Previewing EURUSD for the Week of August 12, 2018
EURUSD reached a one year low on August 10, 2018 falling below 1.14 for the first time since July 14, 2017. Uncertainty surrounding the future of Turkey (an aspirant to join the European Union), issues within the Union, and the possibility of delaying European Central Bank interest rates further. After all, the European Central Bank has not raised rates since July 13, 2011 while the Federal Reserve Bank of the United States has raised the Fed Funds Rate seven times since December 2015 and is expected to make another two rate hikes before the year ends.
EURUSD Daily Chart
A key Support Zone to watch is at 1.13458 and there are a pair of Resistance Zones that has a span between 1.16884 and 1.18507. There is room for the price to run downward.
The price is currently considered oversold, but it could fall further on the RSI and in terms of the price. Taking a long position in this situation looking at a Daily Chart would be the equivalent of catching a falling knife.
Right now the price is below both the SMA of 200 and 50, the SMA of 50 is below the SMA of 200 and the price is obviously below the price when the Death Cross took place. Did this breakout trade get “Saved by the Bell” (closing bell)?
EURUSD 4 Hour Chart
The price from a structural perspective will not be rising back to the Resistance Zone at roughly 1.16. 1.11947 is the next existing Support Zone, which means that there is room to run at least on a 4 Hour Chart.
The RSI of 12 is used on a 4 Hour Chart because it represents a 48 Hour period. The RSI is below 20, which means that it is in an extremely oversold state. It has not been below 20 since May 2, 2018, which was part of a continuing bearish downturn for EURUSD.
On a 1 Hour Chart, the 1.13956 Support Zone is quite strong and it is untouched since the price was flirted with on July 14, 2017. The RSI was on the rise in July 2017. The RSI has not risen completely out of the oversold zone.
The Resistance Zone at 1.14623 is untested, but potentially strong itself.