EURUSD#6 - Weekly Homework

[Monthly Chart]

EMA200 is being good support in the monthly chart. 3 more trading days before July, so far it is a hammer pattern. How will it close this month?

I attended the TA Weekly Meeting at IIC for the first time. There I learned to mark Support & Resistance using current and previous month's highs and lows. There are 3 lines for reference now, 1.2466, 1.2142 and 1.1875.


[Daily Chart]

On a daily chart, Big Blue C2 is being labeled tentatively, which is about fb33 retracement. However, the bullish sentiment from last week might sustain and continue to move up and break 1.2466 (C2). Reasons to call it bullish:

1. Price closed above flat Kijun for 3 days already, Kijun might be a good support for now
2. Tenkan-Kijun cross in daily chart
3. Price above the cloud on the 4H chart, and the cloud seems to be thick enough as a good support for going up for a while


[4-hourly Chart]


[Hourly Chart]

There are several resistances to consider:

1. EMA200 on 4H chart, about 1.2400
2. Last week's high, about 1.2466, where a double top is to be formed
3. fb33 retracement of Big Blue C1, about 1.2480

If all these resistances were breached, uptrend is confirmed, then the immediate WTP is 1.2611, which is 2x A, about the bottom of the cloud on the daily chart. However, a strong bull might run up to 1.2785 region, which is 3x A, fb50 retracement of the Big Blue C1, Chikou meets Kijun and the flat top of the cloud on the daily chart.

If the resistances cannot be broken, then price might fall back to about 1.2272, which is about the flat Kijun on the daily chart, stay inside the cloud on a 4H chart, and a downtrend might happen after that.

When that happens:

1. Downtrend starts when price closes outside the cloud on the 4H chart, meaning Chikou breaks below the price as well. Chance for short entry when price retraces up to around 1.2250, with SL in the range of 40pips.
2. As mentioned at the beginning of this post, a support at 1.2142, which is the low of the previous month. So price might bounce up from this level, a possible formation of Big Blue J wave, a K might then be formed at the flat cloud region on a 4H chart below (blue rectangle)


[4-hourly Chart]

Conclusion:
1. The trend for the coming week is rather uncertain. Several resistance levels to be broken for the uptrend to be confirmed, but a reasonable SL will be rather big. Unless a better SL region can be identified, a long trade is quite risky at the moment.
2. Watch out for reversal pattern on 4H chart if price does move up to around 1.2466 region, when double top is formed. SL in the range of at least 30pips.
3. If price doesn't move up, a short is possible when price closes outside the cloud on the 4H chart. Use cloud, Kijun and Chikou to determine SL. Possible downward resistance is 1.2142.

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