EURUSD – Shooting star formation confirms correction

Looking to sell a rally

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Technical

Monthly: Trading within a bearish channel formation. Trend line resistance is seen at 1.2515. Levels close to the 38.2% pullback level of 1.2522 (from 1.6038-1.0349) found sellers. There has been little net change for the last three months although the break below 1.1500 realised a sharp recovery.

Weekly: The morning star formation led to further positive price action into the early part of last week, however, the rally was sold into resulting in a shooting star candle being posted. We trade within the Ichimoku Cloud with price action being mixed and volatile. The long-term bias is for a stronger move lower and further downside is now favoured.

Daily: We look for the first 5 wave pattern (Elliott Wave) to have completed and a corrective phase looks likely. The move to the downside should now be mixed and volatile. The pair currently offers horizontal support at 1.1585 and a break of this level should lead to a test of the 61.8% Fibonacci retracement level (1.1466). Selling rallies offers good risk/reward for this weeks outlook.

We look to Sell at 1.1650

Stop: 1.1750

Targets: 1.1508 and 1.1466

UPDATE: The move to the downside is stalling. We now look to close out for a small profit

 

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