The dollar movement on Tuesday, according to the US dollar index, ended significantly outside of the session lows (93.05), forming what many technicians call a hammer candlestick pattern over the daily period. (bullish signal). EUR / USD, given its negative correlation to DXY, ended as a falling star candle pattern on the daily chart (bearish signal).
The economic calendar offered little choice, although housing starts in the United States (number of residential buildings that have begun construction) amounted to just over $ 1.6 million (seasonally adjusted) , beating economists’ forecast by $ 1.55 million. On the agenda today, of course, is the long-awaited FOMC meeting.
Through the lens of a technical trader, EUR / USD charts are interesting.
While the H4 period discovered resistance from $ 1.1742, a previous support base from Quasimodo lower on the curve, the H1 period shows the possibility of approaching the main resistance at 1.1767-1, $ 1776 (joined by the offer at $ 1.1762-1.1774 and H4 Quasimodo resistance at $ 1.1771).
A further technical observation on S1, assuming the intraday lows of $ 1.1715 maintain grip, is the prospect of a bearish AB = CD pattern forming at $ 1.1762 (marked with a 100% Fibonacci projection). Fibonacci fans will also notice a neighboring Fib cluster around $ 1.1756 (61.8% and 38.2% Fibonacci retracements).
Technical studies of the bigger picture reveal a hovering price move north of major support at $ 1.1473-1.1583 over the weekly period. By gleaning further technical confluence with a 100% Fib projection at $ 1.1613 and a 1.27% Fib extension at $ 1.1550, this base remains a key, long-term watch. As for the trend on the weekly chart, the market has been largely bullish since the start of 2020.
Meanwhile, the daily schedule highlights Quasimodo technical support at $ 1.1689. Despite sponsoring a late August bid (black arrow), the stock from $ 1.1689 failed to gain approval north of late July, reaching $ 1.1909; therefore, this classifies $ 1.1689 as possibly fragile support. Assuming daily bearish leadership, the lows of $ 1.1612 and $ 1.1602 (September / November 2020) signify bearish support targets, followed by Fibonacci support between $ 1.1420 and $ 1.1522 (stuck to the bottom of the weekly period main support at 1.1473-1.1583).
Technical levels observed:
If the H4 resistance at $ 1.1742 continues to dominate the position, a test of the H1 period number of $ 1.17 could be in sight. However, as pointed out in our previous technical briefing, a south boost of $ 1.17 on H1 support at Quasimodo daily stationed at $ 1.1689 is a potential scenario. Bids of $ 1.1689 fueled by sell stops below $ 1.17 could be enough to trigger a bullish wave.
Alternatively, if the intraday lows of $ 1.1715 hold onto the H1, a bearish AB = CD pullback to major resistance at $ 1.1767-1.1776 may be welcomed by sellers. This, however, involves a break in the H4 resistance mentioned above at $ 1.1742.