The EUR/USD pair is forming a bullish pennant. This pattern represents a technical figure of continuation of an uptrend. Since October 13, it has been forming the flag. A confirmation could occur only if it consolidates above 1.1615. This would mean that the Euro could gain a bullish momentum and could reach the 200 EMA located at 1.1665.
During today's American session, the Euro is trading at 1.1607. It is touching the top of the pennant that acts as its imminent resistance. A pullback below this level could continue the consolidation. Then the Euro could fall to the support level of 1.1570, thus continuing to operate within this bearish channel.
A sharp breakout of the bullish pennant could be a bullish signal to buy above 1.1615. Our first target is around 1.1657.If the bullish force continues and the price consolidates above the 200 EMA, the next target will be at 1.1718 (4/8).
The short-term outlook remains bearish for the EUR/USD pair as long as it remains trading below 1.1670. Any technical bounce towards this level will be considered a correction and an opportunity to continue selling.
On the other hand, if the euro cfails to confirm the break of the pennant and fixes below the SMA of 21 located at 1.1584, and closes the day below this level, this would mean that the downward pressure from the dollar continues. In thi case, the Euro may fall to the support of 1.1535 and if this level is broken it would slide to 8/8 of a murray at 1.1449.
The market sentiment report for today shows 61.10% of operators who are buying the pair. A small change compared to the previous week's reading of -2.18%. This would be a sign that the euro could recover and if this figure decreasing, an upward movement could occur in the next few days.
The eagle indicator is showing a strong bullish signal. An increase in the volume is also observed. So we must wait for the confirmation of the break of the technical pattern and thus be able to buy with targets at 1.1718.
Support and Resistance Levels for October 18 - 19, 2021
Resistance (3) 1,1665
Resistance (2) 1,1640
Resistance (1) 1,1617
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Support (1) 1,1577
Support (2) 1,1535
Support (3) 1,1517
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A trading tip for EUR/USD for October 18 - 19, 2021
Buy if the price breaks above 1,1615, with take profit at 1,1657 and 1,1718 (4/8), and stop loss below 1,1580.