General idea about the pivot points:
- R3 and S3 are considered to be clear indicators of the maximum range of extreme volatility, though it is possible to pass them through. Pivot lines work well on sideway markets, as the prices are most likely to be located between the R1 and S1 lines. Within a strong trend, the price is expected to be lower than the pivot point line and continue its movement. If the breaking news released affects the market, the price is likely to go straight through R1 or S1 and even reach R2 and R3 or S2 and S3.
The weekly technical levels of EUR/USD pair.
- If there is no significant news to influence, the market price will be moving from pivot point to support 1 (1.2108). But if there is significant news, the market price may go down through resistance 1 (1.2108) and reach support 2 (1.1990) or weekly pivot point (1.2339) and even support 3 (1.5759) in the long term for the next year.
- The double top of EUR/USD pair will set at the level of 1.2353 (which represents the ratio of 38.2% Fibonacci retracement levels).
- The minor support is going to set at 1.2145. And this level is going to represent a new double bottom today.
- The major support has already set at the price of 1.2108.
- The price hit the weekly pivot point, resistance 1 and support 1 last week, because of the series of relatively equal highs and equal lows.
- We expect a new range of 286 pips this week.
- It should be noted that if the trend is downward, then the strength of the currency will be defined as follows: EUR is in a downtrend and USD is in a uptrend.
The material has been provided by InstaForex Company – www.instaforex.com