EURUSD - Buy

Current Level: 1.0973

Observations on the daily chart: From the February 2018 high of 1.2511, the EURUSD has been in a downtrend, consistently forming lower lows until February this year at 1.0777. The rally to 1.1494 (+6.6% from the low) could be one of two things: either this is an early sign of a reversal of the trend or this is was covering shorts until the downtrend resumes (confirmed if EURUSD falls below 1.0777).

Observations on the Ichimoku Cloud: EURUSD has spent a large part of the last two years trading under the cloud with the occasional, short lived, rallies above it.

Observations on the momentum oscillator: The momentum indicator is trading at the 100 level. This indicates weakness in the EURUSD but does not confirm a downtrend.

Observations on RSI and Stochastic Oscillators: The RSI indicator fell to oversold territory when the EURUSD was at 1.0777 in February this year and has since then moved in line with the EURUSD without any divergence. The stochastic oscillator has generated a bullish divergence when the EURUSD fell from 1.097 to 1.0777. This could be positive for the currency in the near term.

Summary: The Trend seen in the currency pair has been negative since 2018. However, in the last one month there have been some indications on the oscillators to show that this may change. There is no confirmation of this yet, however short positions on the EURUSD should be cautious.

It is possible that the trend may reverse suddenly, strict stop-losses should be maintained.

Resistance levels for EURUSD: 1.13 (+3% from current level), 1.16 (+5.7% from current level)

Support Levels for EURUSD: 1.07 (-2.4% from current level) 1.046 (-4.6% from current level).

Trade Ideas:

Scenario: An Investor is considering entering the markets at this time (The funds allocated to the trade represents only a small portion of the overall portfolio / net worth).

Position: BUY Entry Level: Buy in 2 parts: 1st @ current price (1.097) and 2nd @ 1.067 (Average buy price at 1.082) Target: 1.155 (+6.7% from average buy price) Stop Loss: Weekly close below 1.06 (-2% from average buy price)