1.3000 was a psychological level for the EURUSD for the past 3 weeks. To be precise, a strong resistance can be found between 1.3026 – 1.3040. All that has changed since the start of European trading today.
Telltale consolidation gave early hints of continuation move
We can see that 1.3006 high was first reached on 16 July 2010. Since then, we had at least one attempt to breach this level in Week 29 followed by several early this week (week 30).
Did we get a clue that the market was finally going to go up? You bet! Price action over the past 2 days show us a horizontal consolidation at the resistance with ever tightening levels just hinted of an explosive move. The fact it did not weaken or paint a reversal pattern but instead stuck near the high just tells of the market’s inclination to go long.
Going forward, it would be logical for some kind of throwback action for late bulls to enter. The best place for look for this throwback is in fact 1.3000. At the same time, bears will still be looking for the move above 1.3000 to fail so any large movement below 1.3000 would be seen as failure.
Hi TH,
I was looking at the chart as you send the tweet and based on what you have written, are you suggesting that there might be a retracement later at around 1.3000?
Apart from that, it seems there is a MR@1.3099. Do we wait for a strong BULL candle to pass that line before entering or do you reckon there is enough force for price to blow past this resistance line?
Rdgs
Boon