On the technical side, there is a lot going on with the 4H timeframe and there are several trading opportunities to be found. I have charted them and will describe them here, but to avoid cluttering up the chart I have refrained from plotting trade entries, exits and stop losses. It would have made the chart messy.
We have a bullish Bat pattern where the price is approaching the potential reversal zone (PRZ). Trading the CD leg of a towards its completion is called the BAMM strategy and is a legitimate trade setup in itself. Those who are already short on this pair, could remain short until PA has tested the full PRZ and starts showing signs of reversal. This means that from the current price there is between 70 – 115 pips more downside before a significant retracement. I do not advise anyone who is not already short to enter short now (the break of the B point would have been a good entry), but if your plan and method tell you that you can, by all means go ahead.
The A and C point of the happen to form another price pattern called a double top. A is a if the wick of the second meets at least the candle close of the first, while the candle close of the second does not exceed the wick of the first. In other words, PA rallied and tried to make a higher high after the bad NFP data, but failed. This reversal pattern might not have played itself out completely yet, even though after failing to print a higher high, the price already dropped significantly and broke the neckline. We are looking for a retracement to happen soon (which is likely given the oversold state of the RSI), which might coincide with the reversal of the . This retracement could end either at the neckline (which might act as resistance) and where there is a nice confluence with the of AD or –in case its strong, which is less likely- at the of AD. Trading this retracement is only for / countertrend traders who know what they are doing, since the overall trend is .
After the retracement I would have an ideal place to go short on this pair to profit from the (either at the neckline or of AD, depending on where price might reverse again). I would then remain short until the of the prior leg down, maybe even until 1.0273 (key daily ) depending on PA.
To be clear, I am not predicting any of this will happen, but if it does, I hope to have provided several valid trade ideas (both with and countertrend) and areas where to enter those trades and where to exit. These are on my watch list. Call it trading à la carte. My advise to anyone looking to take one of these trades would be to consult your own trading plan and apply the rules of entry, exit and risk management you normally use and are comfortable with. Good luck and may the pips be with you!
NB For some reason the support line at 1.0273 is not showing in the chart (I did chart it!), apologies for that.
Based on my interpretation price action & EW I am expecting retracement bounce in EURUSD though not sure of the extent as per the chart below. It remains to be seen.
Excellent work. Appreciate it.
(1) we are likely to see a –significant- retracement before PA hits the low of the March the 13th
(2) after that retracement, PA will go bearish again
(3) it is likely to break below the low of March the 13th.
Lets see how this all plays out!
BTW - There was no criticism of your work. We have different approach and with similar outcome anticipated is remarkable. Even if we are both prove wrong or only half right it is an attempt to frame what is viewed as random and chaotic with some degree of accuracy frequently enough suggest that effort made using TA has merits.
It is not necessarily everyone's style but you are clearly setting high bar. Nothing will detract from that, I mean it sincerely.
Yes indeed 2 different approaches come together do give extra weighting to considering the trade. :)
Take a look at my analysis of supply and demand on the daily chart: