The 4-hour chart shows that the EUR/USD pair is trading below the downtrend channel as well as below the 200 EMA and the 21 SMA, showing downward pressure. The key support is located at 1.1718, the line of 0/8 Murray.
We can also observe the Double Bottom technical pattern formed on August 11 and August 17. If the euro remains above the key support level of 0/8 Murray, there is likely to be a bullish rebound.
The downward pressure is expected to ease. Only if the euro consolidates or trades above 1.1718, it may reach the top of the bearish channel around 1.1779. A breakout and consolidation above this level could result in a strong bullish momentum towards the 2/8 Murray resistance zone located at 1.1840.
If the euro-dollar pair fails to break the resistance level of the top of the bearish channel, it could try again to break the support of 1.1718. A break below it will open the possibility of a further decline with the next target around 1.1628.
Meanwhile, the short-term outlook for EUR/USD looks on the downside. As long as it remains below the 200 EMA, located at 1.1806, the downward pressure will remain in place and the euro will continue to fall.
The minutes of the latest Fed meeting will be published at 2:00 p.m. ET. Investors are waiting for some clues as to when a cut in the buying program could take place. This data is likely to give strong volatility to the EUR/USD pair.
If the data is encouraging, the euro is expected to fall and break the support of 1.1700, reaching a low of 1.1630. If the data is negative, the Double Bottom pattern could prevail, and the euro could reach the EMA 200 located at 1.1806.
For now, the key point is to buy above 0/8 of Murray with targets at the 200 EMA. The Eagle indicator is showing a slightly bullish signal.
Support and Resistance Levels for August 18 - 19, 2021
Resistance (3) 1.1806
Resistance (2) 1.1779
Resistance (1) 1.1757
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Support (1) 1.1685
Support (2) 1.1668
Support (3) 1.1652
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Trading tip for EUR/USD for August 18 - 19, 2021
Buy above 0/8 of Murray at 1.1718, with a take profit at 1.1779 and 1.1806 (EMA 200), a stop loss below 1.1680.
Buy if the price rebounds at 1.1685, with a take profit at 1.1779 and 1.1806 (EMA 200), a stop loss below 1.1650.
