Day trade
Trade view / 19 August 2016 at 8:49 GMT

EURUSD's immediate bias is bearish but we prefer to buy dips

Analyst / PIA First
United Kingdom

USD Index – The medium-term bias remains bearish for the USD index but we are holding at the channel base so there is scope for a corrective bounce. We warned of a possible turnaround in the USD index in our tweet this morning. 
USD Index
 Source: Saxo Bank

We're going to look at EURUSD as, using correlation, probably it takes on this USD bounce the heaviest. 

Monthly – Highlights the pair in a corrective bearish channel formation. For the last 18 months we have consolidated and this lack of clear direction (in this timeframe) looks set to continue.
Source: Saxo Bank 
Weekly – We are in a consolidating triangle formation that has an eventual bias to break to the downside. However, we have been using the Ichimoku Cloud as support. Trend of lower highs is seen at 1.1570.
 Source: Saxo Bank
Daily – We have hit and are correcting lower from a Fibonacci confluence area. This is the 61.8% pullback of the 1.1617-1.0913 move (at 1.1348) and the 161.8% extension from the 1.0913-1.1186 move (at 1.1356). Because of the USD bias, we consider this to be a 4th wave correction so would prefer to buy dips than sell into this correction lower. 
 Source: Saxo Bank

Intraday (15 minutes) – The intraday chart highlights a 261.8% extension level (normally exhaustion) at 1.1262 (from 1.1366-1.1326). Bespoke support and solid 2 hour Ichimoku Cloud is seen at 1.1264. The reverse trend line support from the daily channel breakout is at 1.1260. We look for this to hold today.  
Source: Saxo Bank 

We then look for a move higher but will monitor price action for a potential AB=CD formation lower. This is a corrective formation….the medium-term bias remains bullish.

Management and risk description


Entry: Buying a dip at 1.1265-60 area

Stop: 40 pips 

Target: 1.1320 and 1.1350

Time horizon: today only

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
20 August
Gennady Gennady
It did not work, sorry
21 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
it never triggered
21 August
Gennady Gennady
I'm really sorry
21 August
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
no problem at all ;-)


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