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EURUSD W1(Weekly) Chart Analysis – Strong Resistance Zone, Potential Bearish Divergence, Stochastic Oscillator, Volumes Indicator
On the weekly chart, the price which is moving higher has currently reached a strong resistance zone. We also have a potential bearish divergence that is forming between the first high that has formed on 30th August 2020 and the second high that has formed on 27th December 2020 based on the MACD indicator. Also while looking at the Stochastic Oscillator we could see that the price has reached its extreme. In addition to all this, we could see that the volumes are dropping based on the volumes indicator. We may consider these as evidences of bearish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
EURUSD D1(Daily) Chart Analysis – False Breaks, Bearish Divergence
Looking at the daily chart we could see that the price has created two false breaks (marked in yellow dotted lines) which we may consider as evidence of bearish pressure. In addition to this, we have a bearish divergence that has formed between the first high that has formed on 17th December 2020 and the second high that has formed on 30th December 2020 based on the MACD indicator. Also, we could see this bearish divergence on both the RSI indicator and CCI indicator as well, which we may consider as other evidences of bearish pressure. There is also a good possibility that the price might still create new highs and test the 1.2350 level. Until the strong resistance zone shown in the screenshot below holds my view remains bearish here.
Technical Analysis & Forecast Summary
EURUSD W1(Weekly) Chart Analysis
- Strong Resistance Zone, Potential Bearish Divergence, Stochastic Oscillator, Volumes Indicator
EURUSD D1(Daily) Chart Analysis
- False Breaks, Bearish Divergence
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