Hello Forex traders,
Yesterday’s Forex market saw a good follow through on the CAD weakness trend which has been in play for quite a while.
Earlier today the Asian session gave a great opportunity for traders to capitalize on the Aussie weakness trade. This was something that we have mentioned in the Double Trend Trap video (click here). Please let us know down below if you took the trade and how many pips you made, thanks!
What about the rest of today? Let’s take a look!
The EURUSD has made an impulse in an uptrend on Tuesday. Yesteday turned out to be a retracement day but price is still hovering above the broken resistance (red dotted).
Also, the 61.8% Fibonacci retracement was respected and price bounced back up. This seems to be a classical setup for upside continuation. However, be careful of the Euro news during the day which could cause some spikes.
Other than that, the structure of the market is looking bullish and price is breaking the horizontal resistance trend line (light green) as I am writing this post. In any case, dips and pullbacks during the day will most likely remain interesting opportunities for more upside.
The target is the -27.2% Fib at 1.3795 / 1.3810 but – depending on the momentum during the day price – could up as high as the -61.8% Fib at 1.3823 or 1.3840.
[Tweet ” Cable seems to be setup for a bullish breakout scenario”]
Also the Cable seems to be setup for a bullish breakout scenario. In any case the structure certainly is clearly bullish and upside trend continuation could happen today or tomorrow. Let’s review why this is so:
1) Weekly resistance at 1.6730 has been broken
2) The move up had a lot of momentum because price moved up 500 pips within a short time frame (couple of 4 hour candles)
3) Price is above the moving averages
4) Price is in a neat uptrend channel (blue)
6) The downside movement we have seen this week is slow and corrective
There are lots of arguments to favor upside trend continuation. Does this mean the trade should be entered right here right now. Possibily, depending on the trading plan. But there is never ever a guarentee that price will indeed continue in a trend.
A break above the consolidation would increase those chances and provide a good guidance when the break could occur. This helps with avoiding a lengthy wait for the trade to develop.
Of course the entry does not necessarily have to be immediately upon the break. The trend line (red) could be the trigger and then the trader can decide whether they want to take an immediate break entry or wait for a hook back, for instance on a smaller time frame. Make sure to check out this article on entry methods.
For the moment the main target is the -27.2% Fib and top of the uptrend channel at 1.6931.
What is your trading plan for the EU and GU? Or will you focus on other currency pairs? Let us know down below!
Thanks for sharing this article!! And wish you a very Good Trading
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