Last Friday, markets had to absorb the market news of NFP. The figures were better than expected which resulted in a deliberate plunge in the USD, hence taking EURUSD higher. After the news, the market normalized its course by building momentum for the continuation of the bullish momentum.

Market broke the solid resistance level at 1.1420 and is retesting the now turned support. This support holds major importance as it has a swing point reference towards the history. EURUSD has been forming higher highs and higher lows. Another higher low can be formed at the support level and continue moving up.

Earlier, the descending trendline has been broken out for buys and validated by price action. After the break out, we usually wait for a retracement or a smaller timeframe trendline breakout. On h1, there may be a descending trendline forming, which if broken would escalate the bullish pressure. On the other hand, we have an ascending trendline which still is due for a retest. We cannot surely say if the market will reach to retest the trendline.

There is no Fibonacci retracement indication at the current scenario.

Both the EMA’s are bullish with a bullish death cross. Market broke out the EMA 50 and EMA 200 and is due a retest of either of the EMA’s. At the support level, we analyze the retest of the EMA 200. This will again add as a solid confirmation on our position. But the fact remains, the EMA’s are still down below and we are analyzing to take a long at the current market structure.

Both the oscillators are in a bullish region. The oscillators are heading towards their neutralized levels. RSI is at 63 and CCI is at -31. What this means is that CCI is already near its neutralized levels at the current support level, whereas, RSI still has room to move down towards the neutralized levels. We have one oscillator confirmation for buys at the current level.

If EURUSD breaks the current support, we will liquidate our positions and look for another buy at the lower support.

Simple breakout and retest on EURUSD

Feb 07 2022

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