Cryptocurrencies and Forex Analysis January 12th: More Euro strength
EURUSD, Daily timeframe
Bias: Pair in Uptrend
The euro dollar respected the support at 1.1900 and pushed back from it by gaining about 98 pips. We’re yet to see if the immediate target and resistance level at 1.2065 will be soon breached.
If price action breaks above 1.2065 and closes the day considerably above it, the level could then become an immediate support. The crucial element here is to see price closing the day beyond that specific area. Targets above are 1.2100, 1.2150 and 1.2200.
In case we see price pull back from 1.2065 and drop, this could signal the start of a ranging motion located between 1.2065 and 1.1900. Not a favorable pattern.
A drop below 1.1900 and more importantly –a closure below that level could spur more bearishness toward 1.1700 and even 1.1500. These could become levels for doing business on the long side if price reacts with a bullish rejection candle away from them. Target would be 1.2065.
The precious metal gained about 58 pips and marked a second day of bullishness. We’re yet to see if this is a recovery from the retracement we’ve discussed. The developments we’re observing are the following:
If bullishness persists and the week closes at higher prices, this could mean that gold is in a continuation mode. Target levels to keep our eyes on are located at 1350.00 and 1400.00.
It could be the case that price hasn’t finished the retracement. As previously discussed, the immediate support is located at 1300.00. This level could offer an opportunity to go on the long side. The mandatory ingredient is a strong and forceful bullish rejection from it. After a daily candle has potentially occurred, that could be the time to go with the uptrend.
If we see the precious metal drop below 1300.00, this could mean more weakness. There’s plenty of distance between that level and the support coming next. First one is at 1270.00 and next support is at 1240.00
Bias: ranging, 4-Hour timeframe
Similarly to Ether, Bitcoin is ranging in motion around the immediate support at $ 13, 000. There was a fresh news event reporting that South Korea wants to draft a ban on virtual currency trading on their exchanges. Crypto markets responded by dropping in price and then recovering from the initial news.
Price could push back from the support at 13, 000. We need to see a daily candle closing above that level. If this takes place, we could go long. Targets above are 15, 500 (this could also be a short-term resistance). Next level is the record high that was scored last month at 19, 400.
Bitcoin could either test or break the support at 11, 300. Traders have to be cautious here. If price starts to trade below 11,300 no long trades are to be either held or initiated. The magnitude of bearishness coming in could be substantial.
If price respects the support at 11,300 that should be in the form of a daily bullish rejection. A potential strong rejection could offer an opportunity for recovery on the upside.
Bias: Bullish, 4-Hour timeframe
Ether is consolidating around the immediate support at 1181. We would need a strong breakout to either the upside or the downside. As a general rule, we’re not interested in consolidations. Trending moves capture large chunks of profit potential and this is the strategy we’ve accommodated.
The cryptocurrency could drop below the immediate support discussed and if it closes the week with a bearish candle, there are plenty of support levels to look toward to. Each of those is a potential level to do business at on the long side. An obligatory ingredient is a strong bullish rejection candle. Supports are located at: 995, 860,740, 600 and finally the farthest support at 500.
If price recovers from the immediate support at 1181 and continues to trend up, targets above ate 1200, 1300 and 1400.
In the event where negative news comes in and price plunges below 500 support, this could signal a lot more bearishness. No longs in this scenario. Keep in mind that news have direct impact on the price of virtual currencies. Our calendar is always a useful reference point for catalysts that drive changes in price and valuation.
Wishing you happy and successful trading!
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