Many traders use many different indicators. There are so many its impossible to tell which ones are useful. Simplicity is key.
The most important tool in a traders toolbox is the ability to deceiver the prevailing trend. Using higher high/ lower low analysis we can identify the difference between strong market moves and weaker ones.
This stems from the well known philosophy that in order for markets to continue moving in the correct direction they need to confirm momentum shift before making large moves.
-Resistance is considered overhead levels that price struggles to break AND CLOSE above.
-Support is considered under price levels that price struggles to break AND CLOSE below.
Notice how I mention, AND CLOSE. It is 100% required that price CLOSES above the support or to declare it broken on whatever time frame chart being traded.
After the perfect pattern unfolded many traders continued to short EURUSD without much success (Took a stop loss myself)
One must recognize the downward momentum was triggered by the pattern (see attached post, traded perfectly.) In actuality the trend is still . At the end of the move, trend reversed only briefly. Price was unable to break the low before moving higher.
At (1) the first top was made. After making new highs, we always expect a retest of old resistance confirming support. (2) Price came back and tested old resistance, confirming support in a reckless fashion. This wiped all long traders out and assured direction for short traders who were burned before. Once everyone was mixed up, the trend prevailed to the upside.
Now we find ourselves at (3). New highs have been confirmed so price is expected to retest old resistance to confirm as support around the 1.19500ish level. At this level I will be watching diligently for signs of rejection and ready to take entry on a single close of any rejection formations.
If we confirm price action, targets are estimated around 1.2300.
IF you found this useful or thoughtful Likes/Comments/Follows are much appreciated!
TElphee – Self-made Technical Analyst. 5-year market enthusiast with experience in Forex, and Cryptocurrencies.
Disclaimer: Oanda data shown. This is NOT investment advice.
Back to the bigger picture, the original chart, price has moved lower to strong support zones. 1.19000 is likely to be tested tomorrow. 4 hour chart will be my guide to short term trend.
Daily chart will need to show reversal signal before I enter. Patience friends. Market is heavy.
Mid term Eurusd -Long
Short term Eurusd -Short
Price has not broken through from the announcement. Almost looks like a good short but I'm not gonna step in front of the train. Waiting patiently for a pullback.