With the post Brexit deal still proving to be elusive as well as Europe experiencing their second wave of coronavirus, the euro has been experiencing a lot of downward pressure when compared to the Kiwi dollar.
Looking on the daily time frame, we can see how using the double bodies on this time frame helps identify key reversal points in the market where price has been melting off. Previous support has now been offering resistance as you can see by looking at the downward pointing arrows.
Dropping down to the 4-hour time frame, we can see that price has been trending to the downside. Looking at the fib tool, we can see that there was a reversal off the 61.8 with price currently sitting on previous support. If price closes below previous support, expect price to pull back and potentially retest the ascending trend line. The next downward target is 1.71000.
Looking at the 1-hour time frame for a potential short opportunity. Once price bottoms out, the fib can be placed as shown and one would have to wait for a retracement into one of our favorable fib levels with the retest of the ascending trend line adding confluence as well as the level 1.72150 shown by the orange horizontal ray which was previously a strong support level.
Later today, the Eurozone will be releasing their monthly as well as annual CPI data with ECB President Lagarde speaking on the current economic climate and the ongoing impact of the coronavirus which will provide more insight into expected performance of the euro. It has been noted that infections in the eurozone has been declining which is a positive but with businesses still operating under strict restrictions, a recovery is not expected until next year when most lockdowns are lifted.
Using technical along with fundamental analysis adds more confluence to your trading and allows for a better understanding of which way price will move. Subscribe to the blog to receive updates sent directly to your e-mail.