EUR/USD - Why the "strong" support zone will be fall

After worse data on new jobs in the US, the EUR/USD managed to keep above the last significant support in the area between 1.1500 and 1.1600.

On H4, we can trace pure Price Action during the most active part of the day. In the support area we have an absorbing bar as well as a bulky pin bar with a very long tail. At first glance, daydreaming still looks encouraging for the euro, but we must not blindly believe in the technical analysis, which at the moment hides a few negative signals that mass traders do not take into account or just misinterpret. I will start with the positive. The pair stays in the long-term upward trend and is currently at a major diagonal supported by long-term horizontal support and 50% Fibonacci trend adjustment started from the beginning of January 2017. What we need to consider is the fundamental part of the situation and the weaknesses that show the technical analysis. From a fundamental point of view, Europe has been providing good economic data for a long time, and the ECB keeps stressing it as a reason to tighten its monetary policy. However, it is clearly not enough for investors to believe in the euro. The whole positivism generated by good economic data, as well as the central bank's intentions to raise interest rates, is to keep the combined currency in broad consolilation against the USD. In the medium term, it seems that the currency pair will be the dollar as the horizon lacks the foundation to move the euro upwards. On the contrary, the already positive positivism of the ECB's intentions may very quickly have the opposite effect after the publication of euro area economic data worse than expected. From the US point of view, despite the short-term effect of the bad NFP report, the economy has something to show, while the Fed remains firm behind its position, and there seems to be nothing to shake their minds.

Technically, mass traders who rely blindly on the technique are of the opinion that the level reached is simply "iron" and are currently gaining their long positions until they take into account the fact that the price fails to go up. In pure tradable language, an area reached 2 to 3 times is significant and we can take a position, but in the case of EUR/USD, the area between 1.1500 and 1.1550 is reached 7 times for the last year. This means that its significance should not be as big as it is desired at the retailers table. The poor response to promotion after the bad NFP report most likely indicates that there are no big investors on the market to make purchases. I expect if not a breakthrough, at least Stop Hunting impulse in a downward direction that would disappoint a great deal of Long - EUR/USD traders. Be Careful with the Long.

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