Kumowizard
Long

EURUSD - When to enter a counter trend trade? Long IF...

FX:EURUSD   Euro Fx/U.S. Dollar
187 0 1
In other words, how to play a possible correction?

Since my last post EURUSD             has not really shown any signs of a possible correction, but even the strongest trends have to have a correction at some point. Now I have some additional observations and the picture is getting clearer.

Daily:
Price got really close to a nultiple long term key support/resistance level at 1,2780-1,2900. As I wrote couple of times this trend from the 1,3520 breakdown and confirmation has not have any minor corrections, just some confusing sideaway moves sometimes. The big picture is still very bearish , but again it seems we have a few warning signals.
ADX stuck high, but DMI             lines started to narrow. Both MACD and Slow Stoch have a minor bullish divergence compared to last 1,5-2 weeks Price action. Bears do not give up, but the fact is mkt has all the possible news and expectations priced in already, while there is a chance for a bullish wedge forming close to key resistance.

4 Hrs:
The trend was very obvious on the lower time frame too, and it is still bearish . Actually we have two trend lines in power. The longer one is a lot higher (at mom ard 1,3300) and that is not in danger. However the shorter term trend line is getting close again and stays together with important indicators now.
The short term key level is ard 1,2915. We have a lot of important value lines ard that:
On 4 Hrs chart Kijun Sen, trendline , 100 WMA, Senkou B (future Kumo top now), plus also the daily Tenkan Sen is there now.

From now the strategy for a good risk-reward counter trend long position is simple. IF the pattern really proves to be a bullish wedge , and IF Price breaks that and also closes above the important 1,2915 key level, THEN we will have a chance for a retest to around 1,3100. In case this break happens, you will see further confirmation signals on the 4 Hrs time frame, like Chikou Span cross above Price and likely above Kumo, a Tenkan/Kijun cross and also a DMI             bullish cross with ADX coming back above 20 again.

Don't chase the bottom, do not try to catch the falling knife, but wait and trade only on the break!!! It "looked like a correction comes" a couple of times but as you see, the risk reward is always better when a break takes place.
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out