Because of engulfing candle in the middle of the downtrend channel the setup from last week did not last for too long.
The whole week was bearish and only Friday was a small bullish candle. Bears have overtaken the market and for the last three weeks they are dominating.
After breaking below last week’s low the price formed a strong bearish candle which reached $1.16000 level. And then the price did not not stop right away, but it continued moving down to $1.15600. The price found support on the downtrend channel support line where the day close did not move below.
The price pulled back and the week ended on $1.15926 level which is close to previous support which now acts as a resistance.
EURUSD Chart Forecast
With $1.17200 and $1.16187 broken which were two strong support levels I want to see what the price will do next week.
Because the current break below $1.16187 could be a false break and the price can return above and make a reversal back to $1.17200.
If the bears are stronger I would like to see the price reach $1.17200 and then return back down. That move would make the market much more bearish than it is currently.
The price is on the downtrend channel support line and now is below $1.16187. Current price level hardly tells me that the bulls will take over for the long term. This is because the price could not return above $1.16187 at the end of the week.
But we had a small bullish candle which could not close above the previous day’s open.
I am currently outside of the market until I see a better market constellation. I am waiting for the price to reach $1.17200 for a bearish move with a price action signal or $1.14748 for bullish move.
$1.14748 is the next support level where the price will find support and buyers waiting to buy and sellers to get out from trades.
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