Direct from the desk of Dane Williams,
exclusive to leofinance.io
Key Takeaways:
- EUR/USD forms indecision candle at daily resistance.
- Potentially a lower high if price properly rejects.
- Bias remains to trade EUR/USD from the short side.
EUR/USD Technical Analysis
After EUR/USD formed a double top just below daily resistance, we spoke about aggressively shorting the pair before it got to daily resistance.
Unfortunately for those that attacked the pair aggressively, price ended up smashing higher until printing somewhat of a daily gravestone doji at resistance.
Well as close to a gravestone doji as we need to have gotten...
Do you remember the indecision candle and doji section of my trading strategy?
Here's a relevant excerpt:
"You’re never going to get that clean, textbook candle, so stop worrying about it. If they look the same, then they are the same."
With that in mind, take a look at the candle and most importantly where the candle has formed, on the EUR/USD daily chart below.
EUR/USD Daily:
If it looks like a duck, quacks like a duck, then it's a duck.
As a bearish indecision candle that's been printed at resistance, make no mistake that this is a duck.
Now let's zoom in and take a look at the intraday price action on the EUR/USD hourly chart and see if we can find an entry, shall we?
EUR/USD Hourly:
While price hasn't pushed below the daily resistance to confirm that it has in fact held, that daily candle is enough for me to like shorts here.
In my eyes, printing that indecision candle at daily resistance shows that the zone is at least being respected and if we get short here, the worst case scenario is probably some sideways price action.
Whether that's enough to milk at least a 1:3 trade from the setup, only time will tell.
But I'm happy to be short the market here with our risk clearly defined just above the zone.
By getting in this early, there might be opportunity to add into our position and truly hit a home run if the USD side of the pair regains some strength.
Okay, let's not get too far ahead of ourselves just yet.
Best of probabilities to you.
Data to Watch Next Week:
- Monetary Policy Statement (EUR)
- ECB Press Conference (EUR)
- French Flash Services PMI (EUR)
- German Flash Manufacturing PMI (EUR)
- German Flash Services PMI (EUR)
Why not leave a comment and share a chart of your own in the comments section below? All comments that add something to the discussion will be upvoted.
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