Intraday technical levels and trading recommendations on EUR/USD for October 17, 2014

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The recent bearish slide below 1.2870 invalidated the previous attempt of bullish reversal. Thus, bearish decline towards 1.2680 and 1.2510 took place shortly after.


Last week, the EUR/USD pair looked oversold and was trading beyond the lower limit of the channel before bullish momentum could get it back inside the channel.


That's why, price action around 1.2580-1.2600 (the lower limit of the channel) was important to determine the next destination.


Bullish recovery was expressed off 1.2500 and 1.2600 to push towards 1.2700 and 1.2830 (back inside the channel).


The origin of the bullish engulfing pattern (around 1.2600) provided a good BUY position as suggested in previous articles. It's running in profits now.


The upper limit of the movement channel (1.2880-1.2900) is being approached. Bearish pressure is anticipated to be applied.


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The medium-term bearish trend remains intact as long as the bears keep defending the price zone around 1.2880-1.2900 (the recent consolidation zone).


A short-term bullish Head and Shoulders pattern was established on the 4H chart as anticipated. 4H fixation above 1.2700 confirmed the reversal and allowed the bulls to reach 1.2850.


A valid BUY position was suggested around the origin of the bullish Head and Shoulders pattern (price level of 1.2660). The final target is being approached today around 1.2900.


Recommendation :


Price action should be watched around 1.2870-1.2900 (upper limit of the channel and previous broken demand level) for one more SELL position.


Stop loss for this short position should be located above 1.2965.


On the other hand, price level of 1.2700 should be watched for price action if visited first. It may provide another intraday long position.


The material has been provided by InstaForex Company - www.instaforex.com

USD/CAD intraday technical levels and trading recommendations for October 17, 2014

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Overview:


Two months ago, the ongoing bearish swing (initiated in March 2014) was hindered at the price level of 1.0620. This price level corresponded to the lower limit of the channel as well as the backside of a steeper bearish one.


In August, a bullish breakout off the movement channel took place. This enabled a bullish Flag pattern to be established. Bullish targets were successfully hit, including price level of 1.1230 and recently 1.1289.


Strong bullish momentum has been expressed for a couple of weeks. As mentioned before, breaching the price zone of 1.1230-1.1260 and fixation above it triggered new bullish swing.


Few days ago, the USD/CAD pair tested the upper limit of a steeper bullish channel depicted on the chart. This corresponded to price level of 1.1370. Bearish rejection was anticipated after such a long bullish swing.


Bearish correction occurred towards 1.1260 as expected. This is manifested in the resulting daily candlesticks which indicate strong bearish rejection around 1.1330-1.1350.


Recommendations:


The USD/CAD pair looked overbought on the daily chart. The bulls were pushing beyond the upper limit of the movement channel. Conservative traders were looking for short positions at such high prices as suggested.


Price zone of 1.1370-1.1390 was recommended as a valid SELL entry with SL located just above 1.1400. It's running in profits now.


On the other hand, a break below 1.1230 ( previous prominent top and 50% Fibonacci level ) indicates another SELL entry with higher risk. Initial targets are located at 1.1180-1.1160.


The material has been provided by InstaForex Company - www.instaforex.com