I was looking amazed at this chain of events that have happened on the EURUSD pair. First of all, price reaches a Daily/240min demand zone around 1.2358 (proximal line of the 240min demand level), right when this is happening, there is a great looking serial bullish/positive divergence on the daily chart, which means price had given three lower lows, but the RSI was showing higher lows, so we already know something was about to happen.
Next thing, a small rally from that level (daily chart) happened and we look at the 240min chart to notice a small demand zone was being formed between 1.2401 - 1.2432, so we take a closer look at the 60min chart, where price had a nice big green candle breaking the previous highs, giving a clue that for that timeframe we were in presence of a bullish trend. Price then had a retracement right back at the previous resistance level, now support. At that precise moment, the RSI had just finished a 3-serial divergence move, meaning that while price was moving lower, momentum had losen strength, so we knew that having these key pieces in place, the bullish move was about to pop again. It did, strongly!!!
After the big bullish move ended, price started to fall and came to touch the demand zone we had mapped out, remember the 240min and 60min demand!! At this first touch, we had bullish divergence on the RSI, so we expected a big move to the upside, and it did just that. It stopped at a supply level (not the best quality, but seemed to work very well). Then price fell and came back to test the previous low, forming a beautiful double bottom and completing another serial divergence.
From all these sequence, I'm expecting another bullish move, this time, hoping price breaks the previous highs and to test for the first time the supply level at 1.2503 - 1.2522.
Lessons learned from this: when you combine supply and demand with divergence and a bit of classic support and resistance, we get a powerful system to trade any market.
Happy trading and let's see what next week bring us!!
Next thing, a small rally from that level (daily chart) happened and we look at the 240min chart to notice a small demand zone was being formed between 1.2401 - 1.2432, so we take a closer look at the 60min chart, where price had a nice big green candle breaking the previous highs, giving a clue that for that timeframe we were in presence of a bullish trend. Price then had a retracement right back at the previous resistance level, now support. At that precise moment, the RSI had just finished a 3-serial divergence move, meaning that while price was moving lower, momentum had losen strength, so we knew that having these key pieces in place, the bullish move was about to pop again. It did, strongly!!!
After the big bullish move ended, price started to fall and came to touch the demand zone we had mapped out, remember the 240min and 60min demand!! At this first touch, we had bullish divergence on the RSI, so we expected a big move to the upside, and it did just that. It stopped at a supply level (not the best quality, but seemed to work very well). Then price fell and came back to test the previous low, forming a beautiful double bottom and completing another serial divergence.
From all these sequence, I'm expecting another bullish move, this time, hoping price breaks the previous highs and to test for the first time the supply level at 1.2503 - 1.2522.
Lessons learned from this: when you combine supply and demand with divergence and a bit of classic support and resistance, we get a powerful system to trade any market.
Happy trading and let's see what next week bring us!!