Monthly

EUR Currency is running and running, where is the end, or at least a temporary barrier? Let’s find out. First of all, let’s take a look at monthly chart – unconfirmed trend shifts to bullish, based at Exponential MACD.

The blue lines on the chart are our Oscillator Devinateur that shows levels of oversold (lower band) and overbought (upper band) that is particularly interesting for us. You can see how level of oversold has held the market in June and now Oscillator Devinateur shows that level of overbought for October is 1.3961.

Now, you can see that just above the market two Fib resistance levels – 0.618 at 1.3892 (red line) from the recent high and 50% at 1.3942 from all time high (black line). So, we know in advance that just above the market monthly overbought at two Fib resistance levels. Do you want to buy right here? I’m not sure…

At the same time, look at blue circle – there was a strong resistance area here – weekly Fib Conjunction resistance area at 1.3446-1.3544 and market absolutely disrespected this level. That’s important, because when this happened, market very often revisit these areas during retracement lower.

Weekly

Weekly time frame adds a lot of important details to monthly analysis. Weekly trend is bullish. First of all, look at blue circle again – see, there was a combination of 3/8 Fib resistance (black) from a all time high and 5/8 Fib resistance (red line). Also this area has had an Accordance with 61.8% Expansion target of ABC-bottom pattern (purple Z-line). Other words this was a very strong resistance and market has passed through like hot knife through the butter and didn’t even a bounce.

The next target is 100% Fib expansion from ABC pattern at 1.4030 area. AB and CD legs are very symmetrical, and have almost the same speed. Some traders call this pattern as AB-CD sell, because the more symmetrical the legs, the more resistance in point D. Oscillator Devinateur shows that level of overbought for current week is 1.4005. Also 1.3994 – monthly pivot resistance 1 (I do not have it on my chart to keep it as clear as possible).

So let’s look at intermediate results – 1.3960-1.4030 includes – monthly and weekly overbought, weekly 100% expansion target, monthly pivot resistance 1 and two Fib resistance areas. I expect that market will show deep retracement after it will hit 1.4030 Expansion target. This is the level, where you should take chips off the table, because retracement can be deep.

The last important moment on weekly chart is acceleration from 61.8% expansion target to 100% expansion. It means that the achievement of 1.618% expansion target around 1.49 is probable, but after retracement, that can be deep.

Daily

Trend is bullish market just creeps with daily overbought line. This is not typical for financial markets (for commodities rather), and it means that there is a real strong buying on the market. Personally, I do not want to just jump in – strong resistance is near and market is overbought at all time frames. At the same time, if market will show some retracement until it will reach 100% weekly Fib expansion we can enter on the Long side. And I like 1.3517-1.3550 area for this purpose. The gold line is weekly pivot point, the green dash line is a weekly pivot support 1 and it very close to 3/8 Fib support. Just above the market the red dash line at 1.3927 this is pivot resistance 1. So, I intend to enter Long, if market will penetrate the green line (this is 3x3 DMA) and reach 1.3517-1.3560. We at daily overbought, so I do not like to enter at nearest Fib support. Target 1.4030 or previous high that will be formed before possible retracement. If there will be no retracement until 1.4030 – I will be flat.

EUR stands just below strong resistance area. We can possess ourselves on the Long side but potential is limited. This can be done for short-term trade only, and only if EUR will show retracement before it will reach 1.4030 weekly target.

Short-term – enter Long from 1.3517-1.3550 area with target at previous highs or at weekly 1.4030 target as maximum. Or, if there will not be retracement until 1.4030 stay flat and be prepare for solid signs of weakness in 1.40-1.4030 area. I expect solid bounce to the downside from there.

Long-term – close Long positions in 1.3960-1.4050 area. I expect strong retracement to the downside. EUR can reach as far as 1.33 area.