I have been watching EURUSD closely for the past couple weeks. This pair has been in an interesting spot for awhile and not until recently has it really caught my interest for a potential short opportunity. If you look on the 1W time frame, which I usually wont go to that large of a time frame, but it actually shows that EU had been in a Head and Shoulder structure and had broke the neck line. Now to go down to more recently whats been happening if you take a look at the 1D (daily) time frame it displays that EU has been making lower highs with a descending trend line its holding, as well as lower lows, without a true market rollover yet. Or impulse move however you want to look at it. There was a point in time on August 28th that we had seen EURUSD was attempting to break that descending trend-line to the upside. BUT there was something I saw that I didn't like, it was very WEAK. Especially for being a daily time frame respected level/trend line that would cause for a high volume break, and we just didn't see that. After a couple days of weak movement up price ran back down with strength by the sellers! Causing that to become a fakeout! NOW I was interested. I waited for the re-test to make sure the buyers were weaker and sure enough the sellers smashed it back down again. Now we're here and I'm looking to go short because the sellers are showing me they are interested in shorting this market, the reason doesn't matter as much as you think! So lets check it out.
1D Chart: *On this timeframe EURUSD had a fakeout below a descending trend line that has been holding since June/July *on the re-test the seller had come back in and smashed price action down showing strong seller momentum *the market had created a lower low lower close candle now on the daily timeframe with STRENGTH
4H Chart: *we are going to use this chart to get more of the specifics *price action is now sitting at a recent significant structure area on the 4H timeframe so lets wait for a reaction for better price entry (if we get one) *we want to look for a weak re-test into the 1.15900-1.16200 area and wait to see strong seller interest at this level
Remember to ALWAYS stay disciplined to your trading plan and risk management. It is very crucial to formulate a disciplined and consistent approach in the markets. If you are not prepared they will get the best of you and you will never be profitable unless you implement that discipline. Think of every trade like this, a STRATEGIC BUSINESS DECISION. It will allow you to truly wait for probability to be on your side as well as help you formulate a business plan for each trade. Remember never to risk more than 2% of your trading capital per trade. Keep an eye out on this trade!
EURUSD never displayed that seller interest again. As we can see it has broken above the descending trend line now with buyer strength.
Short opportunity never occurred. On to the next one! Cheers!
JosePips
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As we can see yesterday coming into today this pair had pulled back into structure around the 1.16100-1.16200 zone. There hasn't been the seller interest I want to see yet to short this pair.
That's why it's so crucial to wait and make sure the seller/buyer is still interested after a pullback. Doesn't mean it won't be a good short but the interest/momentum isn't there yet. Keep an eye out!
Short opportunity never occurred. On to the next one! Cheers!