The EURUSD pair dropped after the speech of ECB president Draghi on Thursday. In the last week, the EURUSD pair has fallen after hitting the resistance level at 1.0716 level. The traders were expecting more hawkish tone from the Draghi but traders were disappointed and enter short after the speech. However, Draghi’s points of views about inflation are not up to the mark and not very much supportive. For this reason, the EURUSD pair moved lower after the Draghi’s comment.
In the upcoming week, there is no major news release for the U.S economy. However, on Monday the ECB president will speak at the awarding of the Premio Camillo Cavour, in Italy. If his speaks comes with some positive view then we might see a bullish run in the EURUSD market. Other than his speaks there are not much important news release in the market so we are not expecting a major breakout going to happen in the market. That means there will be low volatility in the market and we might see some sideways trading in the EURUSD pair in the next trading week. Many profession traders might sell the pair at this current point, selling this pair at this point might be tempting because of a minor bullish trending is going on the market.
In the earlier part of the last trading week, the pair lost its uptrend momentum after the pair hit the 38.2% Fibonacci level (swing high 9th November 2016 to sewing low 3rd January 2017), the pair fell after hitting the key resistance level at 1.0720, this key resistance level limit the upside run for this currency pair. The initial bias for this currency pair in the upcoming trading week is neutral since there are not so many important news in the next trading week. But we might see another fall from this resistance level, The pair might fall to 1.0680 level which is the next support level for this pair, If sellers want to take control from the buyer again then they need to breach this support level. If somehow seller can manage to break this level then we might see pair test the minor support level at 1.0620 level. Though it is a minor support level but we might see some retracement from this support level. If there is not enough support then we might see a sharp fall to the EURUSD pair. If the pair breach this support level then the pair might hit the very strong support level which is on 1.0500 level. This is the very strong technical support level for this pair. Every professional price trader might look this level so closely and we might see a strong rebound from this level. Since many professional traders are looking for a long entry from this level then the traders should use this level to make some profit by entering long from this support level.
On the other hand, if we look at the upside then the current level at 1.0720 level is the strong resistance level because this is the 38.2 Fibonacci level. Because buyers are controlling the market now so we might see a break from this resistance level. If pair manage to break this level then we might see a strong uptrend in the market. The pair might hit the daily 100 day moving average which is at 1.0830 level. This level is also the 50% Fibonacci level for this pair so we might see a strong resistance at this resistance level. We might see the pair rebounded from this resistance level. Many price action trader might enter short in this level so this is a great opportunity to make few pips from this resistance level.
The pair remains bullish in the last trading week. The pair closed broadly higher on the last trading day also. In the next trading week if the buyer can push the market up and break the key resistance level which is at 1.0730 level then the price might test 1.0830 level. If buyer manages to break that strong level also then we might see a bullish run until the pair hit the 61.8% Fibonacci level at 1.0941 level. If the currency pair manages to breach that level then we might see a test in 100 weekly moving average which should limit the upside run for this currency pair.
On downside there is not so many obstacle in the weekly chart. We might see the pair touch the 1.0500 level which is the strong support level and we might see pair rebound from this price level. If this support level cannot push the price up then this might be affect badly for EURUSD a break from that level will confirm more bearish momentum for the pair. And we might see a sharp fall in the currency pair and the pair might touch the 1.0356 level.
Summary: The EURUSD pair is showing some nice bullish price action confirmation signal in the daily and weekly chart. Many professional price action traders have already entered long in this currency pair. In the current situation considering all the parameter and fundamental factors, the EURUSD pair is in a bullish mode. But in the next trading week we might see some sideways movement in the currency pair. Look forward to using this opportunity and buy from the dip and sell from the top might give you some profit.