Heading to the close and Sunday night Asia. Allow me to address the ranges first and its implications for future days. The current range is 1.0953 – 1.1003. Below 1.0953 targets next range below at 1.0853. But and this is vital. The big giant supports below are found at 1.0923 and 1.0924. Its no accident when supports are seen so close together. The point at 1.0923 actually calculates 3 trimes in the front end of the curve and 1.0924 appears once. Respect both points as they are vital to further EUR/USD downsides. Regarding 1.0853. That’s important and vital to see EUR/USD lower but first comes 1.0869. So below 1.0923 then targets become 1.0869 and 1.0853. If EUR/USD is to travel lower then 1.0869 and 1.0853 must break. But here as well we want to watch for a possible bounce. Topside.
Overbought begins at 1.1043. But it assumes 1.1003 breaks hgiher. Then we begin to look at 3 vital points next week if 1.1003 breaks higher. The first is 1.1033, 1.1043 and 1.1088. The point at 1.1088 is not only way way overbought currently and far out along the curve but to see that level then the 100 day average must break at 1.1045 and Distribution average at 1.1072. The point at 1.1033 is the 1 year German Yield. What the break at 1.1033 means is if that break is seen then the EUR enters a new dimension. EUR would then be driven by yields for the first time in 10 months. It would also assume the policy of negative deposit rates is over. Its not likely particularly when QE is just beginning. So we want to watch 1.1033 – 1.1043 next week as well as 1.0923 below.
Points. Shorts need breaks at 1.0978 then 1.0979. Next above 1.0985, 1.0993, 1.1005, 1.10181.1030, 1.1043. 1.1088.
Thank you friends and readers, dhonno baad, kop kun maak, aitah, me daa si, paldies, duze diakuju
Brian Twomey, Inside the Currency Market, btwomey.com