A downward channel has formed in the previous 2 weeks, as shown in the chart. Currently we're sitting at the top of the channel with a nice long pinbar from friday's close - although it closed on green and not in red.
Setup:
- Top of channel
- Pinbar on channel top-line test, firmly rejected
- Overbought on Stochastic, decent level on RSI.
DXY is also heavily overbought on the 4h chart, and there are firm indications that USD might go higher in the coming week. At the least - a retrace of fridays fall is very likely due to it sitting on support in ascending trendline.
Trade
- Very likely 50-100 pips down on monday/tuesday.
- Await initial move: it might move slightly closer to trendline before bearish retracement.
- Safe alternative: Await firm bearish candle and then short for the continuation 20-30 pips.
Setup:
- Top of channel
- Pinbar on channel top-line test, firmly rejected
- Overbought on Stochastic, decent level on RSI.
DXY is also heavily overbought on the 4h chart, and there are firm indications that USD might go higher in the coming week. At the least - a retrace of fridays fall is very likely due to it sitting on support in ascending trendline.
Trade
- Very likely 50-100 pips down on monday/tuesday.
- Await initial move: it might move slightly closer to trendline before bearish retracement.
- Safe alternative: Await firm bearish candle and then short for the continuation 20-30 pips.
Comment:
Note to self: This is why you put wide stoplosses