EUR/USD: Market Looks Set to Stay Within Contained Range
Ivan Delgado | Aug 16, 2018 11:06PM ET
Volumes,
Correlations,
Price
Action
for
Aug
17th
EUR/USD:
Market
Looks
Set
to
Stay
Within
Contained
Get The News You Want
Read market moving news with a personalized feed of stocks you care about.
Get The App
Range
Volume,
Price
Action,
Correlations,
Fundamentals
(H4)
The
recovery
in
the
Euro/US
Dollar
rate
was
unimpressive
to
say
the
least,
as
bids
found
a
large
supply
imbalance
as
1.14
area
got
tested.
The
volumes
and
price
action
(shooting
star
and
retest
on
low
volume)
are
not
supporting
further
climbs
in
the
pair
as
it
stands,
especially
in
the
context
of
a
well-established
downtrend.
The
slight
uptick
in
long
and
short-dated
German
vs
US
bond
yields
may
add
some
upward
pressure
with
the
correlation
on
a
3-month
basis
of
a
3-day
return
being
at
the
highest
this
year
near
90%.
While
a
source
of
imminent
risk
includes
the
elevated
Italian
bond
yields
(negative
EUR),
a
temporary
reprieve
from
highs,
together
with
a
higher
Turkish
Lira,
adds
to
the
case
for
the
price
to
still
find
decent
pockets
of
buy-side
liquidity
on
dips,
hence
expecting
bids
to
re-emerge
to
contain
the
downside.
Overall,
price
action
and
volume
are
skewed
to
the
downside
but
correlations
appear
supportive
at
the
margin,
therefore,
unless
new
developments
in
China
or
Turkey
and
amid
no
data
releases
in
Europe
or
US,
range-trading
might
be
on
the
cards
this
Friday,
with
top-bottom
edges
well
defended.
“Past
performance
is
not
a
reliable
indicator
of
future
performance“
Important
Footnotes:
The
only
Moving
Averages
to
apply
in
the
charts
will
be
the
100
&
200-hourly
exponential
moving
averages,
which
will
assist
us
on
the
overall
directional
bias
of
the
market.
The
green,
red,
and
aqua
lines
are
utilized
to
represent
the
latest
Cycles.
Markets
tend
to
move
in
cycles
of
3
followed
by
a
period
of
distribution
and/or
accumulation.
To
consider
a
cycle
valid,
we
need
to
see
a
daily
move
greater
than
75%
of
the
14-period
average
daily
range.
The
magenta
rectangles
in
the
chart
represent
the
areas
of
most
interest
by
trading
volume,
referred
as
POC
–
Point
of
Control
–and
should
act
as
walls
of
bids/offers
that
may
result
in
price
reversals.
The
rectangles
will
be
drawn
as
long
as
the
area
is
not
absorbed.
The
volume
profile
analysis
tracks
trading
activity
over
a
specified
time
period
at
specified
price
levels.
The
study
reveals
dominant
and/or
significant
price
levels
based
on
volume.
This
process
allows
understanding
market
opacity.
The
analysis
of
Volume
activity
in
the
chart
provides
some
great
insights
into
the
actual
buy
or
sell-side
commitment
to
be
engaged
into
a
specific
directional
movement.
In
the
chart
we
represent
I
ntraday
or
Macro
Support/Resistance
levels
by
drawing
them
in
black
colours,
via
a
thinner
black
line
for
intraday
support/resistance,
while
the
macro
levels
of
support/resistance
will
be
drawn
using
a
thicker
black
line.
In
a
thin
blue
line
we
will
have
the
most
recent
Daily
Highs
and
Lows,
which
play
an
important
role
as
areas
of
support
and
resistance
as
well.
To
reinforce
the
key
area
of
interest
in
an
attempt
to
find
confluential
levels,
we
will
also
use
Daily
Pivot
Levels,
which
include
the
pivot
point
(thick
orange)
and
the
subsequent
3
levels
of
support
and
resistance
derived
from
the
pivot
calculations.
The
analysis
will
be
conducted
from
a
Top-Down
approach
by
analyzing
2
timeframes.
Firstly,
we
will
look
at
the
H4
chart
to
analyze
the
big
picture,
where
attention
centers
around
the
price
action,
macro
levels,
volume
analysis
and
valuations
via
yield
spread.
Secondly,
we
will
break
down
the
analysis
from
a
technical
perspective
through
the
30m
chart
by
studying
the
most
likely
directional
bias
based
on
all
the
information
gathered
as
well
as
the
levels
of
major
interest
for
traders.
The
Ultimate
Purpose
of
this
report
is
to
equip
Global
Prime’s
existing
and
future
clients
with
a
professional
institutional-level
daily
outlook
that
can
assist
one’s
trading
decisions
on
a
regular
basis.
Technical
analysis
is
subject
to
Fundamental-led
News.
Any
unexpected
news
may
cause
the
price
to
behave
erratically
in
the
short
term,
while
still
respecting
the
most
distant
price
references
given.
Written By:
Ivan Delgado