We are looking for price action
to descend into the potential reversal zone (red rectangle
) and are looking for a small reversal. The higher timeframe analysis doesn't indicate a definite uptrend, so be cautious taking this kind of trade. We cannot use buy stop orders at the PRZ since price action
and confirmation candles will determine whether we will actually enter this trade. EURUSD
is currently trading in a bearish channel
(30M), so the reversal zone may indicate when the price is going to touch the lower channel bound before reversing, but still within the channel. This would be a short term trade.
We are seeing mixed data out of the USA, and no news/data events are scheduled for 3/27 from now. We will see some German and Euro-zone data tomorrow, but it shouldn't have a great impact.
UPDATE: Trade actually went exactly as planned. Price descended into the PRZ and actually seemed to violate it, but rather it represented a stabilization in price. Placing a buy order in the PRZ area with targets at the previous structure resistance
paid off easily. Looks like our channel is now broken on both the downside and upside, and we might be set for a rally coming soon.