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EUR/USD Forex Technical Analysis – Testing Lower Level of Major Weekly Retracement Zone at 1.1185

By:
James Hyerczyk
Published: Mar 31, 2019, 23:39 UTC

Based on last week’s close at 1.1218, the direction of the EUR/USD this week is likely to be determined by trader reaction to the main Fibonacci level at 1.1185.

EUR/USD

The Euro closed sharply lower against the U.S. Dollar last week, finishing up its worst month since October. The single-currency was weighed down by fears about economic growth amid a series of cautious signals from the European Central Bank. Earlier in the month, European Central Bank policymakers cut growth forecasts for the Euro Zone economy while announcing a new round of cheap loans to its banks.

Last week, the EUR/USD settled at 1.1218, down $0.0083 or -0.74%.

EURUSD
Weekly EUR/USD

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart, however, momentum is trending lower. The main trend turned up in early March when buyers took out the previous main top at 1.1420. However, the rally stalled at 1.1448 and the selling pressure ensued.

A trade through 1.1176 will change the main trend to down and signal a resumption of the downtrend. This could lead to the start of a steep sell-off since the nearest minor bottoms come in at 1.1118 and 1.1109, and the nearest main bottom is $1.0569.

The main range is 1.0339 to 1.2555. Its 50% to 61.8% retracement zone is 1.1447 to 1.1185. This zone played a major role in the price action in March. First, it was tested early when sellers drove the Euro into 1.1176. Then it was tested at mid-month when buyers drove the Euro into 1.1448. This price action proves that this zone is controlling the longer-term direction of the EUR/USD.

Weekly Swing Chart Technical Forecast

Based on last week’s close at 1.1218, the direction of the EUR/USD this week is likely to be determined by trader reaction to the main Fibonacci level at 1.1185.

Bullish Scenario

A sustained move over 1.1185 will indicate the presence of buyers. If this move can create enough upside momentum then look for a rally into the pivot at 1.1312. Overtaking this level could create the momentum needed to eventually challenge 1.1447 to 1.1448.

Bearish Scenario

Taking out 1.1185 will signal the presence of sellers, but a break through 1.1176 is likely to trigger an acceleration to the downside with near-term targets coming in at 1.1118 and 1.1109. This are just minor targets, the nearest major target is 1.0569, the last main bottom from the week-ending April 14, 2017.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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