The key level on EURUSD for the month is 1.050. Last time this level was tested was back in December, 2016. After 6 years, this level is being retested again and forming a monthly double bottom. At this level, H4 formed a bullish engulfing which indicates a minor support has formed. Retest the support back again, we will take a long position from this support level and continue the long position till the correction of next untested resistance. It is to be noted that market may range here before breaking out towards the upside.

The descending trendline is in formation and still above the current market prices. This trendline needs to breakout for buys and needs price action validation after the breakout. This validation will confirm the bullish trend further.

The golden retracement area is a minor one but also confluences with the support level. This confluence can be embarked with the high potency bullish setup given we are already on a monthly support.

Both the EMA’s are bearish with a bearish death cross. After breaking out for sells, market was unable to retest either of the EMA. Our potential take profits will exist at the confluence of the resistance and ema retest of the 50 EMA.

On oscillators, EURUSD was heavily over sold with both rsi and cci diving as deep till the extents of 20 and -270. From this point, market had to correct itself and it rose back up for the neutrality of the oscillators. At the double bottom of the support, we expect a bullish divergence forming on either of the oscillators which can push up the price further more. At this point, RSI stands at 50 and CCI stands at -33. This points in the direction of the bullish sentiment from the range bound market.

EURUSD is at a level, where it needs to have a bullish leg up to 200-300 pips.

Range bound EURUSD

May 11 2022

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