EUR/USD Daily Update, Thu 01, September 2011
Good morning,
so, market has reached our first target - 1.4360, strong support area.
Today I can't exclude that market could show some respect to it and short-term bouncing. That is what particularly we will be watching today...
On daily time frame pay attention to new monthtly pivot 1.4324. We will need it.
Also daily trend has turned bearish. So our context for intraday trades is bearish now. Also I draw other significant levels on daily time frame - next confluence support 1.4237-1.4270 and last 0.618 Fib support.
On 4 hour chart trend is bearish. MArket has reached 0.618 target and Agreement with our 1.4360 level. Pay attention that 1.0 extension stands right at an area of September pivot. It could give support to market and I can't exclude that market could range for some time between 1.4320-1.4360 area.
Next target is 1.4237-1.4270 area that includes - strong daily Fib support, 1.27 target of Butterfly "sell", 1.618 extension of the same AB-CD pattern and weekly pivot support 2.
Today we should focus on the question - will market show respect to 1.4360 or not.
On hourly chart that we have something like DRPO LAL is forming. We already have first penetration of 3x3. If market will confirm DRPO, then potential retracement could reach 1.44-1.4420 area that will be suitable to enter short. Market should not move above 1.4420 Confluence resistance and weekly pivot if bears are strong.
On 15 min chart you see that this DRPO has a shape of H&S. that's why 1.4350 low is particular important for us. IF market will erase H&S and DRPO (no matter before or after confirmation) this will be a signal, that market is ready to move lower.
So today we should watch for the current consolidation and catch different patterns. If reversal patterns will work - 1.44-1.4420 is a target of retracement. If not - 1.4320 1.0 extension of AB-CD and monthly pivot point.