Last Wednesday I wrote about the area comprised by 1.2750-1.2810 to look as meaningful support, which is in fact being tested as I’m writing this post (03:50 GMT).
During last week, the euro managed to expand its range and value moved towards lower priced areas, currently testing the upper band of what I was looking as important support
As described on the chart below, the 1.2830 was tested twice, and finally gave back for lower levels to be probed.- The area between 1.2851-1.2815 was an area to pay special attention due to the lack of meaningful price discovery. These weak areas -as I call them- are characterized for lack of a complete price discovery. They are merely touched and are subject to be revisited at a later time.
The following chart shows basically the same price action of the one above, but I have marked the updated areas where I deem important to keep an eye on.
1.2810-1.2750 is the first area that I´ll be looking to see how price action develops. It is an important area. In my view, these type of profiles -almost perfectly symmetrical- tend to denote, depending on the context, either distribution or accumulation phases. Thus, the run from this area towards 1.3170.
Important to note, is also what lies underneath this area. The extended profile -vertical development- is basically the initiation of the first leg of the upmove, which is also a weak area, as explained before. The current hypothesis I´m working on is that if price doesn´t hold in the value area of 1.2810-1.2750, likely is the are below (denoted by the extended profile) will be revisited, specially the one denoted between dashed lines 1.2720-1.2660.
Alternatively, if buyers show up, the area to note is 1.2844-1.2880, followed by 1.2910-1.2946.
Although the move is somewhat overextended (at the time of writing, price is currently at outside the bottom of the channel), a look at a smaller time frame chart is suggesting the move should continue in terms of direction, both charts are shown below.
I´ll be updating throughout the week.