EURUSD - Bears may get a BIG WEDGIE!
Last Friday’s (4/7/2017) non-farm payrolls (March) were anticipated to be much lower than February, and due to this foreknowledge the bears did not hesitate to re-open their short positions. This was confirmed by two extremely bearish candles that closed on the 4H chart at 5AM and 9AM Friday morning. We witnessed a very immediate and quite dramatic continuation of the previous downtrend that has been going strong since the start of the US session on March 28th.
The consolidation leading up to Friday’s news release may have been our first indication that bearish momentum was slowing down click the link for my analysis on the NFP consolidation(. The second indication that a major reversal could be imminent just recently occurred. Price stopped moving south after penetrating 1.057 and on Monday at the 9AM a Bullish engulfing candle closed at twice the length of the previous price range 1.057-1.059.
Currently price is breaching previous support levels, which is now acting as resistance. I am personally looking for entries to go long between 1.059-1.06. I would be exiting this trade potentially around the previous consolidation resistance level, which should still be active. The resistance level (1.0655-1.067), should it hold would create a very basic wedge pattern.
Another option would be to wait for price to top out at previous resistance levels, as discussed above, look for a strong reversal candle(s) to close within the 1.0655-1.067 range and then SELL with targets placed @ 1.057ish.
Stay confident in your position, follow your trading strategy and believe in yourself!
TL;DR – Basic WEDGE pattern formation very possible. Looking for LONG entries btw 1.059-1.06, and exits at our previous weeks resistance level of 1.0655-1.067.
Need to wait it out- look for a strong reversal candle(s) to close within the 1.0655-1.067 range and then SELL with targets placed @ 1.057ish.
The consolidation leading up to Friday’s news release may have been our first indication that bearish momentum was slowing down click the link for my analysis on the NFP consolidation(. The second indication that a major reversal could be imminent just recently occurred. Price stopped moving south after penetrating 1.057 and on Monday at the 9AM a Bullish engulfing candle closed at twice the length of the previous price range 1.057-1.059.
Currently price is breaching previous support levels, which is now acting as resistance. I am personally looking for entries to go long between 1.059-1.06. I would be exiting this trade potentially around the previous consolidation resistance level, which should still be active. The resistance level (1.0655-1.067), should it hold would create a very basic wedge pattern.
Another option would be to wait for price to top out at previous resistance levels, as discussed above, look for a strong reversal candle(s) to close within the 1.0655-1.067 range and then SELL with targets placed @ 1.057ish.
Stay confident in your position, follow your trading strategy and believe in yourself!
TL;DR – Basic WEDGE pattern formation very possible. Looking for LONG entries btw 1.059-1.06, and exits at our previous weeks resistance level of 1.0655-1.067.
Need to wait it out- look for a strong reversal candle(s) to close within the 1.0655-1.067 range and then SELL with targets placed @ 1.057ish.
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Price was choppy there for a bit, but in the end the wedge was formed as predicted. I do not believe the short term up trend is over just yet, so if you are watching EURUSD look for a second reversal signal - this would be a BULLISH move/reversal candle that fails to break the 1.066 area.