EURUSD
There was a beautiful big head and shoulders top forming
here until the Dollar (DXY) fell out of its lower parallel, (see
DXY comment from yesterday to help time entry/exit in EUR),
meaning that the 2 month long corrective pattern it's been
hammering out had come to an abrupt end. DXY has quite a lot
further to fall and right now is just making a little counter-
rally before turning lower again -(should have another 15 pips
upside to 93.99 at a maximum) and falling at least another
1.5% from there, and potentially a full 3%. This means that,
although it's in our instincts to look for the short on a break
below 1.1780 (worth the short back to 1.1728, if
we do see it and this call is wrong...) it's actually more likely
that EUR rallies from here, firstly to 1.1871-1.1877 range
where it should get sold off again - and then if 1.1880 can be
beaten on the second attempt to breach it, it will signal that
DXY is declining the 3% and not just 1.5% close certainty. This
would force the EUR back to the highs centred around 1.20
where it will become a sell again with stop just above 1.21.
So it's a buy with stop just under 1.1780, only reversing
if this level is broken as above.
There was a beautiful big head and shoulders top forming
here until the Dollar (DXY) fell out of its lower parallel, (see
DXY comment from yesterday to help time entry/exit in EUR),
meaning that the 2 month long corrective pattern it's been
hammering out had come to an abrupt end. DXY has quite a lot
further to fall and right now is just making a little counter-
rally before turning lower again -(should have another 15 pips
upside to 93.99 at a maximum) and falling at least another
1.5% from there, and potentially a full 3%. This means that,
although it's in our instincts to look for the short on a break
below 1.1780 (worth the short back to 1.1728, if
we do see it and this call is wrong...) it's actually more likely
that EUR rallies from here, firstly to 1.1871-1.1877 range
where it should get sold off again - and then if 1.1880 can be
beaten on the second attempt to breach it, it will signal that
DXY is declining the 3% and not just 1.5% close certainty. This
would force the EUR back to the highs centred around 1.20
where it will become a sell again with stop just above 1.21.
So it's a buy with stop just under 1.1780, only reversing
if this level is broken as above.