Bearish EURUSD but only on rallies
USD INDEX- The index has stalled at the 161.8% extension level of 90.25 (from 88.26-89.49). Although the med-term bias remains for the US dollar , some currency majors are highlighting scope for a deeper correction. Bespoke support is seen at 89.94. If we see a break of this area then further support is seen at 89.61, a possible right shoulder of a reverse formation. We look for the deeper correction to buy into.
For this reason, we look for an upside correction to sell into EURUSD this week.
Monthly: In a large corrective channel formation. The trend of lower lows in seen at 1.2670. We have stalled and pulled back from the 38.2% pullback level of 1.2517 (from 1.6038-1.0341)
Daily: Stalled in front of the 261.8% extension level of 1.2620(from 1.1551-1.1959). The move higher can bee seen in 5 waves ( ). With bespoke support located at 1.2123, our risk/reward would be poor to sell from current levels.
Intraday (four-hours) – We have stalled at the 161.1% extension level of 1.2212 (from 1.2539-1.2337). The intraday chart (1 hour) posts a exhaustion 13. Often the indication of a change in the current trend. For these reasons, we look to sell into rallies.
Bespoke resistance is seen at 1.2330-40. This area has been pivotal (swing high from 17th January 1.2324 / swing low from the 30th January at 1.2337).