EURUSD took out resistance at 1.3734 which was our target yesterday. It has since pulled back through R4 and headed to the .382 Fib retracement and nearing a support at 1.3664. Today is a square up day this could propel the cross to the lower targets with support coming in at 1.3591. Until we break the trend line @ 1.3658 area the uptrend is still intack for a move back to the 1.3767 (.382 Fibo of the Day chart). Remember though it is a squaring day.
After yesterdays breakout the cross has moved 100 pips from the former trend as the Ozzie strengthens. We have built the start of a wedge which is bullish for the cross. Currently the resistance at 0.9892 has held the move. Looking for the continuation northward today but it might make a run at the .382 fib retracement @ 0.9836. If so look for it to build a bull flag. A move out of the wedge up targets the 0.9950 area and then we should see a move to the 1.0014 area( fib extension and parity).
After yesterday’s big run the cross has retraced 100 pips off the bottom and built the start of a bear flag. This remains bearish for the cross. Currently at the bottom of the flag but has not been able to break yet. Looking for the breakout today but it might make a run at the .500 fib retracement @1.5964 as it continues to build. A move out of the flag down targets the 1.5805 area and then we should see a move to the 1.5775 area(.270 fib extension). Lots of great targets to the south if we can get traction here.
The cross is at the bottom of a Descending wedge but has not been able to break yet. One more run up is possible to get some traction for the break If so look for it to make a run at the .500 fib retracement @1.3442. A move back up inside the wedge targets the 1.3675 area and then we should see either a breakout here ( to the 1.3777 area) or the next run down to the 1.3560 area again. There is a further target down that are the support @ 1.3414.
The cross is at the top of the channel and testing making a run at the .618 fib retracement @83.44 from here. We will expect a move back in the channel after taking out the target. A move back inside to the .500 fib (82.82) looks correct. There are further targets down that are the .382 fib @ 82.21 and strong support at 81.67. Upside target is the R5 @ 84.00
WHAT ProAct Traders SEE: The market is in a short term bearish bias. We are sitting on the .382 fib retracement (day chart). We expect the current correction to reach the .500 Fibo and then bounce back to the bullish side. The 50% fibo is at 1.3442 and would expect the market to at least tag that picking up lots of buyers here although there are great targets near the 1.3300 area. Upside risk is a break of the 1.3777 to the 1.3836 (.382)
As we noted yesterday "The initial target for the next move down is the -0.270 area at 1.3600 area". We did that and bounced however we are still in the descending wedge and now looking to go back to that target 1.3600 again. A break of the 1.3600 however, targets the 1.3491 (.618 fibo extension). Upside risk is a breakout of the wedge to the .382 fib retracement @ 1.3793. We like the downside opportunity.