Usually I am a buyer of descending (or falling) wedges when we reach support as I typically would be looking for an eventual breakout higher. However, this time may be different. The reason why is as we are hitting support, the pair is also trading below the long term 61.8% Fibonacci retracement of the February 2020 lows (pre covid) to the April 2020 highs (post...
EURMXN LONG - Buy Entry - D1 Chart
Entry Price: Buy @ Market
Stop Loss: 23.34243
Take Profit: 23.99506
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EURMXN seems to be attempting a retest of the downtrend after it latest attempt to break out of the wedge. There is a history of false breaks over the last 3 years, but when it goes it really goes. Stochastics look a bit oversold in the s/t so the downtrend might hold this time and fuel a move higher.
$EURMXN is making higher lows in a descending wedge which is typically a reversal setup (higher in this case). There is a strong inverse relationship with risk assets (SPX in this case) so a move above 24.1700 would be a very bullish event.
Wait For The Close Above the Neckline at Horizontal Level 24.07952. After the close above level; resistance level turned support.
Wait For The Retest Of The Neckline At 24.07952. Watch For A Pin Bar or Rejection Candlestick to form at the horizontal neckline.
Enter Trade At The Closing Price Of Pin Bar or Rejection Candlestick.
Set Target Price Using...
EURMXN Take Profit At 24.27719 ; 24.37017 ; 2021 Apr 28 Trade Idea at 20:00
After Pin Bar formed, placed buy limit order at 24.11001. Stop Loss Level is 24.04090. R-Multiple is 2.42R.
Why did this trade work perfectly? Four or more touches for support resistance level, identification of trend, and pin bar price action signal.