Euro Price Action Setups: EUR/USD, EUR/JPY, EUR/GBP

Euro Talking Points:

• EUR/USD continued to pull back after last Tuesday’s intra-day reversal.
• EUR/JPY continues to consolidate and the weakness of the Euro has also become noticeable compared to USD/JPY and GBP/JPY. EUR/GBP has shown a decisive trend over the past few days but remains in a longer-term blocking space. A key spot of support is approaching, however.
• The analysis is based on the article price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section

Has EUR/USD bald? I asked the question last Thursday and have since continued to build evidence that this is the case. This week opened with a push below a key support area with EUR/USD setting a recent weekly low, which caused the price to break below the 1.0282 Fibonacci Level that had twice helped to establish support last week.

EUR/USD tested through 1.0250, but did not make it far to the nearest support area of ​​1.0197 before finding a contraction, and that reflected when a pushback into resistance is possible at the previous Fibonacci support point.

EUR/USD Four-Hour Chart

 

As I looked at this week’s technicals for the USD, there was a symmetrical triangle in the EUR/USD that, by itself, does not carry directional weight. But if it was led with the previous move, it could be an argument for a bull penning – but buyers would need to live to defend from the support of the lower trendline formation – and it would not happen that those prices would start. eight

This can keep the focus on bearish scenarios until either resistance is broken or a more solid support area is joined. Sitting below the current price action is the 1.0175-1.0197 zone, and below this is the 1.0090 area that established the monthly October high.

If the sellers can pull out of that area as well, we’re back in the same box as the .9900 handle. If this is joined before the end of the year, it will be a huge test for the Euro Bears.

EUR/USD Daily Chart

 

EUR/USD Big Picture

This inclusion is worthy of its importance in the shorter term, but we can see from the weekly chart of EUR/USD where the pair is set for a strong reaction to last week’s key spot of 1.0350. The bump we’ve seen so far may be the reign of an already-terminated trend after a long lull. But – it could also be a pair working on a longer bottom and all we want to feed further, which is evidence that some element of the upper lows received support, so that the pair will advance again, and this is why that 100 sludge zone from .9900-1.0000 is so important right now .

EUR/USD Weekly Chart

 

EUR/JPY

I looked at EUR/JPY yesterday and the contrast between USD/JPY and GBP/JPY versus EUR/JPY was significant. While USD/JPY and GBP/JPY have already started short-term bullish breakouts, EUR/JPY held below a key resistance spot, charting at 145.52-145.64. This zone came into play again yesterday and produced the same change in the cycle, although that turn has not yet led to a lower-low in EUR/JPY.

EUR/JPY Four-Hour Chart

 

EUR/JPY Triangle or Wedge?

Triangles and wedges can look similar and I will also see that the two patterns are often mixed up by technical analysts; but the way in which they approach is very different. Sometimes both formations can be justified and this makes proper identification almost impossible until it is too late.

There’s a similar setup in EUR/JPY at the moment. There, the horizontal resistance that is in-play remained around 145.62-145.64 and it’s helped to hold the highs. There is also a clear tendency for the bull to support, helping to deform the bottom.

If we take it that way, it is an ascending triangle – and that formation often goes to the bullish breakouts.

However – there is a construction of a little bit above the high that exists around the test of that resistance, so the resistance of the trendline can be superimposed on the price action and this can also be justified. But at that point we now have a rising wedge that goes in the exact opposite of the ascending triangle above the limit, for traders looking for unpreparedness in two breakdowns.

So what does a trader do when there is uncertainty about the formation?

One option is to wait…

Because if that initial breakout is going to lead into a trend, the trader doesn’t have to catch the first move – they can let the breakout happen after they look to trade a new trend after the break. Given the location, usually some steps are close to use for such a purpose.

In the case of EUR/JPY, traders can expect either a bearish or bullish breakout, and when looking for a pullback, they can find higher support at the previous resistance or lower resistance at the previous support. But traders can also incorporate other levels, as we highlighted yesterday with the 144 level in EUR/JPY. Therefore, the bears can look for a break of that level to signal the willingness of the bears to extend the trend, after which they look for a retracement of lower resistance in the area such as 144.50. And on the upper side the resistance is quite defined, if the bulls can break it, it becomes a space to look for a higher low support with the end of the bullish continuation.

EUR/JPY Four-Hour Price Chart

 

EUR/GBP versus Support

EUR/GBP is working on its third consecutive daily candlestick and is extending the move that started last week, as prices started to pull back from the .8780 resistance area. Currently, the price minimum is more than 50 bars away from the key support zone, around the .8577-.8584 area plotted on the chart. This was a high in July that returned to support in September and twice in October.

EUR/GBP Daily Price Chart