by Johan Kriek (jkriek@fxinstructor.com)

The analysis below is based on the Probability Study Technique:

If we have a look at the chart above, we can clearly see that on a daily chart we have lower peaks and higher lows. If we connect these pivots, then a triangular formation can be seen

Please note that this particular triangle on the EUR daily does not carry any significance other than the upper resistance line where price has now bounced. We cannot call a possible breakout direction due to the fact that the preceding trend is much smaller than this triangle and it is not symmetric

Nevertheless, the resistance line of this triangle proved to be major resistance and therefore I will honor this

On the above daily chart we can see how the bullish current trend cycle within the major trend has come to a screeching halt at the triangle’s upper resistance line

Here I have identified the most active cycles within the current trend on a 4hr chart. We can see that the most active cycle here is indeed bullish, suggesting a bullish probability for today but that major trend resistance line must be violated first, otherwise we might be buying at the top

On the 1hr chart above the latest 60minute trend has been identified based on the previous chart’s most active bullish cycle. We have a beautiful bullish 60minute trend but as we can see, price has already found resistance at the major trend resistance line. Also, if we did not have this major trend resistance line, I would have been more than happy to execute my trading system within this beautiful bullish probability/60minute trend

On this chart I have identified the exact support and resistance levels to watch and also inserted an exponential stochastic which will indicate where market rhythm is trending

Major trend resistance: 1.4250

- This needs to be violated first before I take any longs as price can bounce here and come back with a vengeance

60minute trend support: 1.4160

- The 60minute trend support resides at 1.4160. This means that if 4160 is taken out, the bullish 60minute trend would have been violated and all of a sudden we will have a BEARISH PROBABILITY. I’ll keep an eye on this one (grin)

CONCLUSION:

We have a no trade zone because of that huge triangular resistance, otherwise I would have traded this one long. If price bounces here and moves as low to violate the 60minute trend I will start shorting. On the other hand, I will continue long if 4250 is violated

Have a nice day

Johan