EUR/USD fractal outlook

[Paul Koszarny]

EUR/USD fractal outlook

In the final episode of last week EUR/USD failed at 1.0668 to recover more and further selling pressure emerged amid frenzy buying on major stock exchanges. However, I would like to point to the fact that the beginning of the war has been largely and falsely taken for an ending and uncertainties cannot be declared perished yet. EUR/USD almost touched Friday support 1.0496 and despite positive divergences closed relatively low near 1.0525 with no signs of profit taking. These oversold conditions should keep us alert as on Monday we are entering the first model day with support 1.0516. It is possible that EUR/USD will be bought on dips below 1.0516 towards next support 1.0431, though a bounce off the present low would not be much of a surprise. Major resistance comes now at 1.0651 and for the time being this level is seen as the target of a possible correcting movement. The model suggests a week long trend and further losses towards 1.0258 maximum. Ideally a full week of declines, whether from a healthy retracement on Monday, or without it, should be the end of the first decline from 1.1083. I will be looking forward to buying opportunities early Monday.

[Paul Koszarny]

EUR/USD did not give good buying levels early Monday, as the new week opened with a bullish gap, however I was closing Friday long opened at 1.0545 and now I will look for a selling opportunity on approach to 1.0651. The nearest model hour is 12:00CET with an apparent high amid very overbought conditions. There should be some potential to retrace to 1.0591, a short term attractor. The first stage of the model trend is almost over.

[Paul Koszarny]

EUR/USD finally tested 1.0651 and reversed on the first model hour, though a little more than 30 pips profit were possible so far. Major bourses down and the dollar is down. At least a stop could be lowered so this short position may not end with a loss.

[Paul Koszarny]

I was stopped on my shorts and today EUR/USD is already 70 pips higher. At the moment it's struggling with Fibonacci retracement line, and also model resistance at 1.0725. There is some potential to gain another 50 pips from the first resistance but the question is how much momentum is still there in the current overbought conditions. The nearest model hour is 14:00CET with support 1.0691, resistance 1.0733. German names seen waiting for another dip towards 1.0660 where good buying will be activated. The market is taking it easy now, so I suppose it is better to wait for a few hours for a pullback.

[robertfo]

Paul,

I am curious of your precise source when you mention "German Names". Please elaborate on this source to had credibility to this post. TIA

[Paul Koszarny]

Robertfo,

I meant some German banks. You can rarely judge credibility no matter who tells you what. Real judgement is from one's positions whether it's a profit or a loss, not from a whisper. I would not like to discuss someone else's positions, particularly when they are for a different time horizon than mine. I just mentioned that because their (German) view was being quickly bought here. Just to end the topic, today's low was very close to their stops. Sorry I couldn't reply yesterday due to some constraints.

[Paul Koszarny]

EUR/USD failed to cross 1.0725 yesterday and disappointed all those who had opened longs above 1.0660. I suggested waiting for better levels to buy during the day. EUR/USD dipped to 1.0660 early New York. When the market realized Wall Street indices were having healthy gains, euro buying pressure fizzled and we returned to the area 1.0651 which does not bode well for the pair. At best we will probably have some short consolidation before resumption of down trend. The first warning signal is today's dip towards stops of some longs. EUR/USD touched 1.0625 this morning on the first model hour and is showing little upside pressure. Wednesday's resistance comes at 1.0668 and I favour shorts from there. Until then I am on standby.

[Paul Koszarny]

EUR/USD shot up to 1.0700 breaking today's resistance 1.0668. This hour is a model one and given another fact that the market overshot the upper Bollinger band so much it would be surprising not to see the pair sliding gradually lower. Anyway, I have two short positions now 2:1, and my stop can be lowered now to secure a small profit.