01 Feb
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.4200
Key G7 resistance levels: 1.3980/1.4000, 1.4020*, 1.4060, 1.4120
Counter-trend opportunities: 1.3850
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
The euro continues its slide down. I wouldn’t call it unrelenting, but it’s steady. Now that 1.4000 has been broken, and we’ve had a daily close below there, the price has reached the 61.8% extension at 1.3850. There won’t be an opportunity to sell today, but if we do reach 1.3850, there’s an excellent chance to try a small counter-trend long trade if we get a clear reversal pattern. Remember that counter-trend trading is riskier, and you should only attempt this with a small position and tight stops. The target for long trades is 1.3980/1.4000 where long trades should be closed while we watch and wait for signs of reversal back to short – to go with the main trend direction. We’ll see what it looks like if and when we get there. Interesting to note that last week’s bearish candle was completely “shaven” No wick on the bottom side. Sometimes that can lead to a dramatic
reversal.
Summary:
Perhaps try small counter-trend longs at 1.3850, target around 1.4000 (or earlier if it falters). Then watch and
wait for an opportunity to sell.
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