What was discussed in the previous week analysis the market has done almost in a pip. The market broke out to the upside and reached a strong resistance level at $1.14748.
Week started with the retrace back to support at $1.13094 which is a confluence of support. Confluence of support consists of downtrend line support and horizontal support.
From there the price reversed back up and in three days the price reached a pip range of 150 pips. Three strong bullish candles show the bull’s strength.
When the strong resistance level at $1.14748 was reached the price formed a small bearish Pin bar and on Friday bearish engulfing bar.
Two bearish signals on Friday show the market status after traders have cashed out their profits after a nice move to the upside. And while the weekend is ahead of us, a smart move is to be outside of the markets just in case something happens over the weekend that could impact the market.
The price is now close to the confluence of resistance where the downtrend channel line and horizontal resistance line are crossing. We can expect the price to stall a little bit like it has now with a slight retrace.
The retrace back to $1.14000 level which we can see on the chart is a good way for the price to prepare for the next move. The retrace shows us EUR strength has weakened and USD has become slightly stronger. This is also visible on the currency strength meter on the image below.
Image source – CSMapp
From here we can expect the price to find a ground for the next move up above $1.14748. With the breakout outside of the downtrend channel where the price now is the market will change its bias into bullish.
From there the next resistance to break is $1.16187 which is a well known level.
On the down side we have $1.13600 level as a next support below $1.14000 where the price now is.
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