eurusd

Technical analysis for EURUSD 14th November – 18th November

There has been a bearish crossover in the 100 and 200 days SMA in the daily chart in the EURUSD pair. The pair has corrected to a great extent in the last week and had a false break above the 200 days SMA. Due to the recent presidential election, the mighty dollar loses its strength at the very beginning but at the end, it becomes significantly strong against its all major rivals in the market. Before it fell sharply on the last Friday the pair managed to hit the high at 1.13000 level which is acted as a strong psychological barrier for the bullish move of the EURUS pair. This sudden spike during the release of the news of the presidential election also washed away most of the bears in the market. After hitting the psychological resistance level at 1.13000 level the pair fell sharply for almost 370 + pips. However, the strong bearish momentum in the market was slowed down by the critical support level at 1.08525 which is also the low of 25th October 2016.The pair managed to bounce a little bit in the north but ultimately the bears again took control of the market. In the upcoming week, the pair is most likely to fall further southward unless ECB president comes out with a hawkish statement in the ECB press conference. However, the downfall of the EURUSD pair is most likely to lead this pair towards the major support level at 1.04628 since the pair has also broken important triangle chart pattern in the daily time frame. According to the triangle chart pattern breakout analysis, the pair is most likely to hit the major critical support level at 1.04628 in the upcoming days.

Daily chart analysis for the EURUSD pair

daily eurusd

Figure: Technical parameter in the EURUSD pair

After the strong bullish correction in the EURUSD pair after the breakout of the triangle chart pattern, the bears has again taken the control from the critical resistance level at 1.13000.The pair hit a low at 1.08303 on the last Friday which also breaches the low of 25th October 2016 at 1.08525.If the pair manages to bounce from this level then we will see a small bullish correction in the EURUSD pair towards the first critical resistance level at 1.09595.A valid break of the price above that level will bring some fresh buying pressure in the market which will ultimately lead the pair towards the next critical resistance level at 1.11371.This level is going to provide a significant amount of resistance to the EURUSD pair since the dynamic resistance of the 100 day SMA also lies at that point. But the pair has very little chance for such a strong bullish correction in the upcoming week since the green bucks have gained enough strength in the market against its major rivals on the eve of the presidential election. If the pair manages to breach the current support level at 1.08525 then we will see a sharp fall in the pair in the upcoming week. The first bearish target for the EURUSD pair would be the next critical support level at 1.06870.This level is going to provide strong support to the EURUSD pair since long-term daily uptrend support level also lines at that point. A valid break of that level will bring further downward momentum in the pair towards the next critical resistance level at 1.04628

Weekly chart analysis for the EURUSD pair

weekly eurusd

Figure: Weekly chart analysis for the EURUSD pair

The EURUSD pair has sharply fallen in the last week after hitting the weekly dynamic resistance level at 1.11629.However, there has been a false spike in the northward but these were very much predicted due to the presidential election. The pair is now gradually descending towards the weekly bullish trend line support level at 1.06870.From that level, the pair might show some bullish momentum in the weekly chart since long-term weekly bullish trend line support lies at that point. The first bullish target for the pair in the weekly chart would be the critical resistance level at 1.08525 (Previous support and low of 25th October 2016).On the contrary, if the pair manages to breach the critical support level at 1.06870 then we will see a sharp drop in the price towards the next critical support level at 1.04628.This level is going to provide a significant amount of support to the EURUSD pair and a valid break of that level will bring strong bearish momentum in the market in favor of long-term bearish trend.

Summary: The EURUSD pair has suffered an extensive loss in the last week and had broken important support level in the event of a presidential election. The pair has very little chance to move in the upward direction in the upcoming week. If ECB president Mario Draghi comes up with a hawkish statement then we might see a weak bullish move in the pair which is most likely to fade away. Considering all the parameters the overall sentiment for the EURUSD pair remains strongly bearish in the upcoming week. The U.S economy is doing pretty well in the recent days and the FED is most likely to hike their interest rate in the month of December 2016.So, unless ECB takes drastic action regarding the current weakness of EURO theĀ  pair is most likely to sink southward with strong bearish momentum. As professional traders, we will be looking to sell this pair at a higher price with bearish price action confirmation signal.

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