Welcome to the blog and thank you for making time available for this Forex article and the FX advice.
Today is time for an update on the EURGBP. The Forex pair has indeed made both the up move and down move exactly as I expected in my article from March 6. Please take a look at the article link here on EURGBP to Parity Part II. I hope that some traders were able to book some good pips on those Forex trade setups 🙂
If you missed those 2 trades, don’t worry a single second. There is a far better trade setup coming soon! Read further for the great FX tips.
The currency is now at 0.85 price level which is the 382 Fibonacci retracement of the swing high swing low to the upside.
The 382 is a very key level for strong trends because retracements tend to reverse back in the original trend direction at these levels.
Because the currency has reached this major support level in the market, I will be looking for the following scenarios to unfold before attempting a long on the EURGBP:
1) I will wait for the currency to break above the last resistance levels at +/-0.8660. Once it breaks above that resistance area, I will start Fibbing swing highs, swing lows and will buy for upside targets;
2) I will await a 5 wave impulse on a lower time frame like the 1 hour chart and then the subsequent 3 wave correction. I will place a Fib on the completed 5 wave structure and expect the ABC to finish at the 618 Fib and will attempt a long from that level;
3) If the currency does choose to correct deeper than I will see how price reacts at the next bigger 500 Fib and attempt a long there if we see interesting price action confirmation signals.
Please the Forex chart of the EURGBP for the visual guidance of the text.
The last update on the USDCHF is already dating back to the 28th of February. I anticipated a break of the consolidation to the upside, but I recommended a hook back to the broken consolidation area, which however never happened unfortunately. The power of the uptrend was too strong and the currency broke and went. Read here for the article “Swiss cheese trade”. http://winnersedgetrading.com/the-swiss-cheese-trade/
What happened after that?
1) In the meantime the Swissy progressed nicely to the upside moving up another 200 pips;
2) The currency, however, then started to see some upside problems;
3) The 4 hour chart started showing signs of divergence;
4) The USDCHF move down impulsively to the downside.
5) The up move has been quite quite weak so far and looks corrective.
I see the following trade setups, although they are counter trend:
a) If we break the purple bottom and hook back to the same broken bottom, then that would be an interesting short;
b) Or if we move back up to the 786 retracement pip and get candle stick reversal pattern at that spot. This could turn into a head and shoulders pattern.
Thanks for your reading and wish you good trading!
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