EUR/USD Daily Update, Tue 15, March 2011
Good morning,
Yesterday market has not shown retracement down on intraday time frames, as I've expected, although it has tried to do that from 1.3950 area. Also, our B&B trade has reached the target.
Daily
Now situation on daily time frame very sophisticated. In short-term perspective, market is forming the stop grabber pattern. If it will confirm by close, then it assumes that lows at 1.3733 should be taken out by the price. It means that we could see another AB-CD retracement with target 1.3703.
In a bit longer perspective market could form 3-drive sell pattern that could start from 1.41 area. Furthermore, the appearance of AB=CD pattern will not cancel this possibility.
Another possible scenario on daily is a butterfly "Sell" that could start from the same target as 3-drive - 1.41. So what we should to do?
4-hour chart.
We can see that trend is bullish, just below the market pivot point and 3/8 support (that I've expected to be reached yesterday). If market will continue to drift higher from this level and will form some stop grabbers, then I will not enter on short side, till the previous highs at 1.3984 will not be taken out.
If instead market will turn trend bearish and move below pivot - then It makes sense to enter short with expectation of initial target at 1.3830.
1-hour chart
Here we can see that H&S is forming. This pattern closely links with 4-hour chart. Possibly if you're risky trader, you may try to anticipate it - buy it is very dangerous, H&S fails very often on hourly charts. Still, if on 4-hour chart market will turn trend bearish - then H&S should work. If not - then it will fail.
If it will work and you will enter in anticipation of its completion, then it will allow you to move your stop to b/e and even catch the possible move to 1.3703. Or at least to 1.3830...
P.S. by the way, the new part on FPA Forex Military School has been released:
Forex Military School - Forex Peace Army Forum