The EUR/USD pair fell from the top of 1.1920 to the bottom of 1.1762 but it bounced from this bottom to reach 1.1815.
The EUR/USD pair set above strong support at the level of 1.1762, which coincides with the 50% Fibonacci retracement level. This support has been rejected for four times confirming uptrend veracity. Hence, major support is seen at the level of 1.1762 because the trend is still showing strength above it.
Accordingly, the pair is still in the uptrend from the area of 1.1762 and 1.1800. The EUR/USD pair is trading in a bullish trend from the last support line of 1.1762 towards the first resistance level at 1.1850 in order to test it.
This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 1.1800 and further to the level of 1.1850.
The level of 1.1920 will act as second resistance and the double top is already set at the point of 1.1920.
Hence, the EUR/USD pair is continuing to trade in a bullish trend from the new support levels of 1.1800 or/and 1.1762; to form a bullish channel. According to the previous events, we expect the pair to move between 1.1762 and 1.1920. Also, it should be noted major resistance is seen at 1.1920, while immediate resistance is found at 1.1800. Then, we may anticipate potential testing of 1.1920 to take place soon.
On the downside outlook :
The EUR/USD pair will probably trading around the area of 1.1920. Today, the level of 1.1920 represents a weekly double top in the H1 time frame.
Therefore, the pair will form a major resistance at 1.1900 and the strong resistance is seen at the level of 1.1920. So, major resistance is seen at 1.1920, while support has already found at 1.1762.
If the pair closes below the double top of 1.1900 in next four hours, the EUR/USD pair may resume it movement to 1.1762 to test the weekly support 1.
From this point, we expect the EUR/USD pair to move between the levels of 1.1920 and 1.1762.
As a result, sell below the level of 1.1920 with targets at 1.1762 and 1.1603 in order to form a double bottom. Nevertheless, stop loss should always be taken into account, accordingly, it will be of beneficial to set the stop loss above the last bullish wave at the level of 1.2003.
The material has been provided by InstaForex Company – www.instaforex.com
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