Earlier, EURUSD took a toll due to strong fundamental news of the USD. First we had FOMC and then NFP followed draining the EURUSD downwards. Markets never move in a slanting direction. They have to move in waves. For EURUSD, we will analyze H4 for intra-day or swing setup.

- Market structure: EURUSD market structure is bearish on H4 and Daily. On the weekly and monthly time frame, we stand at a solid support. Until this support is broken, selling EURUSD is risky. In fact, buying at this strong support region has a higher probability to give us a positive trade setup. The support stands at the region of 1.1685-1.1715.

- Trendline: The descending trendline has been broken just now with the force of a bullish candle. This trendline will be validated as breakout buys after the candles have opened and closed above. After the validation, we will wait for the market to come to the minor retracement levels to go for a long position. Also, EURUSD has a support descending trendline, which has acted as a price action support for divergence.

- Retracement: At the support level, we have a retracement level of 61.8%, which is a major retracement level. Since the trendline has pending validation on the breakout buys, once its validated, we will wait for the market to test the minor retracement level of 75-78%. These levels will also confluence with the major support level at 1.1715.

- EMA's: Both the EMA’s are above the current market price, which means they are indicating a bearish bias. The EMA’s have been broken and retested. EMA 50 has only been retested once after being broken out, hence this 2nd retest will be considered as a profit taking area. This EMA 50 retest might happen at the resistance of 1.1785.

- RSI/CCI: RSI and CCI reversed from their over-sold regions. They continued to hover around the over-sold area till the CCI trendline support formed a divergence in line with the candles. The impact of the divergence can be seen on the charts as CCI jumped to 150 level from

At this major support, we have a confirmation of a retracement level, which will trigger our long positions. The stops will be 20-30 pips against the reward of 60-100 pips.

EURUSD buys from 1.1715

Aug 11 2021

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