Bulls gave us a good rise on Friday of last week, pushing the pair up over 150 pips from its 10-month low at 1.34483. I sat on the sidelines with the EUR/USD for most of the day Friday as no good shorting opportunity presented itself (and it would have had to been a really good signal).
Take a look at the 4-hour chart below - just glance at it. What direction is the trend? Don't look at any indicators, don't look at candlesticks, just look at the direction of the price action. If you said anything but down you need to check your eyeglasses prescription :).The pair is in a strong downtrend and I remain looking for selling opportunities. However, there is reason for caution. As Babyfaceodus (Nigeria) pointed out last night the weekly chart shows a wicked looking bullish doji. It is the kind of doji that will most likely give us a rise of some sort, but I'm not overly concerned about it because it is in the opposite direction of the trend. It is not unusual to see a variety ofbullish candlesticks in a strong downtrend (and vice-versa). For this one to stick we need a close above 1.3790 this week.
Daily Outlook: All that being said we are approaching a key resistance trend line on the 4-hour chart that has been tested numerous times since late January - and held every time. I will be looking for a candlestick reason to short in this area (currently 1.3700).
Trading Idea: Candlestick confirmation of short in area of falling trend resistance - currently around 1.3700. Short targets at 1.3675, 1.3645, 1.3610 and 1.3580. A sustained break to the upside of trend resistance likely opens up a bullish challenge of 1.3790. For the very aggressive the pair is currently testing resistance at 1.3650.
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