After breaking above the upper channel of consolidation at ~1.1035 on the daily chart and rallying into previous resistance at ~1.1185, is it time for a retracement back into the moving averages with today's bearish reversal bar? RSI bearish divergence seems to warn so in addition to the Fibonacci extension levels where price has reached 200% of the previous swing points. Other than that, price appears overextended, visually.
Capturing the downward cyclicity on smaller times frames offers a handsome reward:risk. The anticipated move down is into the previous consolidation area at ~1.1035 where price also has to opportunity to connect with the 50 ema and look long again, on the daily timeframe. Hence, shifting focus to collect points on the way south on the 60 minute chart, there is visibility of successive lower highs and lower lows.
Entry into a short position on this setup, on the 60 minute or 15 minute chart, is at the low (labelled on the chart) (~1.1157), with a stop loss, preferably above the high. However, since I am viewing this chart now, I would enter at the same level (since presently price is retesting this level, otherwise I would give it a miss) with a tighter stop above the lower high following the high. Potential reward:risk = 4:1.
Some basic housekeeping on this trade would be to trail the stop loss above previous highs upon seeing a new low and lower high (from the previous high).
Capturing the downward cyclicity on smaller times frames offers a handsome reward:risk. The anticipated move down is into the previous consolidation area at ~1.1035 where price also has to opportunity to connect with the 50 ema and look long again, on the daily timeframe. Hence, shifting focus to collect points on the way south on the 60 minute chart, there is visibility of successive lower highs and lower lows.
Entry into a short position on this setup, on the 60 minute or 15 minute chart, is at the low (labelled on the chart) (~1.1157), with a stop loss, preferably above the high. However, since I am viewing this chart now, I would enter at the same level (since presently price is retesting this level, otherwise I would give it a miss) with a tighter stop above the lower high following the high. Potential reward:risk = 4:1.
Some basic housekeeping on this trade would be to trail the stop loss above previous highs upon seeing a new low and lower high (from the previous high).