EURUSD – Double Bottom Forming on Key Support

Minggu, 10 Juli 2016

The euro has performed very well since the beginning of the year, greatly benefiting from market aversion to risk triggered an unwinding of the carry trade that we often see in a "risk on" environment.

the single currency has performed very well against the US dollar, rallying as high as 1.1375 last week before falling back below 1.11 as risk appetite crept back into markets.

EURUSD Daily

the pair was always likely to find some support between 1.1050 and 1.11, with it having been a key area on a number of occasions during the last year as well, and early signs suggest it did just that. Moreover, the simple moving averages 21 and 0 days combine around 1.1060 to provide additional support.

The pair traded in this region, Thursday and Friday of this week, and each time was met with strong buying pressure. The result is the formation of a kind of tweezer bottom on the daily chart, but with slightly different downs.

If we take a shot closer eye on this 4 hours or 1 hour charts, we can see whether a possible double bottom with neckline around 1.1140 and down to 1.1065 .

EURUSD 1hr

Should we see a break through the neckline, it could cause a move towards 1.1215, based on the size of the double bottom projected above the neck. This represents about a 50% retracement of the move from the highs of last week to the lowest this week and would be an interesting test for the pair.

A move above here would indicate that we will see a return to the 1.1375 high, or above, with 1.1450 to 1.15 as the above key here.

For further analysis of the EURUSD, see FX Charting video analysis Monday.

As you can see below, the OANDA clients are increasingly bullish on this pair and there are a large number of pending orders between 1.1050 and 1.11, which just goes to show how the key of an area it is.

Position Ratio Open Orders To access these tools and others, visit OANDA Forex Labs.