Overview :
The disability of bears to push the EUR/USD past past recent bottoms around 1.2254 should spark some consolidation in the short term (1h chart).
Last week, The EUR/USD pair has broken resistance at the level of 1.2086 which acts as a support now.
Also, you might note the trend is still above the 100 EMA for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. Hence, the price spot of 1.2086 remains a significant support zone.
Besides, the RSI navigating the nearness of the 65 level. Likely move beyond this region should move the way for a test of the so far peaks around 1.2190. Equally important, the RSI is still calling for a strong bullish market as well as the current price is also above the moving average 100 too.
Consequently, there is a possibility that the EUR/USD pair will trade upside. The structure of a scaling does not look corrective.
Right now, the EUR/USD pair was trading around the area of 1.2100 - 1.2150. Today, the level of 1.2122 represents a daily pivot point in the H1 time frame.
The pair has already formed minor support at 1.2106 and the strong support is seen at the level of 1.2054 because it represents the weekly support 1.
So, major support is seen at 1.2054, while resistance is found at 1.2190.
If the pair closes above the daily pivot point of 1.2122, the EUR/USD pair may resume it movement to 1.2190 to test the daily support 1.
From this point, we expect the EUR/USD pair to move between the levels of 1.2054 and 1.2220 in coming two days.
As a result, sell below the daily pivot point of 1.2122 with targets at 1.2190 in order to form a double top.
Furthermore, if the EUR/USD pair is able to break out the top at 1.2190, the market will climb further to 1.2220 (daily resistance 2).
In spite of that, stop loss should always be taken into account, accordingly, it will be of beneficial to set the stop loss below the last bearish wave at the level of 1.2020.
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Exponential Moving Average (EMA)
- EMAs gives more weight to the most recent periods, because moving average is quick moving and works well at showing recent price swings. On the other hand, Simple Moving Average (SMA) displays a smooth chart which which removes most false signals. Moreover, with using SMAs, you can know whether a pair is trending up or trending down. Consequently, if you want to obtain a clearer signal of whether the pair is trending up or down if you combine two or more moving averages because simple and exponential are the two major types of moving averages.
- Example1 :
- Eimple Moving Average (SMA) is formed by calculating the average price of a security over a specific number of periods.
- Eimple Moving Average calculation :
- First day of 5-day EMA: (1.2122 + 1.2180 + 1.2146 + 1.2190 + 1.2123) / 5 = 1.2152.
