BULLISH & BEARISH ENTRIES / TARGET DESTINATIONS :

The EUR/USD pair trades around the 1.1440 level, holding on to most of its weekly gains. The pair has neared the 61.8% retracement of its 1.1691/1.1185 decline at around 1.1495 before giving up some ground, currently hovering around the 50% retracement of the aforementioned decline.

The weekly chart shows that the latest recovery from the 2021 low was a long-overdue correction, as the pair has been in a bearish movement pretty much since late in May when it topped at 1.2266. The same chart shows that the 20-SMA heads firmly lower and that it is crossing below the 200-SMA, both around the 1.1500 figure. Technical indicators, in the meantime, maintain their bullish slopes, although within negative levels, falling short from hinting at a sustained long-term advance.

The daily chart supports the longer-term view, at least as long as the pair remains below the 1.1500 area. The 100-SMA stands around the aforementioned Fibonacci resistance level, reinforcing the strength of the 1.1500 price zone. Technical indicators have lost their bullish strength after nearing overbought conditions. More interestingly, the last two daily candles show long upward wicks, hinting at buying exhaustion.

Should the pair take out the 1.1500 resistance area, the bullish case will become more evident. The next resistance price zone and probable bullish target will come in at 1.1570/80, while once above the latter, a full retracement towards 1.1691 seems likely.

The bullish potential should lose steam on a break below 1.1385, the 38.2% retracement of the aforementioned slide, with scope then to retreat towards the 1.1250 level, en route to 1.1185.

EURUSD Will Complete Bearish Correction on 4Hour

Jan 15 2022