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EUR/USD: Support Holding

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.



Last's Monday's analysis ended with only one relevant prediction:

1. It seems that the uptrend is over for the time being, but the 1.3440-1.3500 zone might well continue to hold for a while at least

Let's take a look at the hourly chart to see how things actually turned out:

EIRUSD H1 11713

The support zone mentioned has indeed held, having been tested and producing a bullish pin bar followed by an eventual price rise. Turning to the future, let's take a look at the daily chart below:

EURUSD Daily 11713

We can see that the well-established support zone from 1.3440 to 1.3475 has held securely, with Monday producing a bullish pin bar on Monday, with that low of 1.3440 holding so far. Each day this week has produced a higher low, and yesterday formed a bullish reversal candle. However this bullish reversal candle is rather weak, leaving a lot of wick on its top.

It is difficult to predict the likely next moves. A period of weak bullishness / consolidation is probably likely. Traders holding longs should look to lock in profits or take partial profits should the price rise to 1.3574. A bearish reversal candle on the 1 hour chart at this level could be a good bet for a conservative short trade. A bullish reversal candle touching the area between 1.3470 and 1.3440 could be a good bet for a long trade.

We need to see a sustained break above 1.3580 to be confidently bullish, or below 1.3440 to be confidently bearish.

A break below 1.3440 could see price descend all the way back down to 1.3100.

No overall bias, if any bias has to be held, slightly bullish.

Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

 

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