Beginning of quarter 2, 2020

(THE FOLLOWING INFORMATION IS PURELY SPECULATIVE AND WE DO NOT ACCEPT ANY LIABILITY FOR GAINS NOR LOSSES ACHIEVED BY USING THE GIVEN INFORMATION)

             EUR/USD

30 March 2020

Edward M. Hamman

Director of Technical Analysis

BrunHam Investments

 Fig. 1

Good day traders

Another week has passed, and everyone is wondering what is happening next. So the market broke down through the support making a new low, and then retraced to the trend level and the bears pushed down again. But now at the end of the week, it made a higher low, which looks like a good sign. As per my previous post, I placed a buy limit order at the 1.07884 level because I knew the market wont break far down anymore. My trade is in the blue positive and I am convinced it will test the trend level-A, where my exit level is.

The reason why I believe it will go up is because according to Fig. 2 below, the week is completely oversold and the bears are getting tired.

Fig 2








 It is hard to say at this moment if the trend is changing, as the dollar and euro have surpassed each other a couple of times.

Circle 1 showed that the euro became stronger than the dollar, which was trend-changing awesome. But then COVID-19 jumped in and screwed up the plans. The euro dropped with the dollar.

Then circle 2 occurred and the dollar became stronger, and then the euro became the stronger one. And just when I thought that the euro will come out on top, circle 3 happened and now the dollar is stronger once again. In the past month, there were 3 areas of divergence.

It has been a rollercoaster of a past week, but we should all be ready for what is to come.

On Friday, 03 April, the fundamentals were not too good for USD. Nonfarm Payrolls dropped heavily, a lot more than predicted, and the Unemployment rate jumped by 0.90% (probably the work of COVID-19). Markit services and – composite PMI’S are below 50 which is a weak signal for the USD, and Non-Manufacturing PMI dropped.

At the moment it is a sellers’ market, but the 4hr is oversold and looks like it will recover nicely.   

Support levels are:

·    1.07790

·    1.06620

·    1.05215

Resistance levels are:

·    1.12380

·    1.13775

·    1.14960

The above mentioned is just my own theory and speculations, and so far, my weekly projection came true so let’s see if this week will be as bullish as I think it’s going be.