Forex FOREX PRO WEEKLY, May 06 - 10, 2024

[Sive Morten]

Morning guys,

So, EUR performance is slow by far - everything still stands in the Friday's range. Daily trend remains bullish. 1.08-1.0835 seems good resistance zone for long-term bearish entry, as we've discussed it last week and it was touched on NFP report. But, now we're concerned with the possible 2nd chance as not everybody was in time to catch it.

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Yesterday we've said that bearish context is not ready yet and it seems some chances exist for another upside swing and re-testing of 1.0830 area. On 4H chart EUR is moving lower gradually, but this is not even 3/8 retracement. And today it makes sense to see what will happen around 1st K-support of 1.0725-1.0730. Because pullback from OP target is a common thing and doesn't mean yet the bearish reversal.
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Despite ~40 pips upside bounce and re-testing of 1.0780 FIb level - EUR was not able to form the butterfly on 1H chart. Triangle has been broken down. Now we have two downside targets and OP stands at 1.0730 making Agreement with 4H K-support.
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That's being said, for short entry on weekly/daily time frame I would wait a bit. For intraday trading - it makes sense to keep an eye on 1.0730 area and watch for bullish patterns there. If we get something - then we could try to take short-term long position.

 

[Sive Morten]

Morning everybody,

So, markets are very slow this week. We do not have any big events or data releases. Additionally it is a celebration of WWII victory in EU as well. Still, EUR finally comes to our K-support area, as we've discussed it yesterday:

We've agreed to watch for patterns around it, and we already have some - butterfly "Buy":

So, if you want to catch the low, you could consider entry at butterfly's targets with stops under 4H K-area. This is more risky way as EUR, say, could just keep dropping...

Our preferable method is to wait, when bounce will start and reverse H&S will be formed. Entry price probably will be a bit worse but we totally exclude downside breakout risk and definitely will know where to place the stop.

 

[Sive Morten]

Thanks for all your dedicated updates, Sive
As the swings on GBP/USD can sometimes be bigger, I have been trading the GBP/USD alongside the EUR/USD, and wonder if you could mention on occasion the similarity in the set-ups, if appropriate.

Hi Viresh, It Ok, let's take a look tomorrow. In general, expectations on Cable are more bearish, because it is widely expected more dovish BoE policy. It is 1.20 area now stands in focus as a mid term target.

 

[Sive Morten]

Welcome back,

So as we've agreed above - let's take a look at the Cable. For more extended view - just watch the video, here we talk about daily and lower time frames. Now many things depend on two levels actually. First is daily 1.23 lows that are vital for long-term perspective. Whether we will go to 1.34-1.38 depends on these lows, yes. And second is from 1.26 local top, which is also the resistance level.

On daily chart market is challenging 1.256 area that splits trading zone in two parts. Depending on breakout we could get either upward continuation to 1.29 or downside reversal and re-testing of 1.23.

Formally, we have bullish trend direction on daily chart. But because of intraday picture I would wait with any long positions by far. On 4H chart we have uncompleted XOP target and clear shape of H&S pattern. So, I would watch for 1.2570 level as the signal one. If H&S starts failing - this might be the different tune and long entry will become possible. But until H&S is forming and valid - it would be better to not go against it:

Bears in turn, could watch for the same 1.2570 area for selling and then keep watching on performance of the H&S:

H&S is the first point in the sequence of potential trading decisions. Once it will be done whatever results will be, we will make next steps.