The euro had a relief rally yesterday due to speculation the victorious Syriza party in the Greek elections will not force an exit from the Eurozone. This pair therefore spent most of its time yesterday making a 50% retracement of the latest swing low on the 1H but it seems to be preparing for some more downside. I was able to draw an exact 480 pips wide bearish parallel channel that contained the price action (PA) for the last 7.5 days.
Both the upper and the lower trendline have been tested 3 times without breaking and PA currently sits at the top of this channel (with a stoch line crossover) so I am looking to sell the high. Assuming it will continue its way down, I have marked two profit targets along the way, both just above key support levels. SL goes outside the channel, 10 pips behind the marked resistance level. There are 215 pips on the line and the trade has a reward – risk ratio of 5.2!
UPDATE: Though this trade looked promising and at one point I was 26 pips into the short, PA suddenly reversed when the euro strengthened after the SNB vice president said it remained ready to intervene in the markets. That´s why we have a stop loss in place to minimise the loss. On to the next trade!
Both the upper and the lower trendline have been tested 3 times without breaking and PA currently sits at the top of this channel (with a stoch line crossover) so I am looking to sell the high. Assuming it will continue its way down, I have marked two profit targets along the way, both just above key support levels. SL goes outside the channel, 10 pips behind the marked resistance level. There are 215 pips on the line and the trade has a reward – risk ratio of 5.2!
UPDATE: Though this trade looked promising and at one point I was 26 pips into the short, PA suddenly reversed when the euro strengthened after the SNB vice president said it remained ready to intervene in the markets. That´s why we have a stop loss in place to minimise the loss. On to the next trade!
You don´t need to be a weatherman to know which way the wind blows - B. Dylan