Yellow zones- critical zones based on the monthly/ weekly timeframe
Red zones- critical zones based on the daily timeframe
Blue zones – critical zones based on the 4h timeframe
Orange zones – critical zones based on the 1h timeframe
Blue line – upper trendline of the monthly closed triangle
According to last week’s EUR COT Report, we can see that it remains with really strong “long” contract positions. It is expected that the EUR keeps its upward momentum.
One thing is sure- the price will reach the 1.16000 zone, since it is the upper-trendline of the monthly closed triangle. And as I have explained in my last webinar, such zones are like magnets for the price. In order to catch as many good trades as possible we need to take a close look at all of the possible price movements. Right now, the price is above the upper-trendline of the 4H timeframe near 1.15400 (orange trendline).
We have prepared 2 possible scenarios:
1. Since the EUR COT contracts indicate a powerful bullish momentum, price may avoid corrections before reaching the upper-trendline of the monthly closed triangle near 1.16200. Afterwards a strong correction will take place.
2. The second scenario will give us more opportunities. If the price doesn’t break above the 4H upper-trendline, we can expect it to fall towards the monthly critical zone near 1.14100. There we have a triple confirmation point- the monthly critical zone, the 0.5 Fibonacci level and the bottom-trendline of the 4H timeframe. All of these factors will create a strong upward momentum and then we will see the touch with the 1.16000 mark. This on the other hand will most likely create a head&shoulders pattern which may lead towards a trend-reversal.
It is crucial to follow the price in order to see which scenario will take place. But remember that in both cases after price touches the upper-trendline of the monthly closed triangle, strong sell pressure will come, and a correction will happen.
Happy Trading!
Red zones- critical zones based on the daily timeframe
Blue zones – critical zones based on the 4h timeframe
Orange zones – critical zones based on the 1h timeframe
Blue line – upper trendline of the monthly closed triangle
According to last week’s EUR COT Report, we can see that it remains with really strong “long” contract positions. It is expected that the EUR keeps its upward momentum.
One thing is sure- the price will reach the 1.16000 zone, since it is the upper-trendline of the monthly closed triangle. And as I have explained in my last webinar, such zones are like magnets for the price. In order to catch as many good trades as possible we need to take a close look at all of the possible price movements. Right now, the price is above the upper-trendline of the 4H timeframe near 1.15400 (orange trendline).
We have prepared 2 possible scenarios:
1. Since the EUR COT contracts indicate a powerful bullish momentum, price may avoid corrections before reaching the upper-trendline of the monthly closed triangle near 1.16200. Afterwards a strong correction will take place.
2. The second scenario will give us more opportunities. If the price doesn’t break above the 4H upper-trendline, we can expect it to fall towards the monthly critical zone near 1.14100. There we have a triple confirmation point- the monthly critical zone, the 0.5 Fibonacci level and the bottom-trendline of the 4H timeframe. All of these factors will create a strong upward momentum and then we will see the touch with the 1.16000 mark. This on the other hand will most likely create a head&shoulders pattern which may lead towards a trend-reversal.
It is crucial to follow the price in order to see which scenario will take place. But remember that in both cases after price touches the upper-trendline of the monthly closed triangle, strong sell pressure will come, and a correction will happen.
Happy Trading!