EUR/USD fractal outlook

[Paul Koszarny]

EUR/USD fractal outlook

Last week’s fractal days were Monday and Friday. I had expected the market to show little reaction to Monday’s pivot 1.0812. Of the predicted range 1.0726-1.0865 the upper bound showed beautifully, whereas we had actually a lower low by about 100 pips from the forecasted range. Both Monday as well as Friday are daily highs in the model, so now the model suggests a break lower is possible from the region of recent highs 1.0865/42. The patterns of hourlies do not indicate a major reversal is yet at stake.
In the opening week the first daily resistance 1.0830-1.0801 is quite near major support 1.0776. The support line is gradually moving higher and from within the small triangular formation we should see a breakout in the course of this week with a new local extreme probably on Friday.
I would like to point to an almost half-a-week euro weakness and the last movement above 1.0812 seems to me a very false signal prompted by the operators who did not change the direction after the hourly multiple wave had been completed but instead carried the trade 50 pips higher. Again the movement down triggered many stop losses of those who believed a new rally was beginning. To a bewilderment of many the market gradually eased lower, touching 1.0758 which was 100 pips from the week’s high. My preference is range-bound trading with possibly much lower volatility than in the week behind. We begin with support 1.0776 and resistance 1.0830. The proposed averaging strategy proved useful and profitable. One could open a multiple number of new positions in both directions and exiting was easy and painless. My last position short at 1.0850 was a good topping to quite happy trading.

[Paul Koszarny]

EUR/USD has hit a significant low after a plummet below major support and bearish gap 1.0776. Now the 50% retracement of the fall 1.0865-1.0672 is right below the broken level and with a triple top on dailies this is sth like H&S. I suppose too many longs crashed would not support a quick recovery of the euro. This hour 11:00( CET) is the first model hour with sup 1.0675 and resistance 1.0721. The res level has just been struck so it's important to see some reaction early afternoon. Particularly heavy blow came from GBP/USD which from today's low may recover just to 1.6071 near term.

[Paul Koszarny]

We have not seen attempts to lift EUR/USD higher than the model 1.0721 though EMas suggest we may have a buy signal in the present configuration. Yet I have decided to open my first positions in the following region: first buy at 1.0654, first sell at 1.0742. Therefore it is wait and see right now.

[Paul Koszarny]

Little changes, non-engaging market balancing slightly obove 1.0710. The next model hour is 15:00(CET) with M30 EMas gathering to signal a buy, but will it be? For 15:00 sup 1.0705, res 1.0731.

[Paul Koszarny]

As indicated I opened a short yesterday at 1.0742 which has been closed with 30pips profit. EUR/USD is being traded lower now before German ZEW announcement. The present hour 10:00 is a model hour with sup 1.0710, and res 1.0746.

[Paul Koszarny]

EUR/USD gained in recent hours reaching a congested area just under the bearish gap 1.0770/92. Due to profit taking and overbought conditions we may have a corrective movement before another attempt of breaking higher today. We have closed our longs opened at 1.0694 and if we have a push higher during the European hours without a prior correction towards 1.0735 I am planning to open first short from 1.0796. Otherwise the plan is to go long from a retracement, ideally from 1.0720/35.

GBP/USD may have a big reverse from the recent lows suggesting a sharp reactive wave towards maximum 1.6330 to end on Feb28 is possible. If this materializes EUR/USD should follow posting a new top near term. This week's first resistance on GBP/USD is seen near 1.6073.

[layan]

MR. PAUL

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