16.08.201809:11 Forex Analysis & Reviews: Analysis of EUR/USD Divergences on August 16. The bullish divergence marked the beginning of the correction

4h

On the 4-hour chart, the EUR/USD pair had a reversal in favor of the European currency and began the growth process towards the correction level of 127.2% - 1.1431, following the bullish divergence of the MACD indicator. On August 16, there is a developing bearish divergence in the CCI indicator. Its formation will allow traders to expect the pair to turn in favor of the US currency and continue the decline towards the Fibo level of 200.0% - 1.1227. Breaking off the quotes from 127.2% correction level will similarly work in favor of beginning the fall of the euro/dollar pair.

The Fibo grid is built on extremes from June 21, 2018 and July 9, 2018.

Daily

On the 24-hour chart, the pair continues to drop quotations towards the 127.2% correction level - 1.1285. The pair retreated from the 127.2% Fibo level and will allow us to consider a reversal in favor of the EU currency and some growth in the direction of the correction level of 100.0% - 1.1553. Today, there are no visible divergence in any indicator. Fixing the quotes below the Fibo level of 127.2% will increase the chances of continuing the fall towards the next correction level of 161.8% - 1.0941.

The Fibo grid is built on extremes from November 7, 2017 and February 16, 2018.

Recommendations for traders:

Purchases of the EUR /USD pair can now be made in the target at 1.1431, with a stop loss order under the Fibo level of 161.8% since the pair completed the closing above the correction level of 1.3333 with the formation of a bullish divergence.

New sales of the EUR/USD pair is suggested to open with the targets at 1.1333 and 1.1227, if the pair retreats from the Fibo level of 127.2% with a Stop Loss order above 1.1431, or if a bearish divergence is formed.

* The presented market analysis is informative and does not constitute a guide to the transaction.