Short term
/
Buy
Trade view / 04 March 2018 at 22:26 GMT

Anticipating a retest of this year’s peak for EURUSD

Managing Director / Technical Research Limited
New Zealand
Instrument: EURUSD
Price target: 1.2538
Market price: 1.2340
Background

Polls are closing in the Italian election as the Asian trading day begins, but the results won’t come out until early afternoon Monday Italian time. So EURUSD will probably trade quietly in the meantime. The SPD (Social Democratic Party) vote in favour of forming a grand coalition with Angela Merkel's conservatives in Germany was expected and has had little impact on opening prices.
 
The main event for EURUSD this week will be Thursday’s meeting of the European Central Bank, where new economic forecasts will be presented. A stronger euro will be offset by stronger growth forecasts, leaving inflation projections little changed, perhaps down 0.1% or 0.2%.

The trade-weighted EUR had declined since the ECB’s January meeting so there are unlikely to be any concerns expressed in the post-meeting statement. Instead expect a repeat of the “patience, prudence and persistence” mantra.

Management and risk description

The euro still displays a developing impulsive (bullish) Elliott Wave sequence from last November’s 1.1555 corrective low; see daily chart below. 

In the short term, resistance lies at 1.2360 and 1.2390/1.2415 with any reaction finding support at 1.2270/1.2230, for the next advance to retest this year’s 1.2555 January peak.

Daily EURUSD chart (click to expand)
EURUSD daily chart
















 Source: ThomsonReuters

Weekly EURUSD chart (click to expand)
Source: ThomsonReuters. Create your own charts with SaxoTrader; click here to learn more.

Parameters

Entry: Will try to buy EURUSD around the mid 1.2200s next few days.

Stop: 50% under 1.2200 and 50% at 1.2153 (both initially).

Target: 1.2538.

Time horizon: Allow a few weeks.


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— Edited by Robert Ryan

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2y
leotdipl leotdipl
Your analysis is interesting )
I would like to share my longer perspective.
The period 2008-2018 resembles the years 1992-2002. Then and now we have a ten-year flag. In 2002, there was a mountain exit. We reach the Critical Point, that is, to the upper limit of the inheritance channel, Target around 1.26-1.27. I am asking for your opinion. Can it be the same now? Thank you.

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