It then traded sideways for about a day, creating a before popping back above this daily . After reaching the top channel line again, it started dropping fast, once more breaking below and closing below the daily as well as an hourly where previously the had formed. This strong move was followed by two consecutive tests of the broken hourly support, which acted as resistance. In between these tests, the pair printed a new low. This provides us with a new opportunity to enter short and this trade candidate features on my watch list. Provided the “weekend gap” does not disturb the picture, I will be looking to sell this pair at this level after the Asian open.
SL goes 10 pips above the daily for extra security. TP1 = trade risk, TP2 = where the lower channel line converges with the 125 handle, which is a psychological price level. In terms of trade management, when TP1 is hit I would take profit on 1 position and roll my stop loss to breakeven, enjoying a risk free trade hunting for TP2.
There are 225 pips to be made (if this pair follows the script) and the trade has a reward – risk ratio of 2.3!