Day trade
Trade view / 23 May 2016 at 7:34 GMT

Corrective EURUSD rally to be short-lived

Analyst / PIA First
United Kingdom
Instrument: EURUSD
Price target:
Market price:

USD Index – Closed Friday with little net change and just inside the daily Ichimoku Cloud. The overnight dip has been bought into just under bespoke support at 95.12. There is a 261.8% extension level at 95.76 (from 91.88-93.36). The intraday chart still highlights higher highs and lows, and we look for dips to be bought into.

EURUSD – The monthly chart highlights the pair in a bearish channel formation. It is likely to post a bearish Outside Candle this month if the major currency pairs hold around current levels this week. The long-term focus is still on parity (the Fibonacci confluence area).

EURUSD monthly chart - focus on parity
EURUSD M Source: Saxo Bank

The daily chart highlights the pair in an Expanding Wedge formation that has an eventual bias to break to the downside. Next support is seen at 1.1143 (Ichimoku Cloud base) and, with DeMark likely to post a 9 count tomorrow, this will likely hold. The 261.8% extension from the last move is not seen until 1.0943

EURUSD daily chart - selloff stalls
EURUSD D Source: Saxo Bank 

After posting two small daily candles, the intraday chart highlights a corrective channel formation. Trendline resistance is seen at 1.1252. We also have bespoke resistance at 1.1257, the Marabuzo from May 18 at 1.1263, and the base of the Value Area from the May 18 at 1.1253 (Market Profile). We look to sell into rallies today.

EURUSD one-hour chart - corrective channel
Source: Saxo Bank

Management and risk description


Entry: Selling at 1.1253

Stop: 1.1293

Target: 1.1143

Time horizon: today only 

— Edited by John Acher

Non-independent investment research disclaimer applies. Read more
Anton Bushin Anton Bushin
Hi Ian, today this idea is not applicable?
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
morning Anton ..... 1.1242 is seen as the prime short entry today.


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