MTF Analysis: EURUSDSimply put, the Euro has been declining for virtually all of July. Demand has been weak and support levels have been broken time and time again. From my POV, this is the first Bullish RSI divergence on the Daily in quite some time. The divergence came with some interesting PA as well:
July 30 and 31 presented two Hammers, followed by a Bullish engulfing pattern. This was soon negated with a Harami then drop in price. As the Bears tested the Hammer's low, there was an intraday break but price couldn't close at the new lows, giving us the Divergence. The 4 Hour shows us this PA in greater detail as well as presenting two trading opportunities.
1. A long on the break of the Harami we've formed.
2. A long on the formation of the Alternate Bat pattern.
The ALT Bat is not one I've traded too many times and Bat's structure isn't as symmetrical as I would like. Neither trade is with the major trend so I'll pass.
Whether or not the divergence and recent inability for price to go lower is indicative of a correction or trend reversal remains to be seen. I'd feel more comfortable taking a short if we do see rise in price or on a retest of another failed support.
