EURUSD Daily Chart Synchronising with Higher Time Frames’ Bullishness



EURUSD will largely be influenced by today's US CPI release. However, beyond that, European inflation remains sticky. The ECB still has a battle on its hands in its efforts to implement price stability. To this end, the EURUSD technically remains supported.

Monthly Chart Analysis (Primary Trend)

1. The exponential moving average (EMA) is a trend-following indicator.
2. EURUSD's green 5-month EMA is above its orange 10-month EMA.
3. This puts the monthly EMAs into bullish mode.
4. The monthly RSI is above 50 (blue rectangle).
5. This is the bullish side of 50 and implies a longer-term underlying positive momentum.
6. The monthly trend is a proxy for the primary trend and is an important determinant of overall trend direction.

Weekly Chart Analysis (Peak and Trough Analysis)

1. EURUSD has charted a higher trough (HT) followed by a higher peak (HP) in its weekly time frame.
2. This puts the chart into a defined uptrend.
3. Its weekly RSI is above 50 (blue rectangle).
4. This denotes an underlying positive momentum.
5. We are assessing if the next higher trough in the series is being charted.
6. If price closes above lasts week's high of 1.1045 (black dashed horizontal), it will be regarded as an encouraging development in this regard.
7. We note that there is underlying support around the 1.0950 level (green shaded horizontal).

Daily Chart analsysis (Timing Aspect)

1. Given the positive primary trend and weekly chart, the daily EMAs look promising.
2. The green 5-day EMA is converging on the orange 10-day EMA (black ellipse).
3. A golden cross here will put the daily trend-following indicators in bull mode and in sync with the higher time frames.
4. The RSI is threatening to pop above 50 (blue rectangle). If it does, it will be regarded as positive.
5. It will suggest that the underlying daily chart momentum is bullish in nature.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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