I have already said a number of times that eurusd
has been in a short term downtrend and selling rallies is the best policy under
such market conditions. Euro has been
rallying into London open and right after the open at around 07:14 GMT price
hit the highest point for today. It then proceeded to form a reversal pattern
that can be clearly seen on both 15 and 30 minute charts.
Furthermore, you can see that resistance coincided
with 200 ema on 30 minute chart. This added extra confirmation about the
strength of the sell signal. Entry point was at 1.1060 with a stop loss at
1.1075. Take profit is at yesterday’s lows: 1.1020. As you may see risk/reward
ratio is good. 15 pip stop loss and 40 pip take profit.
I will take extra caution today as we have important
data coming from US. At 12:30 US CPI is to be released and 18:00 GMT FED
minutes. Both may have tremendous impact on both Euro/Dollar and Pound/Dollar
exchange rates.
So, I might close my short at or before US session
begins, because 30 minutes into it CPI comes out. You don’t want to carry
around a position at such events, unless you are a swing or trend trader and
hold your trades for weeks and possibly months. Volatility should increase as
market is searching for direction and these numbers can surely give direction.
Take care!
I will come with an update sometime around US
session.
Reversal
pattern on eur/usd 30 minute chart
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