by Johan Kriek (jkriek@fxinstructor.com)

Good morning fellow traders. Herewith a probability study of the EUR/USD. Please have a look at the charts below:

Here we have a daily chart. Interestingly enough, this bearish major trend indicated with the dotted lines has been violated to the upside. But instead of price coming back to confirm the violation by bouncing on previous violated support (now resistance), it actually moved right back into the channel of the major trend again:

The fact that market movement has been trending inside this channel again made me honor the peak at 1.3721 and use this peak to adjust the Major trend:

The most active cycle, indicated with the blue lines is still bullish and this is knwn as the Current trend according to the Probability Study technique:

I now reverted to a 4hr chart and we can also see how the bullish 60minute trend has been violated. This means that the direction of highest probability is bearish and I will now start identifying the new bearish 60minute trend:

Here we go:

(this is your new 60minute trend with resistance at 3580)

We can have a closer look at the new 60minute trend on a 1 hour chart. Remember we always identify if the underlying instrument is situated in a “trading condition” on this time frame as well

Clearly the 1 hour stochastic is bullish. For a trading condition to develop here we need this 1 hour stochastic to cross bearish just to indicate that market rhythm is trending South (in the direction of highest probability) in a sustainable fashion

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interesting thoughts:

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Below we can see the Head and Shoulders on the 1 hr chart has broken to the downside. It seems that price might be comding back to confirm the violation of the neckline

Hopefully we see a nice bounce at the neckline from below, followed by a stochastic cross..

There you go. The EUR is bearish today but we need to wait a bit for that trading condition to develop. If you have any comments or questions about the Probability Study technique, come and make a turn in the Live Trading Room here at FXinstructor. Alternatively you can email me as well

Have a good one!

Johan