After a strong bearish run, EURUSD broke the major support level. The price, which was pierced, was 1.1580. What are we looking for now, is a golden support level, which has been strong on higher time frames. Market usually tend to move radically from higher time frame levels, as these are the one’s where major players are placing their orders. The price point is at 1.1480. We will be looking for a 200 pips move from this level.

The market has formed a descending trendline, which was tapped by the price action as a resistance trendline. Once the market breaks the trendline, we will observe more bullish pressure.

The 75-78.6% retracement level is in confluence with the support level. The price of the retracement level is 1.1480. If market tests this level, we will see a confluence with the support level. Also, the retracement level is a daily time frame level. Therefore, more pressure is expected at this area.

Both the EMA 50 and 200 are in a bearish form, with a bearish death cross. Although the market has retested the EMA 50 plenty of times, EMA 200 is still awaiting the retest. Once we bounce off from the support, EMA 200 retest could be our profit targets.

Both the oscillators are in a bearish region. RSI at 48 and CCI at -62. With this current scenario on the oscillators, we need to wait for them to be in their over-sold region, or form a bullish divergence. Now, EURUSD has formed a bullish divergence on the daily, on both the oscillators. This gives us an oscillator confirmation to go long.

If market tests the support level as mentioned on the charts, there is a high probability for the EURUSD to change its course into a bullish trend. With that, we will be able to catch around 200 to 250 pips on a longer time span. If market breaks the support, then we will have to get out of the market and wait for another opportunity. Also, this trade plan has 4 factors aligned at the support level. This could be a beautiful trade.

EURUSD setup, not to be missed

Oct 12 2021

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