Forex FOREX PRO WEEKLY, January 04 - 08, 2021

[Sive Morten]

Morning everybody,

Despite that US events have brought some volatility on the markets, EUR was able to hold above 1H K-area and hit our first 1.2330 target on intraday chart. It is not too much to talk about on daily time frame - mostly everything stands the same, and while EUR stays inside the channel and keeps upward tendency - it keeps bullish context as well. Because, as we've mentioned, upward action and erasing of bearish signs tells above aiming on upward direction:

On intraday charts, before upward continuation, EUR still could show a bit deeper retracement. ON 4H chart our butterfly has been completed, and as EUR has failed to proceed higher after 1st downside swing - it means that it is forming two leg downside retracement in a shape of AB-CD pattern. The depth of the pullback might be different. Still, invalidation point here stands the same and this is 1.22 lows:

On 1H chart we keep an eye on 1.2265 K-area and Agreement first. Next support is Agreement around 1.2213, and this is actually the last outpost around invalidation point. Downside breakout means crush of short-term bullish context and EUR forms the bearish reversal swing in this case:

 

[Sive Morten]

Morning everybody,

So, 1st week of a new year is coming to an end and today we're watching for NFP that are promised to be weak (around 50K), at least as multiple polls suggest. Overall price action stands tight in upward channel on daily chart. The only new thing that we've got here - bearish grabbers on top. This is the weaker type of the pattern and I almost never trade them as they fails too often. Still, they are not friends of bullish context and we have to take them in consideration.

On practice it means that we need more confirmation for long entry now.

On 4H chart market hits predefined support area around 1.2265, but sell-off was rather strong and EUR keeps chances of another drop to next support area. In general, action below 1.22 means crush of short-term bullish context here, because price forms bearish reversal swing. In this case we will have to watch for deeper support areas on daily chart - 1.2115 and 1.20:

So OP target around K-support has been hit and price is coiling around. As we said above - we need more confirmation. It means that we can't take positions blindly now, just because price at strong support. Here we have to drop time frame to 15 min chart and watch for bullish patterns. Most probable are reverse H&S and 3-Drive Buy (watch the video for details). If nothing will be formed - just do not take the position. Another advantage - is tighter stop placement, based on 15 min chart, so potential loss will be significantly smaller.

If no patterns will be formed - we keep an eye on next 1.2213 Agreement support with XOP target. There we will do the same - watch for the patterns on lower time frame.