Here I wanted to provide everyone with my weekly outlook on FX:EURUSD , by using simple price action and current pattern being formed. Let's begin:
Simple Price Action:
Looking only at raw price action we see that after a long selloff, market has gone into the consolidation phase and has been in this phase for the past 31 weeks or 8 months. The key strong resistance level that has been tested 4 times by the market is the 1.14582 level. Do not be mistaken, this market is still in downtrend (since no major structure has been violated) and what we have been seeing is just the retracement in the form consolidation phase. Notice how the market has also tested the 50 day moving average 3 times, now currently testing it the 4th time and still not being able to break and close above the 50 day MA. Thus, 50 day moving average is also acting as strong resistance for this market.
This is an example of a consolidation type pattern. Ascending triangles usually form AFTER large price movements, which indicates that the market has entered into consolidation. After seeing the strong selloff on this pair, now we see the buyers trying to push the price higher but are unable to do so. This might be an early indication of weakness in buyers strength. The direction of breakout for this pattern could be in either direction. All we have to do is wait for the breakout in either direction and enter in the direction of the breakout with any type of favorable setup (e.g. bullish/bearish on the retest of broken level OR or double top/2618 trade setup with divergence, etc), which would allow us to enter into this trade with minimum risk. See the chart above for more details.
Please feel free to AGREE or DISAGREE with this idea by leaving a comment below. Hit that thumbs up button (top left corner of this chart) if you like the idea. Thank you everyone for all the SUPPORT that you have given me so far, I truly appreciate it. Good luck everyone :)
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