The EURUSD Moves To Bullish Territory As Markets Stay Cautious Before US ElectionsBy Adam Teen | Monday, November 7th, 2016
The markets are in cautious sentiments at the moment because of the US Presidential elections this coming week. The EURUSD in particular closed higher because of some understandable reasons to stay away from the dollar in favour of the Euro.
The dollar flop continued even with a very strong jobs report from the US and further expectations that the Federal reserve would hike interest rates in December.
However, the cautious atmosphere still kept the pair within its medium-term range, allowing plenty of opportunities for profitable trades.
Mid term outlook of EURUSD
From a medium term perspective, the pair seems to be driving back to its recent bullish trend. The trend that was panning out before the consolidation seen in the last two weeks.
Chart: EURUSD Daily chart with Fib levels
If a Fib is traced between the August peak of 1.1365 and the most recent bottom at 1.08432 (October 25th), it is notable that last week’s political interference let the price close just above the 50% line mark and is fast headed towards the 61.8% level, 1.1176.
With the high likelihood of the dollar uncertainty continuing into next week, important zones to look at include our first target of 1.1176 and the second target 1.1200.
We would be looking to buy the EURUSD current rise on subsequent price relaxations and cashing in on the bullish frenzy.
The bullish recovery can be termed as active as long as the price remains above our first support at 1.1000, a crucial psychological level, but also nearest to the 23.6% level of the Fibonnaci retracement plotted in the Daily graph.
On the flip side, a break below 1.1000 would dampen our view of this bullish recovery continuing and will set our focus back towards a continuation of the late October drop in the EURUSD.
Narrowing down to smaller time frames
For quick trades, a closer look at the 4 hour chart shows that the bullish candles still look stronger than the bearish candles. The shorter term uptrend is active coming into the new week.
The price remains above the 200MA and that can be a good reference point to place “safe longs”. The H4 200MA lays out a nice yardstick for the long Binary entries as long as the 1.1000 (23%) stays valid.
As an opportunity, place a Bid at 1.11070 (50%Fib) and above targeting 1.1630 (68%Fib) as a very possible target in the current conditions. Buying lower is highly recommended because the coming week is bound to have some whipsawing involved.
Chart: EURUSD 4 Hour chart with entries and targets
DISCLAIMER – The above is a matter of opinion provided for general information purposes only and is not intended as investment advice.Published in News & Analysis