Macro EUR/USD Analysis: 1.1908 Is The Magic Number - Forex News by FX Leaders

Macro EUR/USD Analysis: 1.1908 Is The Magic Number

Posted Thursday, August 10, 2017 by
Shain Vernier • 2 min read

Taking a step back from intraday price action and looking at the macro trend is a good exercise. Often, the view from 10,000 feet can tell us which way price is going and expose flaws in our trading. So, where is the EUR/USD likely to end up for 2017 and how do we make money in the meantime?

Macro Technicals

The EUR/USD has rallied with a vengeance since January. The weekly time frame gives us a clear look at the strength of this market.

EUR/USD WeeklyEUR/USD Weekly Chart- Bold Move Since January

This week’s trade has taken the EUR/USD below the previous week’s low for the first time since late June. It is a notable occurrence and may be the precursor to sideways price action or outright failure.

The key 38% Fibonacci retracement of 2017’s range is in at 1.1309. For now, we will not argue Elliot Wave counts and the appropriate highs/lows to use for our retracement. Simple is good, and 2017’s range is pretty basic.

1.1908 is the yearly high established last week. The June failed sell-off also traded down from a yearly high before moving higher. This is important to note. The key psyche level then was 1.1300 and now it is 1.1900.

The key area to watch is 1.1900-08. We are not done testing this area.

Bottom Line: Until we see a serious bearish component to the market, I will be looking for bullish patterns on the daily charts to get in long. When price approaches 1.1908, short-term sells with solid R/R’s will be available using the yearly high as a concrete out.

On a time frame as large as the weekly, fundamentals determine the market's ultimate direction. The EUR/USD will need a catalyst to enter a full-blown correction. This Fall’s monetary policy announcements from the U.S. Fed may be that catalyst.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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