- July 8, 2022
- Posted by: Tradingshot Articles
- Category: Forex
The EURUSD pair is on the 6th straight red 1D candle as it is headed towards the 1.000 level (parity) for the first time since December 2002! This may have come as a big surprise to many market participants but it was a realistic scenario based on the pair’s multi-year Cycles that I pointed out last March during the first weeks of the Russian invasion in Ukraine:
Back to today and the 1D time-frame. As you see the technical pattern since the February has been a Channel Down with the 1D MA50 (blue trend-line) acting as a Resistance. There are clear RSI Support and Resistance levels involved that accurately project the potential Lower Highs and Lower Lows on the Channel. At the moment the 1D RSI is approaching this 4 month Support Zone and as the price is nearing the Lower Lows (bottom) trend-line of the Channel Down, we should be preparing for a buy.
However being so close to the psychological 1.000 (parity) level and with the usual high volatility that follows the Nonfarm Payrolls (NFP) reports, we can see some wild swings outside the pattern. Be ready to absorb this and at least on the short-term target the 0.5 Fibonacci retracement level (1.0390), where both previous Lower Highs have been formed.