Direct from the desk of Dane Williams.
After using the USDX to preempt a move higher in EUR/USD on Tuesday, let's take a look at how the price action played out.
As we went over on Tuesday's blog linked in that opening paragraph, the USDX had already broken out to the downside.
Something we saw as a potential opportunity to look for a EUR/USD long if price looked like breaking through resistance.
All that matters here is the intraday price action around the higher time frame zone that we already have on our chart.
EUR/USD Hourly:
You can see the daily zone as the wide grey box that price broke through, before coming back to retest it on the hourly, this time as support.
With price now above the higher time frame zone, it confirms Tuesday's analysis and says we should be looking for an opportunity to long.
To do that, we look for short term areas of resistance that when retested as support, we can use to long off.
Exactly the hourly candle that we've drawn the white zone from.
This is the sort of setup where you could have got long anywhere and with no significant pullback, you would have made money no matter what.
But by integrating these intraday short term retests into our strategy for entries, we're giving ourselves clearly defined setups with high risk:reward.
Best of probabilities to you,
Dane.
FOREX BROKR | Hive Blog
Higher time frame market analysis.