Stop Clearing and Price Rejection

Price Rejection at Support/ Resistance

Stop Clearing at Key S/R levels

Pivot Points in the Euro

Daily Double Top

EUR/ USD had a relatively quite session. On the daily chart we see that the support level around the monthly pivot at 1.2568, the low of August 2010 at 1.2588 (purple line) and the 20 SMA (purple) held the market so far.

1 hour Pivot Points

The circled areas on the hourly chart (left) show how price bounced from support/ resistance.

On the hourly chart we see that the Euro moved up to the daily pivot at 1.2611 at 7 a.m. GMT but market could not breach the resistance and moved lower from there. The Euro penetrated the monthly pivot and cleared some stops below it and yesterday's low but the Euro closed above this key resistance level on the hourly chart (green circle).

After the clearing of the stops and the rejection of  prices (close above the monthly pivot on the hourly and higher low on the 5 min chart) market moved to the other side of the consolidation (1.2568 - 1.2614) to test it.

The EUR/ USD breached the pivot point and the recent high at 1.2614 (stop clearing) but the key level at 1.2624 (orange line- January low) provided strong resistance and the Euro bounced back.

The false breakouts (stop clearing) seem to be typical in a quite session when everyone is waiting for major news and thus traders are lacking commitment/ low participation.

5 min Forex Chart Education

On the 5 min chart (above) we see how price bounced from support/ resistance (blue circles) and the formation of consolidations/ bull/ bear flags (red circles) as well as some Fibonacci extensions (100 % and 161 %).

The price zones of the consolidations (red circle) provided some temporary support/ resistance as the market moved back into these zones.

At 9 a.m. market formed an inverted Head & Shoulder at the purple line (August low 2010). During the pattern market did not confirm the break of the purple line (no close of the succeeding candles below the range of the 9:30 a.m. breakout candle on the 5 min chart). Market breached the brown neckline and moved up to the H&S price target (100 % of the larger swing in the H&S-(left shoulder to head)-moved to the break of the neckline).

Between 1 and 3 p.m. the Euro breached the monthly pivot but the Euro formed a higher low and closed above the monthly pivot on the hourly chart (rejection of the breakout). From there, the Euro moved up to test the other side of the consolidation range and market found temporary resistance at the weekly pivot/ 161 % fib extension at 3 p.m. and the daily pivot at about 4 p.m.. The chance of a breach of the daily pivot increased due to the bull flag, the rising 10 SMA, the prior test at 7 a.m. (second test now) and particularly the fact that the prior 4-hour candle closing at 4 p.m. already touched (respected) the daily pivot so that this resistance level got weaker with the beginning of the new 4-hour candle (Breakout Timing setup).

Key Support/ Resistance Levels

Important Support/ Resistance

Key S/R Levels in the EUR/USD

Key Support/ Resistance Levels 

4-hour Euro Chart

Daily 20 SMA and Pivots

The Euro Dollar moved up to the 61.80 % fib extension (A-B at C). Today, market bounced back from this resistance level. The monthly pivot and daily 20 SMA (purple line) currently act as support. The low of January at 1.2624 (orange line) and the low of August 2010 at 1.2588 (purple line) are key Support and Resistance levels.

On the 4-hour chart (left) we see that the Euro respected the orange line and the 4-hour 10-SMA (red line). However, after the close of the bearish 4-hour candle at 12 a.m. (red circle-left) (Timing setup) the Euro fell below the orange line/ 10 SMA.

On the 1 hour chart (below) we see that the 12 a.m. hourly candle (A) respected the daily pivot at 1.2598. The 1 p.m. candle penetrated the pivot point and respected the weekly pivot at 1.2586 and the purple line (August 2010 low) but closed above the daily pivot on the hourly chart. However, the 3 p.m. hourly candle resumed the down trend and penetrated the already touched/ respected support levels (second test). The Euro found support at the monthly pivot point key level.

1 hour EurUsd key S/R levels

The price zone of the circled consolidation (blue) from Friday also provided some temporary support.

 On the 5 min chart (below) we had a kind of inverted Head and Shoulder in the Asian session with the green neckline and a prolonged left shoulder at the key support level of the low of January (orange line). At 11 a.m. we see a typical 3-wave consolidation at the support level (orange line) before the Euro resumed its downtrend. The duration of the consolidation is the same like the duration of the prior 5-min down swing. Most of the circled candles on the 5 min chart show how price bounced at key support/ resistance levels

5 min Euro US Dollar