EURUSD has been ranging in a downward wedge since a month. The fundamental analysis depicts the prediction of EURUSD reaching 1.25 by year-end. Given the situation, we are still 800 pips below the targeted price of future expiration prices.

For this, we will analyze EURUSD on a daily chart.

- Market structure: EURUSD stands at a major support level at 1.1750. Although the trend on lower time frames had been bearish, higher time frames are still bullish. Right now, EURUSD is shrinking to accumulate liquidity for its bullish move up. We have a resistance at 1.1930, which will act as a catalyst for future direction. This area will be our potential profit target.

- Trendline: EURUSD is currently in a descending wedge pattern. The wedge is shrinking the prices. We will wait for the support descending trenline to be tapped at the support to go long. The resistance descending trendline is still few pips away from a breakout.

- Retracement: Currently, the support is in confluence with the 75-78.6% retracement levels. The daily time frame is a strong confirmation when support and retracement levels confluence.

- EMA's: Both EMA’S are above the current market prices reflecting a bearish bias. The EMA’s have not induced a death cross yet. That being said, the break from the EMA 50 has not been tested yet. We anticipate the retest of the EMA 50 on the higher side, which also is our potential profit target.

- RSI/CCI: Both oscillators are in an over-sold region. An added confirmation we would get on RSI is the bullish divergence once the price test the descending trendline at the support. Other than this, CCI is also forming a bullish divergence and regaining its control out of the over-sold region. When both oscillators have a divergence at a level, the confirmation is strong that it may bounce back up.

We have 4 confirmations on this trade plan of EURUSD: resistance, retracement, trendline test and oscillator divergences. When such a setup appears, the authenticity is increased to 75-80%.

If this support is breached, we will invalidate the trade plan and plan further ahead.

EURUSD priming to surge

Jul 20 2021

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