To start the week, we have an ideal scenario to sell EURUSD . Or at least appears so.
1. The Daily Channel/Trendline dating back the middle of May, has been broken, and price is consolidating just below.
2. Previous strong support from the beginning of September at 1.1086, also broken and looking for retest
3. On the 1H, price is consolidating with slow upwards momentum in a channel. Mimicking the look of a .
However, the pair is showing a pattern that is all too familiar. A breach of support often stops out the bulls, and then reverses.
Here are 3 reasons not to short, and possibly even consider going long against 1.0997 Lows.
1. Classic Bear Trap pattern with breach of strong support
2. Fed Meeting tomorrow - there are virtually no scenarios that yield a outcome for the USD. The market has been pricing in a rate hike. It has become very clear in the last meeting that without dramatic improvements in , it likely will not happen in December. In fact numbers have dropped since last meeting.
3. The wave count on the 15 min charts show that the first leg down from 1.1492 has completed
The longer term view still points to further bearishness in the pair. The preferred wave count suggests we have completed wave a of wave (c). Which puts us in wave b of wave (c), which has just started. The completion of wave b should offer an excellent opportunity to get short for wave c of wave (c)