Since August was a choppy month altogether, we had to take some losses on EURUSD. Although the bearish pressure does not seem to have exhaust yet, we will take a counter trend long position on the pair, on H4 time frame.

- Market structure: The current structure on EURUSD is still bearish, forming LL’s and LH’s. Market tapped the support level, which is also a daily and weekly level, at the price of 1.1670. After the first tap, it made another retest at the support, therefore forming a double bottom. Double bottoms if triggered as per the pattern, they usually indicate a trend reversal. But till market has broken the resistance/supply zone at 1.1730, we cannot be confident for a trend reversal towards the bullish side. We want to see market form another HH and HL in order to be confident for bullish bias.

- Trendline: There is a bullish flag pattern formed on EURUSD. The descending trendline has been breached with a full bullish candle, inducing bullish pressure. We will wait for candle validation of opening and closing above the trendline and, will wait for the retracement.

- Retracement: The golden retracement area of 75-78.6% stands at the 1.1730 level. This retracement level, confluences with the support level, hence conforming to another added factor for our long confirmation. At this level, we will take a long position.

- EMA's: Both EMA’s are bearish in this current EURUSD picture. We anticipate EURUSD retesting the EMA 50 at the resistance. This resistance is also our profit target. Therefore, another factor to add for our profit target. If EMA 50 is broken, we have EMA 200 as the next resistance point.

- RSI/CCI: Both the oscillators formed bullish divergences in their over-sold regions. The impact has already been factored in EURUSD as it started to move up. Right now, RSI is at 48, just 2 points below the neutralization level. Once it starts moving up the 50 level, we will have oscillators on our added factor for buys. Secondly, the CCI is already bullish at 98. This leaves bullish room till 150.

Another long setup on EURUSD

Aug 22 2021

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