that ther would be a steady move through support areas below this with rallies back to prior support.  I am looking at a long term target around 1.2210 – 1.2200.  Still it can range in the areas you suggested.  Still my options are open.  Will watch with interest during the week

  3. Good “heads up” piece on price action. Will see if some ranging happens this week. I think it will, but the market will let us know what it wants to do. In the meanwhile, your buy and sell areas are worth watching. Keep it coming!

  4. Hi Nick, a very comprehensive analysis. I enter short on the Euro last week at 1.3300 with an initial target at 1.3000. The bears did some wonder last week pushing the price down to the area around 1.3050 where the support did hold.  I am looking to the breaking of the support at 1.3050 and for the price to move towards 1.3000.

    The price might still range between 1.3050 and 1.3150 as you might have analysed, but I would still expect a push towards 1.3000 and below to occur.

  5. Don’t miss this Head and Shoulders on the daily.  We have a left shoulder, a head, and a right shoulder with a clear neck.  Current price is stalled at the neckline, but technically and fundamentally any short under 1.3160 is a good short and worth holding to 1.3000 and ultimately 1.2670.  There is massive resistance between 1.3160 and 1.3190.  Sell the pull backs on H1 and hold to at least 1.3000.  Price below 1.3000 should not be taken on break, but you should fade these areas on H1 near term support and resistance, but only if there is no fundamental strength that would cause sellers to blow through 1.3000.  I would not hold long positions off 1.3000 for too long, most likely only 1 or 2 days max as there could be enough demand there to buy up 100-150 pips.  If you are short and holding, price below 1.3000 is worth adding on to increase profit potential.  This is a nice long term set up, but patience must be in place to take advantage of this.  I currently have a short on E/U with a stop over 1.3160.  There’s some breathing room for bulls, but if you look at the D1 candles your last several are telling.  After that full day of selling on April 5 you have a small bull inside bar, then an outside bar that is a dragon fly doji (close enough), but the bulls could not hold the line and yesterday bears drove back down and held near the daily low.  This looks to continue in my opinion and with 1.3000 in site I’m not sure buyers will be aggressive as sellers keep selling back into these lows.  The buyers will wait for 1.3000.