EUR/USD - Retracement to the Upside Still Expected

By: Doug Rosen

In my analysis yesterday I stated that after the massive drop this pair has experienced in the last couple weeks, and as Bearish as this pair still appears, continued retracement is still expected. We have just began to touch the 38.2 Fib level of the previous swing and keep in mind a swing fib is a swing fib and a move fib is a move fib. If we consider the entire move down we are at the 21.4 fib level which is a fib level I don't take too much notice to but the recent swing we are just at the 38.2 Granted, price could start to roll down from here but I am not so sure if that is going to happen today. We did retrace a bit yesterday but not quite enough.



On the Monthly Pivots we are just sitting on the M0 which is a reversal support fib which is bullish. On the weekly pivots we are between the M2 and Central Pivot which is 125 pips upward so there are no Weekly pivot levels to interfere with price and on the Daily Pivots we start out above the Central Pivot Point which is bullish in itself. On the weekly chart price is nearly 180 Pips away from the 5 ema and I believe that price and the 5 need to meet up before continuation to the downside will occur. On the daily chart it price can go either way but I continue to see higher highs and higher lows so there is no reason for me to think price is going to roll over just yet.



Looking at the 4 hour chart the upper Bollinger Band is beginning to point up, the 5 ema has recently crossed above the 13 ema and price is now above the 21 ema, all bullish signs. On the 1 Hour chart we were riding the 21 ema and it appears the 13 ema is taking control and I think the 5 ema wants to give price a lift upward. Price is also climbing up from a 50.0 fib of the most recent swing high. I would also like to note that price is trapped within a channel that is obvious on the 1 Hour and 15 Minute charts and is in the center of this channel The top of this channel overlaps with the 144 ema at 1.3796 so I do expect price to make its way there before it hits any real major resistance.



I would look for reason to long this pair to the 1.3800 but only off of a support area. I would expect price to fall a bit to the 1.3700 area before continuing upwards. At this level I would feel free to enter my long since it is a psychological level and overlaps with the Daily Central Pivot as well as the 15 minute 233 ema with the 144 ema prepping to cross above it. Price could still fall to the daily M2 as well before continuing upward so let price action be your guide.