Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.
The Eurusd is currently retesting the previously broken neckline on the daily chart, which also converges with the underside of the down trendline on the weekly. In most cases this would have been a straight-forward setup for a short trade. However, this is not true in this situation, as the bullish candle which breached the trendline could be getting retested for a push higher. As a result there are conflicting signals and the fact that they appear on the leading timeframes poses difficulties in determining direction. Due to this scenario, I will be keeping a close watch on the 4-hour timeframe for my cues. The last 4-hour candle closed bullishly above the channel resistance line, so it appears that I have no confirmation for shorts at the moment.
If the 4hr were to close back below the channel, that could signal a trading opportunity to go short. As long as it remains above, and therefore supported, there is risk for a further push higher. The next major resistance level after this area would be the underside of the daily trendline at 1.4580s. If that level does get tested we will nned to watch for either a breach for further gains, or a reversal setup for the move back down.
Thanks for reading. Safe and successful trading!
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