EURUSD took a bounce up earlier this month, but then again pounced back down. Although the trend on the higher timeframes was established as a bullish trend, but the retracement seemed to be deepen down. Right now, the market is in an uptrend, with HH’s and HL’s. The support level, at 1.1270, is a good position to go for long positions.

On the daily and weekly time frame, the golden retracement level of 75-78.6% completely overlaps the support level. This indication on a higher time frame is a strong one that the market has the potential to shoot up.

We see a bullish correction pattern on EURUSD, as bullish pennant trendlines have been formed above and below the price action. If we break the upper trendline, with prices validating the opening and closing of the price action that will be an added confirmation factor.

Both the EMA’s have been in a bearish momentum, with a freshly formed bearish death cross. Given the fact of higher time frames having a bullish structure and trend, the EMA’s will be retested and later, broken.

CCI and RSI both are in a bearish, over sold region. In this region, both the oscillators have formed a bullish divergence. The impact seems to be taken by the markets. With the bullish pressure of the divergence, we tend to see the resistance trendline being broken for breakout buys.

We have a beautiful setup on EURUSD with all technical factors in confluence with each other. Given that the setup is based on higher time frames, we can easily get 100-200 pips with the risk of 50 pips.

EURUSD wicked 1.1270 for a bullish signal

Jan 25 2022