EUR/USD price analysis: support located at 1.1672
EUR/USD price analysis: with the price being bought from 1.1672 support, we look for a temporary correction higher
Market highlights from the past week
Wednesday September 16: The Federal Reserve reiterated its commitment to getting inflation above 2 per cent to raise the average and forecast no increase in the Fed Funds rate until at least the end of 2023
Thursday September 17: the US dollar was unable to hold gains into the US open amid underlying negative sentiment. Following the Federal Reserve policy statement, there were strong expectations that interest rates would remain at extremely low levels for an extended period
Friday September 18: the US dollar regained some ground late in the day amid a fragile risk tone, although overall progress was limited with EUR/USD around 1.1830
Monday September 21: ECB president Christine Lagarde stated that the recovery remains very uncertain, uneven and incomplete. In this context, the uncertain environment required very careful assessment, including developments in the exchange rate
Tuesday September 22: eurozone consumer confidence recovered slightly to -13.9 for September from -14.7 previously and slightly above consensus forecasts.
EUR/USD price analysis
Let’s have a look at the technical viewpoint.
Monthly: trades to the higher level in 26 months. We have the trend of lower highs located at 1.2018
Weekly: an AB=CD corrective formation has been completed at 1.1945
Daily: we have a 261.8 per cent extension level located at 1.1968 (from 1.6036-1.1148). From an Elliot Wave perspective, this could be the completion of a fifth wave (five waves up, three waves down). Support is seen at 1.1672
Intraday four-hour: broken out of the head-and-shoulders formation to the downside. This has a measured move target of 1.1483. The reverse trend line resistance is located at 1.1732
Outlook: with price being bought from 1.1672 support, we look for a temporary correction higher.
Possible trade set-up (today only)
Action: buying at 1.1672 (support)
Target: 1.1732 (trend line resistance)
Potential return on risk to first target: R3 (reward 60/risk 20)
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