EURUSD…FLIP A COIN??

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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  • Thanks, Austrader.  The weekly chart completed a ‘D’ extension then pulled back to a .382% retracement only. This suggests to me that this might be followed by an aggressive run towards the 1.5000 region at least before finding major resistance at previous high. A breach of daily high at 1.4940 is needed to confirm this view and to complete the bullish reversal. All the best! 🙂

  • Hi HR. I think the highs/lows on charts can vary depending on broker feed, but my monthly bar was still above and suggesting a retest of breakout bar. Bulls are definitely on fire…Thanks for the comment 🙂

  • Thanks for the comment, Johnokav 🙂

  • Thanks for the comment, Trailingwinds. You were right…wedid get a pullback but support held to push it higher.

  • Sorry about only just responding to your question, Gregor. The major res. point was at 1.4450 but it has since been breached. The next major resistance level I see is the underside of daily channel line at 1.4700. Thanks for reading.

  • Thanks for the comments, Lionel. I try to avoid bias in my analysis and allow the market to show where it wants to go. As it happened… The 4hr up channel held nicely and did not give any follow-through on pullbacks.

  • Austrader

    If you look on a weekly chart we have A B C D  retracement. A smaller bullish pattern and now a larger one playing out. Target may be possibly 800 pips away… 1.53100, but i am just guessing like the rest of you!

  • HR

    Hi Sophia,
    quick question about the weekly chart, i just put a trend line on the weekly chart, connected to the last two highs, by me it shows it did close above that line, doesnt it look like it will continue higher? 

  • Hi Brooks. To date, I have no reason to be shorting Eurusd. I do, however, in my analysis look at potential for both bullish and bearish action. Thanks for reading 🙂

  • Brooks79

    If your thinking Short on the Eurusd for any reason, then you might as well go to Vegas and put it all on Red…..  The odds are about the same… 🙂