- Euro rallied over 3% on June 28th, breaking through $1.11 resistance. Daily chart’s overbought RSI suggests avoiding long entries without a significant uptrend.
- Weekly chart shows resistance zone from 2016 at $1.13 to $1.145. Point of control (POC) near this level may create hurdles for bulls.
- Euro remains bullish as Dollar weakens. Watch out for $1.13 to $1.145 resistance and POC as potential barriers to bullish progress.
Recap
In the analysis we did on June 28th, the Euro has rallied over 3%, shooting right through the resistance zone high of $1,11. The RSI is also overbought on the daily chart, but there is no significant trend in tact. This tells us that we should avoid searching for long entries at this point. As I have mentioned many times when looking at the RSI if the market is trending, then the RSI constantly moving into overbought is a very bullish signal. In the case of the current market structure for the Euro, since there is no significant up trend, the RSI moving into overbought is not necessarily a bearish signal but rather a signal to avoid taking longs until a retracement occurs.
Weekly chart
Let’s zoom out by using the weekly chart because price is beginning to move into new levels where we need to go further back in time to find support and resistance zones. The weekly chart shows a resistance zone back from 2016 between $1.13 and $1.145. We could see some resistance at this level, too, because when we draw a volume profile indicator ranging from 2016 to the recent low, the point of control (POC) is just below this resistance level.
Summary
Bulls are in full control of 6E as the Dollar continues to sell off. Traders should note the resistance level between $1.13 and $1.145 and the point of control line as it is likely to cause a hurdle to the bull’s progress in the near to medium term. There is little case for bears at the moment unless we see a floor in the Dollar and a reversal signal in this resistance zone mentioned above.
