Eur/usd - page 449
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EUR/USD forecast for the week of June 20, 2016
The EUR/USD pair initially fell during the course of the week but turned right back around to form a bit of a hammer. The hammer of course is a very bullish sign and if we can break above the top of a, we could very well go to the 1.15 level again. However, I think it’s can be much easier to trade this chart from the shorter-term time frames than anything else. With that being the case, I’m not interested in taking longer-term trades at the moment in this pair.
The single currency recorded a slight decrease against the US dollar on Thursday. The session started at 1.1258 and ended 34 pips lower. On downwards first support is located at 1.1100. Resistance is located at 1.1286.
EU Market Insight: Iceland and Switzerland Paving Way for Brexit
Almost lost in the UK's pre-referendum fever is an interesting piece from Switzerland: the upper house of the Swiss parliament chose on Wednesday to back the earlier March vote by the lower house and invalidate the 1992 Swiss bid to join the European Union. Switzerland, therefore, exited the EU before it could join it, just a week before Britons go vote.
Iceland also dropped its membership application last year.
Only "a few lunatics" may want to join the EU now, Thomas Minder, counselor for the state of Schaffhausen, told the Neue Zürcher Zeitung.
"Iceland had the courage and withdrew the application for membership, so no volcano erupted," another representative of Schaffhausen, Hannes Germann, added jokingly.
Weekly Chart Shows EUR/USD Set-Up For Volatile Move
The Euro consolidated against the US Dollar most of the week as it straddled the key retracement zone that is controlling the direction of the market. The EUR/USD finished the week at 1.1271, up 0.0021 or +0.19%. The Forex pair basically treaded water as investors await the referendum on June 23 that will determine whether the UK remains a member of the European Union. The dovish Fed monetary policy statement also helped underpin the market as well as more stable Bund rates towards the end of the week.
Technically, the main trend is down according to the weekly swing chart. A trade through 1.1415 will turn the minor trend to up, while a move through 1.1097 will signal a resumption of the downtrend.
The main range was formed by the top at 1.1712 from the week-ending August 28, 2015 and the bottom at 1.0539 from the week-ending December 4, 2015. The EUR/USD has straddled its retracement zone at 1.1125 to 1.1264 for five weeks. Sellers have been trying to drive the market through this zone in an effort to make 1.1415 a new main top. Buyers have been trying to drive the market higher in an effort to make 1.1097 a new main bottom.
Based on the recent price action, trader reaction to this zone will likely determine the longer-term direction of the EUR/USD.
The EUR/USD is also trading inside a long-term triangle chart pattern defined by 1.1119 on the downside and 1.1282 on the upside this week. Both angles should be considered trigger points for breakouts. Keep in mind that breakouts work best when there is above average volatility and above average volume. Remember this when buying strength and selling weakness.
Based on the close at 1.1271, the earlier direction for the week will be determined by trader reaction to the Fibonacci level at 1.1264.
A sustained move over 1.1264 will indicate the presence of buyers. This should lead to a quick test of the downtrending angle at 1.1282. This angle helped produce last week’s high. Taking out the angle could generate enough upside momentum to challenge the minor top at 1.1415 if there is enough buying volume behind the move.
Taking out 1.1415 will indicate the buying is getting stronger with 1.1497 the next likely target. This is the last major downtrending angle before the 1.1616 main top.
A sustained move under 1.1264 will signal the presence of sellers. The daily chart indicates there is room under this Fib level with the 50% level at 1.1125 the next target. This is followed closely by an uptrending angle at 1.1119 and a main bottom at 1.1097.
Taking out 1.1097 will signal a resumption of the downtrend and likely trigger an acceleration to the downside since the next major targets don’t come in until 1.0829 and 1.0821.Watch the price action and read the order flow at 1.1264 this week. Trader reaction to this Fibonacci level should determine the direction for the week.
source
Resistance: 1.1286; 1.1450; 1.1630.