On this zoomed out chart we can better see all the important support and resistance zones. The pair finally broke below the 1.10 level but still there has been no significant follow-through to the downside. And at the moment, it seems that things will stay like this on EURUSD, rangy and very low volatility.
There are a lot of strong support levels on the way to 1.05 and it will take a lot of things to line up fundamentally to push EURUSD down.
Resistance to the upside stands at 1.1150 – 1.12, then 1.14 and finally the strong multiyear 1.16 – 1.17 resistance area.
The MACD indicator stands indecisive as the market is trading in a choppy range for a long time.
EURUSD Daily chart – Low volatility, still ranging
Here we can see that the pair traded the middle weekly pivot point and fell below it again. It looks like it’s headed to complete the harmonic butterfly pattern we’ve drawn on the chart since last week.
The completion point of the butterfly (1.09 handle) will be a strong support area aided by the Brexit low. So, if you are short this would be a nice target to take profits.
At that point, you can even consider trading the range by going long from 1.09 targeting a move back to 1.1150.
EURUSD 4h chart – On the way to complete the harmonic pattern
On this chart, the well-established bearish channel is most important. Selling the pair near the resistance trendline will be a good strategy with a very tight stop loss and targeting the 1.09 level (strong support as we discussed on 4h timeframe).
On the other hand, if the channel is broken to the upside then that would likely open the way to the 1.1150 resistance area. The weekly pivot resistance 1 at 1.1050 would be mild resistance in this case.
EURUSD 1h chart – Down channel intact for now
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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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