by Johan Kriek (email@example.com)
-Â US ADPÂ employmentÂ reportÂ weaker than expected,Â Friday’s NFPÂ could follow suit
- Equities sell off across the board
- Eurozone Consumer Confidence
- Eurozone Business Climate
- Eurozone GDP
- BoE Rate Decision
If we look at the 4hr EUR chart above we can clearly see that the most active cycle within the bullish Major Trend (red lines) is bearish and this is known as the Current Trend (blue lines) according to the Probability Study Technique. The 1 hour analysis continues below…
Here we can see the cycle within the bearish Current Trend is bearish and this is known as the 60minute trend (green lines) and due to the fact that the 60minute trend is bearish, the direction of highest probability is bearish. I can also see how price violated the 60minute trend to the upside at some stage yesterday but the violation could not be confirmed and price went right back into the channel. The resistance line price to watch is 1.3630. If 1.3630 is taken out then it means that the 60minute trend would have been violated once again and this would mean that the bearish probability would be no more. Should market rhythm start trending lower, then the 1 hour stochastic would reflect that by crossing bearish and then only we would see a bearish trading condition and of course a nice bearish context to execute your trading system within.
In a nutshell, No Trade Zone within Bearish Probability
Have a look at the Broadening formation we can see on the 4hr GBP chart above. We are currently trading the cycles within this formation until the breakout occurs. Please note that when the breakout occurs, the breakout can be pretty volatile and far reaching. Interestingly enough, the bullish 60minute trend has been violated to the downside and therefore we have a bearish direction of highest probability all of a sudden. Look at the 60minute trend below:
No Trade Zone, Bearish Probability. A soon as the 1 hour stochastic crosses bearish and the cross is confirmed we will have confirmation that market rhythm is in fact trending lower which will provide us with ample shorting opportunities. Keep an eye onÂ the BoE rate announcement today as a significant cut could spark a vicious sell-off. Be warned
I hope you have a nice trading day and happy pip hunting to all!
If you are interested in learning more about the Probability Study Technique then book your seat at: http://www.fxinstructor.com/eng/courses/probability.php
Have a good one