Europe is turning to mass testing to contain the pandemic that has forced nations into lockdowns which cannot be sustained. Over the course of the past weekend, Slovakia attempted to test its entire adult population and the surrounding nations are looking to follow suit.
On the 4-hour time frame, with the same fib placed as in the previous blog we can see that price has hit the first profit taking region at 1.74500 while continuing to create lower highs and lower lows. The next downward target to look out for would be 1.73700.
Dropping down to the 1-hour time frame, with the fib placed from the high of the latest bearish move, we can see that price has wicked into the 61.8 as well as coming a few pips short of the major key level of 1.76000. Candle closures below this level would signal a possible short position but a more conservative approach would be to wait for bearish candlestick confirmation. Looking at the highlighted region illustrated, we can see that this zone has been acting as a pivotal support and resistance area and candle closures below this level would offer more confluence for the downside move. The previous candle closed very bullish therefore if price does break above this zone, we can look for reversals around the 78.6 region. Looking at the first take profit region on the fib, we can see that it lines up almost perfectly with our second downward target.
There is PMI data coming out later today for the euro. It is expected that both PMI data points will be released below 50 which indicates contraction in the services and manufacturing sector. This would favor a downside move on this pair. A release above 50 would indicate growth in these sectors which would be a positive for the euro but with coronavirus the main downward risk at the moment, it would offer very little relief for the euro at the moment.
Remember to always use multiple time frames to get a better perspective of where price could potentially move to next. Using higher time frame analysis allows for more accurate stop loss and take profit placement. Subscribe to our blog to receive e-mail updates sent directly to you.