EUR/USD Price Analysis: All of April and May’s price action held within the lower half of April’s range
EUR/USD Price Analysis: April closed the month little net changed with a ranging candle of 860 pips/points. All of April and May’s price action held within the lower half of April’s range.
Market highlights from the last week
Monday 25 May: Bank Holiday UK and USA. According to the CFTC data, there was a small decline in overall Euro long positions, although there is still a significant position which will limit the scope for Euro gains
Tuesday 26 May: Ahead of Tuesday’s New York open, there were reports that the ECB has drafted contingency plans to continue its bond-buying programme without the Bundesbank if necessary
Wednesday 27 May: On Wednesday, ECB President Lagarde stated that the mild ECB scenario is outdated with the economic contraction seen as somewhere between medium and severe
Thursday 28 May: Euro-zone industrial sentiment recovered slightly to -27.5 for May from -32.5 previously
Friday 29 May: The headline Euro-zone CPI inflation rate declined to 0.1% for May from 0.3% previously which was in line with consensus expectations
EUR/USD Price Analysis
Let us have a look at the technical viewpoint:
Monthly: April closed the month little net changed with a ranging candle of 860 pips/points. All of April and May’s price action held within the lower half of April’s range.
Weekly: Posted two weeks of net gains. Previous resistance is located at 1.1148 (week 23 March peak)
Daily: Broken out of a symmetrical triangle formation to the upside. Reverse trend line support is located at 1.0983
Intraday 4-hour: Posted an Evening Doji star on the 4-hour chart. This candle formation often indicates the top of the trend and the start of a new downward bias.
Outlook: There is scope for mild buying, but gains should be limited. We look for a corrective move lower toward the reverse trend line support
Possible trade setup:
Action: Selling at 1.1140
Potential return on risk to first target: R4.6 (reward 140 / risk 30)
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