- March 8, 2022
- Posted by: Tradingshot Articles
- Category: Forex
The EURUSD pair has been trading within a Channel Down since 2021. Yesterday the price came to the closest to the bottom (Lower Lows trend-line) of the Channel Down it has been since the March 31 2021 Lower Low and the 1D RSI the lowest since February 18 2020!
Those are indications that the pair is approaching at least its medium-term bottom (if not long-term) ahead of a key 7 day volatility period that starts this Thursday (March 10) with the ECB making their Rate Decision and next Wednesday (March 16) when the Fed will announce theirs. Obviously this selling has been accelerated by the latest geopolitical dynamics (Ukraine – Russia war) but nonetheless, the long-term patter remains intact.
If a bottom is made here, our target will be first the 1D MA50 (blue trend-line) around 1.1200 and if a 1D candle closes above it, then extension to the top (Lower Highs trend-line) of the Channel Down. Another way to book long profits is to look at the long-term 1D RSI Resistance (just over 61.500) and take profit once the RSI hits it.
After that, if the Channel Down holds and rejects the price again, our sell targets will be first the 1.06400 COVID low of March 2020 and then the 2.5 Fibonacci extension at 1.04190.
Note that only a break above the 1.14850 and the 1D MA200 (orange trend-line) reverses the trend from long-term bearish to bullish.