Technical Analysis January 8th: Ether reaches fresh heights
EURUSD, Daily timeframe
Bias: Pair in Uptrend
The pair has found a short-term resistance at 1.2065 and currently continues to pull back from it. We’re in an established uptrend so the direction we’d be looking to capitalize on is North. This is to take place only from suitable places once price reacts from them. We’re looking to trade reactions from those levels and not to take action after all elements align and not before.
Price could continue to retrace from the 1.2065 resistance level toward the immediate support at 1.1900. If the pair bounces from that area (with a daily bullish rejection), this would be in direction with the Uptrend. Only after the potential daily bullish candle occurs there could be a potential long. Targets above are 1.2065, 1.2100 and 1.2150.
We could see a consolidating motion around the current resistance area at the beginning of the week. Once a market catalyst with influential enough news is registered by the market, there could be a breakout. Note that we need to see a daily closure significantly above 1.2065 in order to add to our longs or open new ones.
If there is a more serious retracement of price that would be in the form of breaking support levels and closing the day below them. Breaking of 1.1900 would suggest further weakness toward 1.1700 and 1.1500. Traders should be cautious if price closes below 1.1500 and attempt no long trades.
Last week was bullish for the precious metal, a total of 180 pips up. This is the fourth week of bullishness and price action is currently in line with the Uptrend. We’re monitoring the following developments:
The commodity could retreat and test the immediate support level at 1300.00. This could be a chance to enter from better, weaker prices on the upside. A mandatory element is a bullish trigger candle on the daily timeframe rejecting the level. Target above is 1350.00.
If price falls and closes below the support at 1300.00 with a strong bearish move, this could bring price back within the boundaries of a ranging pattern, 1300.00 being the resistance and 1240.00 the support level of the range.
The support at 1240.00 could offer better (i.e. lower) prices to join the uptrend. Prior to that we’d need a bullish rejection candle on the larger daily timeframe. Target above is 1300.00 as immediate level recently reached.
Bias: ranging, 4-Hour timeframe
The digital currency is currently testing the immediate support at $ 15, 500 (as of Monday 07:00 GMT). We could see price recover from that level or proceed to test deeper levels of support. The scenarios that are on our watch list are:
Price could bounce from the support at $ 15, 500 and this could offer an opportunity for a long trade. An obligatory ingredient is a trigger on the 4-hour timeframe rejecting the level. Targets above are 17,500 and 19, 500. Always remember to place a stop loss on all of your trades regardless of the market traded.
If Bitcoin closes below 15, 500 there are immediate support levels that could be tested underneath. Those could offer entry points only if price rejects that unequivocally on the 4-hour timeframe. The levels are: support at $ 13, 000 and the lower one at $ 11, 300.
In the scenario where price plunges below $ 11, 300, this could mean more bearishness to come. As you know drops can be as wild as rising movements so make sure you keep an eye on the chart at least a couple of times a day. No long trades in this scenario. Price could drop significantly.
Bias: Bullish, 4-Hour timeframe
Ether has reached all three designated targets from our bullish scenario. Namely, the targets reached are 989, 1000 and 1050. See Jan 5th Technical Analysis. Price action has been consistently bullish for the past 8 trading days. The potential developments we’ve outlined are:
Price counties its bullish journey and doesn’t revert to test previous levels. Targets above are 1200, 1250 and 1300.
The digital currency could go for a retest of previous levels which could give traders opportunities to go with the trend from lower levels. Immediate first support is located at 995, next one is 860, then 740, 600 and then the farthest 500.
All these could offer places for going long only provided one of them is being rejected by a 4-hour bullish candle showing considerable bullishness and strength.
A collapse below the far 500 level could have a snowballing effect with more traders going short. In this development there should be no long trades initiated as bias would be tilted to the bearish side.
Wishing you happy and successful trading!
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