From the 4h chart above it can be seen that the EUR/USD pair has been in a downtrend since 12th October and finally some signs of consolidation can be seen as the price tries to retrace. For me, it looks like an inverse Head & Shoulders pattern is being formed at the moment, which is a bullish sign at least in the short-term. Alongside with the following confirmations, it can be quite a good trade:
1. Break of the downtrend line/ down channel
2. Break of the downtrend on the RSI which has prevailed since the 12th October
3. Bullish divergence
4. Daily chart - close to oversold levels (RSI 35%) + a long tail + approaching an important support level
Furthermore, the pair is currently attempting to break the 20 day EMA and if we going to get a close above it will clearly indicate that the medium-term uptrend is back.
The trade idea is to wait for the second shoulder to be formed and then open the long position on the break of the neckline. For additional confirmation, a 4h time-filter should be applied. The SL level should be just under the second shoulder and the profit target based on the M.P.O. projection which is also a psychologically important level (1.15) + close to 78.6% Fib retracement.
But admit that there could be another leg down to touch the support level at 1.13. Watch the chart and wait for the confirmations outlined above!
Wish all a great trading day!
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1. Break of the downtrend line/ down channel
2. Break of the downtrend on the RSI which has prevailed since the 12th October
3. Bullish divergence
4. Daily chart - close to oversold levels (RSI 35%) + a long tail + approaching an important support level
Furthermore, the pair is currently attempting to break the 20 day EMA and if we going to get a close above it will clearly indicate that the medium-term uptrend is back.
The trade idea is to wait for the second shoulder to be formed and then open the long position on the break of the neckline. For additional confirmation, a 4h time-filter should be applied. The SL level should be just under the second shoulder and the profit target based on the M.P.O. projection which is also a psychologically important level (1.15) + close to 78.6% Fib retracement.
But admit that there could be another leg down to touch the support level at 1.13. Watch the chart and wait for the confirmations outlined above!
Wish all a great trading day!
Support me with likes and follows!
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