FX:EURUSD has been consolidating for the past 6 weeks, which resulted in Bullish Flag Pattern formation on the daily time frame. The upper portion of the is a really strong resistance level since the market has been rejected from that level 9 times. Thus we need a really strong breakout from this level in order for eurusd to go higher. I have listed the key high impact news events that are most likely to affect the FX:EURUSD early tomorrow morning on the chart above. We might get the strong upside breakout from one of these events by early tomorrow morning OR the events might also take us in the opposite direction, to the downside. Do pay very close attention to these events as we look to trade based on this pattern. Keep in mind that since this is a daily time frame based setup; we need to see a daily break and close above the strong before entering into the long setup. You don’t want to be caught on the wrong side of the market, especially with the amount of new events coming up pretty soon.
I have labelled 3 potential targets; initial target is a minor one since the has not been tested yet. 1st & 2nd targets are major ones since completes at the 1st target level and the 2nd target is a strong rising , which has been tested at least 5 times. The stop would go just under the 50 day moving average (magenta color line) for the long setup. For the short setup, the stop would go above the upper portion of the (yellow falling ).
Do note that we also have formed a Bearish Descending Triangle within the pattern. The breakout that we got earlier was a false breakout since we never got a valid retest of the broken level and thus the pattern would still be considered valid. So if we get a break and close below this then we might be able to enter into a short trade.
KEY NOTE #1: ECB maintained its interest rate @ 0.05%. Need to pay attention to the press conference, which is coming up in 30 mins from now.
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 :)
Follow me on Twitter as well: moneymaking2016