This is rather unique and new which i’m going to do. Basically try to predict what’s going to happen on EURUSD. I missed the boat. I was too busy trading EURCAD and other CAD crosses. Read somewhere about further EURUSD weakness down to 1.2 levels (longer term), which got me thinking on how to get back on board the EURUSD.
The chart below shows pure Renko price action. Price broke the major long term rising support line. I plotted another falling resistance line, to which price reacted nicely (represented by the up arrow). The region of confluence comes in at 1.2796 – 1.2736 which is a strong support (marked by previous double bottom) + the falling resistance line which could now again come in as support.
A break of trend line usually sees a rally back up to test the break, which in this case is 1.3216 – 1.3156. I also added Fib time zones to see how things shape up. And it seems like a rally could ensue after 3 more bearish renko boxes down to 1.2736 levels.
On the same chart, once I add the ichimoku indicator, things get a bit more clearer. The notes are on the chart, but to elaborate in brief.
As of now, Ichimoku is not completely bearish.
Chikou span is still above price and Tenken/Kijun sen are still above the cloud. By the time the corrective rally to 1.3 region happens, the Chikou and T/K cross should also signal a bearish trend thus paving way for further downside targets.
In regards to the targets, we can notice a head and shoulders pattern would come into play if the above prediction does hold true.
The head and shoulders gives a downside target to 1.1716, which obviously would be a long term play. Of course, to conclude, the above is predictive analysis and that is how I expect price would move. So for now, let’s see how EURUSD plays out.