Hey Guys – quick little idea that I’m in on the EUR/USD. Use this inline with your own analysis.
Unless you’ve been living under a rock for the past 7 months – you’ll know what EU finally broke the 1.1450 level after almost 2 and a half years. Price surged above and finally made a convincing close above this Monthly Resistance with a huge bullish marubozu candle. Since then we’ve seen price come back down to retest our M.As after printing a tweezer top rejection of the Weekly Resistance level.
More recently, an bullish engulfing combined with a hammer candle has now sent this pair up and beyond 1.2400 – the next major Monthly Resistance level. Looking at the monthly chart – I can’t see any reason which would make me believe this momentum will stop anytime soon.
Here we can see more clearly the rejection of the Weekly Resistance level after breaking out of the nearly 1000 pip range. Its evident that price was just edging lower to retest the level of 1.1600 – Resistance turned Support (as shown above).
Since then price has been continuously piercing through our M.As before continuing its upward ascent. We can now use this data and scale even lower to the Daily TF, all while keeping in mind we’ve arrived at our next Monthly Resistance level – meaning we will usually see some sort of reaction.
As usual – as we’re continuing to scale down, all while using the momentum/bias from the higher TFs – we can see more clarity on the charts. From this perspective, we see that price has been moving very systematically up to the 1.2400 level. Using basic Support + Resistance points as platforms to being the next moves.
As expected – price has reacted to the 1.2400 level with multiple shooting stars. While this may be natural P.A as buyers leave some of their positions, I’d urge you to be careful.
As I’m sure you’re aware – the currency market is one of the most manipulated markets in the world. Banks and high-end institutions will bait sellers into the markets by any means possible to accumulate stop pools to help fuel the next bullish move. I won’t be be consider selling this pair if P.A remains above 1.2300. At the time of typing this, the daily TF on the EU is currently showing what looks like a tweezer bottom rejection from our faster M.A – this could be key.
Intraday – H2
And here is the trade that I’ve just entered this morning after the 10:00AM GMT candle close.
Reason for entry:
- Monthly + Weekly + Daily M.As crossed to the upside.
- 61.8% Fibonacci Double Bottom Rejection
- C.T.L break + M.A Cross
- Break above 1.2400
Targets set at the 1.27 Fib D extension level. Great risk:reward.
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