Yesterday we have seen a strong move Up , driven by the data .
Resistance at 1.06700 was taken out ( now acts as a support ) , and we have closed the day Above the sharp downtrend Resistance line.
There are no important data today , so we’ll see if this move can be sustained .
If it does, we’ll have two consecutive Closed bars above the downtrend resistance line, and that would signal a change of trend.
However, if close will be bellow 1.06500 , it would be a perfect Sell signal and run at 1.05500 would be inevitable.
Supports at 1.06800, 1.06700 , 1.06500 & 1.06250
Resistances at 1.07250 , 1.07700 & 1.08250
Daily Chart
So what do we do next – how do we trade what we see on the daily chart ?
After finding out Major levels on the Daily, we go for the Weekly chart to try to figure it out is the move on the Daily going to be sustained or not, and how far it can go in both directions.
Just by looking at Weekly, it is pretty obvious that Downward forces are in play, and there is so much that the pair has to overcome to become Bullish – and not only in terms of Rate, but also in terms of Time-Space – do not expect it to go straight for the jugular J This is not some illiquid instrument that can be driven like a YoYo ! This is the heaviest one that there is.
Support and resistances on both charts – Daily & Weekly are pretty much the same…small differences have to be taken into account.
But even if EURUSD can reach the highest Resistance from the Daily, it will still be in the Sell Mode on the Weekly.
From my huge experience, I can tell you that to me it looks very Bearish, and won’t be able to change that stance before lots of things occur ( if they do at all)
Weekly Chart
Great, you did some show of , but what should we do??? Should we Buy or should we Sell – you’re asking….
Well, for that to be determined, we have to go to smaller time frames, and 4h is one of the most usable charts for intraday trading.
If this 4h bar closes Bellow 1.06800 , it would signal the opportunity to short it , using even smaller time frame like 1h – as for the Signal to be correct we need TWO consecutive Closed bars below that level, and waiting for the second one on 4h might be just a waste of time , watching how they go in the direction we anticipated, but without us on the wagon…
4H Chart
Keep in mind that possible target should be in 1.06500 area, so R/R ratio has to be accounted for.
Without any real data today, I cannot see EURUSD suddenly going for the Rally Up just like that…at least some consolidation is needed , and test of the supports to be able to determine the outcome.
Everything else would be plain and simple Gambling, and we do not gamble…
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