EURUSD 4-Hour Trade Idea: Unmasking Hidden Bearish Divergence
The EURUSD 4-hour chart is where we currently set our sights. Here, we unveil a trade idea that hinges on the fascinating interplay of price action and the RSI indicator, revealing a hidden bearish divergence amidst a prevailing downtrend.
Price action tells a clear story - it's still moving lower, firmly ensconced within a downtrend. Yet, it's the indicator that has captured our attention, unveiling a hidden bearish divergence - a secret divergence that often foretells further downside potential.
Our watchful eyes have also discovered a critical middle support area, lying in wait, strategically positioned in the range of 1.05422 to 1.05308. The key to our trade lies in its breaking.
Once this support area gives way, we eagerly anticipate a potential short setup. At this juncture, we exercise patience, waiting for the stars to align with even more confluence. We may choose the disciplined path of waiting for the coveted breakout and retest pattern, ensuring a calculated entry into a short position. Alternatively, we might opt for a more assertive entry with a tight stop-loss, in line with our commitment to managing risk diligently.
As we tread this path, remember that trading is an art as much as it is a science. In a market governed by uncertainty, patience and strategic discernment are the pillars of success.
Price action tells a clear story - it's still moving lower, firmly ensconced within a downtrend. Yet, it's the indicator that has captured our attention, unveiling a hidden bearish divergence - a secret divergence that often foretells further downside potential.
Our watchful eyes have also discovered a critical middle support area, lying in wait, strategically positioned in the range of 1.05422 to 1.05308. The key to our trade lies in its breaking.
Once this support area gives way, we eagerly anticipate a potential short setup. At this juncture, we exercise patience, waiting for the stars to align with even more confluence. We may choose the disciplined path of waiting for the coveted breakout and retest pattern, ensuring a calculated entry into a short position. Alternatively, we might opt for a more assertive entry with a tight stop-loss, in line with our commitment to managing risk diligently.
As we tread this path, remember that trading is an art as much as it is a science. In a market governed by uncertainty, patience and strategic discernment are the pillars of success.
Our first entry was made on the retest of the adjusted critical support range, now situated between 1.05657 and 1.05738. We entered our short position at 1.05696, implementing a prudent stop loss at 1.0646. This entry aligns with a 1:2 risk-reward ratio.
Recognizing the ongoing market dynamics, we've also entered a second short position at the same support range of 1.05657 to 1.05738. This entry, however, was made with aiming for a more favorable 1:3 risk-reward ratio.
As we navigate this dynamic market environment, we keep our focus sharp, aiming to maximize our trading potential in the ongoing battle between buyers and sellers.