EURUSD bulls are starting to look tired following last week’s rejection from 1.2040. Sellers even signaled their intent on Friday with a small yet significant bearish pin bar.
Yesterday’s session encountered buying pressure right where we’d expect. The 1.1875 area capped the early August advance in concert with ascending channel resistance. It also helped support prices in late August and early September.
As long as this channel is intact, the uptrend that began in April must be respected. However, this week’s price action is cause for concern if you’re bullish the EURUSD.
Yes, 1.1875 support is still holding and sellers have yet to test the channel floor. With that said, the single currency is beginning to struggle to make higher highs. It’s also not far away from testing the current September low at 1.1849.
I do have a small short position on from last week’s spike above the 1.2040 handle. I’ll consider adding to the position if sellers can secure a daily close (5 pm EST) below channel support near 1.1830/50.
We may see a bounce higher given yesterday’s retest of key support at 1.1875. But all in all, my bullish take on this year’s price action is starting to wane, as is the bullish momentum.
A daily close below channel support near 1.1830/50 would expose the next key support at 1.1670. A break there would open the door to a move toward 1.1490 followed by 1.1300.
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Justin,
Why are you not using Heiken Ashi to trade Forex ?
Could you maybe write an article on this or is this not an option for you ?
There have been quite a few rallies in the EURUSD last few months during the uptrend which could have been nicely traded with Heiken Ashi , they provided some good wel defined entries.
Rob, I like to keep my charts clean and I don’t have a need for it. I found a long time ago that raw price action is all I need. Everything else is just noise as far as I’m concerned.
That is interesting that you have short position. Its was against trend.Would be good to know when to have positions againt trend. Most often I hear its bad to trade against trend.
There’s no way for me to define all circumstances when it’s okay to trade against the trend. Every situation is different. It also depends on your style of trading and the rules you’ve outlined for yourself.
nice