The picture has not changed much since last week as the EURUSD pair is still tightly constrained inside the post-Brexit channel.
One interesting thing to take notice of is this new downward channel that may have already formed on EURUSD, marked with blue dashed lines on the chart. Most notably, an inverted hammer candlestick pattern – a bearish signal was formed on Friday right at the resistance trendline of this (blue) channel.
Further, notice the support trendline from below (also in dashed blue). The price is tightly enclosed by the resistance line of the channel from above and the support trendline from below. Based on in which direction we get a confirmed breakout we can judge where the pair will move next.
A break below the support trendline will clear the path towards the 1.10 level, while a break above the resistance trendline of the channel will open the door for 1.1260 and 1.14.
EURUSD Daily chart – Will the resistance trendline hold?
Here is a zoomed view of the same situation with the weekly and monthly pivot points added. If EURUSD breaks to the downside then the weekly pivot support 1 (1.1078) will be a mild support zone while the weekly pivot support 2 (1.1000), coupled with the monthly pivot support 1 will be the stronger support zone on the way down.
The monthly pivot resistance 1 stands right at the 1.1260 resistance level.
EURUSD 4h chart – A lot of support and resistance nearby!
Take a look at this potential bullish harmonic Gartley pattern with a reversal zone ending right at the 1.10 support zone.
Remember, this pattern can only complete if EURUSD breaks to the downside in which case the Gartley will provide additional buying support at the 1.10 handle, thus in such a scenario, we can expect a strong reaction from the level for sure.
EURUSD zoomed out 1h chart – Nice Gartley pattern, will it complete?
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I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.
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