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I know… I know… some of you will say its to soon to say the market is on its way for a large retracement phase, but I think it will… take a look at the following chart:
That triangle is gone… usually triangles break in direction of the trend, but this wasn’t the case, it broke against it… Now, if you pay close attention there also another formation there… A double bottom (validated with the break of the main resistance line). So, from my point of view, this would be the start of a retracement phase, being 1.3346 our first target. Only time will tell…
We have several currency pairs in the same scenario, including: USDCHF, GBPUSD, GBPJPY, EURJPY, AUDUSD and USDCAD.
Good luck in your week!
Regards,
RL
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It is well known that the Euro/dolar is in a downtrend since early August. This triangles tend to be continuation patterns, thus breaking in direction of the long term trend is what we should expect.
Luckily this one wasn’t the exception 
¿Where should is the best place to set our take profit orders?
What I would do here is watch closely what happens around 1.2337 (previous low), I need to make sure it doesn’t create a double bottom, if I see the market retracing back at that level, the best thing to do is close that trade. But if we see a break out, then it could go further down, probably around 1.2000, its next psychological support level.
Cheers!
RL
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As I pointed out in my last post, if the Euro broke the 1.2980 for the upside, it was likely to reach 1.3350… guess what, we missed our target for 50 pips, its highest point was 1.3297, anyway I hope you profit from that break out.
Now the conditions have changed a bit, it is trading below 1.2673 and entered the sell zone. So I will start looking for a short opportunity in the EURUSD targeting the bottom of the range 1.2360sh (blue rectangle). Be careful though, if the market trades again above 1.2673 all shorts must be closed and start looking for long opportunities.
Have a nice week!
RL
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Now that the FED has cut interest rates to 1%, and the market digested that information calmly, we are free to resume our trading (I was thinking, if the FED didn’t cut by half a point ‘as expected’, we were going to see how volatile the market could turn, but that didn’t happen so I’m going to stop writing about it :)).
Anyways, this is what I think the Euro could behave in the following days:
Euro analysis
If the market breaks 1.2980 for the upside, it is likely to continue its way up to 1.3350, but if it bounces back, a range is more likely.
Good luck!
RL
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Today most pairs are expected to trade in a tight range, why expected? Because its how they have been trading in the last couple of days. After the sharp moves we saw earlier last week they need to take a rest!
So, for most of them we will be trying to play de range, buying near the bottom of the range or going short at the top of the range. And obviously, all take profit orders will be placed at the opposite extreme (nothing more).
Here is the expected range in the Aussie
Aussie analysis
Green lines are short term support and resistance lines. Blue lines are long term S&R levels.
Good luck to you all!
RL