This article analyzes the EURUSD from the perspective of Monthly Pivot Points, Weekly Pivot Points and 4 Hour Fibonacci Analysis. A couple different trade plans then are considered for the upcoming trading week.
BELOW IS A 4 HOUR FIBONACCI STUDY OF RECENT PRICE ACTION ON THE EURUSD
The 61.8 Fibonacci retracement Level of this Fibonacci study acted as momentary support before price rallied off this 1.13676 level. After this bullish retracement in the prevailing downtrend, price turned once again in a bearish direction and breached mentioned support at the 61.8 retracement. Price then moved down within range of the 78.6 Fibonacci retracement level at 1.13004. There is a historical support and resistance level at 1.12936 which is from price action not show on this chart, but is acting as complimentary support in this 78.6 zone. This description contributes to the trade plan below…
Bullish Trade Scenario to Consider…
If this 78.6 zone holds at and around 1.1300 then there is a likelihood that price will rise to the the 61.8 level mentioned above and retest previously broken support at 1.13676 as new resistance. So, this would be roughly a 65 to 70 pip run up to the 61.8 as broken support is retested as resistance.
Bearish Trade Scenario to Consider…
If the 78.6 zone mentioned above does not hold, then price is going to target 1.1215 at the 100 fibonacci level, in my opinion, which is an 85 pip move to the downside.
Price is still north of Monthly M1 at 1.1207, so there is likelihood of Monthly M1 being reached which would be in range of the Fibonacci 100 retracement level at 1.1215.
Considering the Weekly Pivots
WM1 was hit this last week, which is a sign of bearish exhaustion, and may signal a brief rally up as mentioned above in the bullish trade plan.
Be aware that the monthly pivots are being used by traders; you can see below how price is moving through the monthly pivots.
Two different trade plans are presented here, the first a bullish trade plan and the second a bearish. Allow price action to dictate which plan to follow. If the due diligence is done on the front end to consider the different trading options and two plans are considered on the front end, then simply follow the higher highs and higher lows into the bullish scenario described or read the lower lows and lower highs and then follow the bearish scenario described above. If you have two trade plans and you allow price action to tell you which one to use… you will be surprised at the results you will get.
US Dollar Analyst, FOREX.TODAY