Hey everyone. Hope we all had a nice start to the trading week. Having a look at our assessment of the AUD/USD, price did in fact break the triangle pattern we were talking about and is now tracking higher. Will be keeping a close eye on a potential end to the 5th wave to enter a short position.
In focus today is a EUR/USD trade I decided to take. This is a high risk trade given that there is significant event risk coming up in the form of the deadline for the EU summit. Based on this fundamental event risk, price could move either way.
However, for the short term, I have gone with a purely technical trade. These are the main points of confluence:
- Triangle pattern completion and breakout suggesting a continuation
- 1 hr inside bar, pin bar setup off of the 10 MA and 20 MA
- Upward sloping trendline dynamic support
- 4 hr doji off the 10 MVA
Note strong resistance line at 1.3936 level. Given tightening to the upper range, expecting a break to the upside. Entry @ 1.3921 which was perhaps a little early. Stop @ 1.3872 and a target @ 1.4050, giving a risk to reward ratio of 1:2.5.
We shall see how this plays out over the European and American sessions. Wish me luck : ).
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