Simit Patel

The price channel on EURUSD is still holding strong; see the daily chart below. The chart also reveals some pin bars forming off the upper trendline, suggesting bears may be defending that level.



Zooming out to the monthly chart, we see a bearish engulfing pattern having formed on the completion of the November candle.




If the price channel holds, we may see EURUSD between 1.2000 and 1.2800 by the end of the year.

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morgandallen

Simit - a quick question. Your rising trendline that starts around August 23rd - was that initially a support line that turned into resistance? Also, what does the horizontal channel that you've drawn represent? Just trying to brush up here. I understand the current downward channel. Thanks!

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Simit Patel

hey morgan,

the line from august low to the high in november is a fibonacci measurement. the three horizontal lines are the 38.2%, 50%, and 61.8% retracement levels of that fibonacci measurement. so, we are at about the 61.8% level now (i.e. market has given back 61.8% of the move from august to november).

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Tekmnd

That is an upper resistance line on the re-trace. So price is going down, then it came back up for a bit, now it seems to be dropping again. The horizontal line can be considered a spot that, if price breaks through, some would consider a break and end of the down trend.

It is also a stop cluster location. Most traders that are short on a swing trade will place their stops just above that line forming a huge cluster of open orders in one general location.

Cheers
Tek

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Abhinav Asthana

Technically, I also agree very much that Euro is going to sell off! Its very much crystal-clear for me.

I never really comment on Fundamentals as that is not my area but going technical at this point, I am very very much sure that we will see a sell off. (Unless of course, interfered by any fundamental factors)

So I am also very much agreeing to Simit's commentary here.

I can see a minor 0.23 fib level near today's candle,


So my overall bias: Sell Euro if going for daily charts.

I dont trade on such a long period, but if I was trading on daily charts here, I guess my stop would be some 150 pips above (Previous high is about 130+ pips) with target of 300 pips and breaking SL to even once price crosses somewhere 70+ pips. Once price comes near 300 pips, one can trail the remaining.

Regards,
Abhinav Asthana

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morgandallen

Thanks, guys. Another pretty simple question. Say I was away from the computer and this morning I just looked at my charts at noticed all of these things myself...the monthly bearish engulfing pattern, the daily downward channel. I think to myself: damn. I missed a touch of the upper channel line yesterday as a good entry place. Would you say the best thing to do would be wait for price to come back up to the channel line at some point in the future before entering? I see the setup. I'm just wondering what one does when a good entry is missed and you still feel confident about the overall outlook. Thanks.

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Simit Patel

nice chart abhinav! and good timing -- eurusd just broke below 3200.

@morgan, i think waiting is conventional wisdom, and i agree. patience is a huge part of good trading IMHO. chasing, while always tempting, is not good trading IMHO and is indicative of a psychological error. sometimes, if it bounces off a channel or some support level but we are still pretty close to it, i will enter via market order on the rationale that it is close enough and still sound in terms of risk/reward. if we are not that close to it, though, then i think it is best to wait IMHO. some would probably argue it is best to wait always, as waiting allows for best risk/reward ratio over the long term.

but i think it is worthwhile to consider targets and exits. DREBG has targeted 1.0900 on EURUSD.....for folks who agree with that target and think the high is already in (i.e. 4250), it makes good sense from a reward/risk perspective to enter. i generally think market orders are best for longer-term perspectives IMHO.

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larryfolson

Put a fib measurement on the the previous days candle. Then place a short limit @ the 68 or 50% of the candle. What ever works with you money management rule. With a stop accordingly.


BTW price pulled back 68% of the previous 2 days candle. (I personally would place @ 68%. it is safer IMO)

Also Put a fib on the 4hr. Notice price pulled back to a bout the 68 fib. with the 50% being a key level.
It is very difficult to trade the larger time frames without fibs IMO

Hope that helps.

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JeffShepherd

Hi everyone,

On the flip side we have an upward trend starting from 7th June and look at the indecission in todays and yesterdays candlesticks.

Attached Thumbnails

 

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forexer

Don't bet on a fall just yet.

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