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

Corrective EURUSD rally to be short-lived

Analyst / PIA First
United Kingdom

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
24 May
Anton Bushin Anton Bushin
Hi Ian, today this idea is not applicable?
24 May
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
morning Anton ..... 1.1242 is seen as the prime short entry today.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail