Morning guys,
When Stag said that it might be reversal right near the corner, I've taken a look at EUR with more crutiny and found one thing that I do not like right now.
At first glance, if you will take a look at EUR chart - everything stands as we've suggested recently. Market has moved slightly lower, OP target stands ahead and no visible support levels exist, except may be WPS1. And now watch this -
This is December contract of Dollar Index. OP target already has been hit and market has shown W&R of tops . So, the scenario that we would like to see on EUR is already completed at DXY. In this circumstances, I do not want deal with EUR for few session, at least until this divergence exists and would better focus on something else.
For example, today we could get B&B daily setup on GBP. I already have talked about it 2 days ago. Despite that our XOP target has not been hit yet, GBP shows strong upside retracement. Recall that our Agreement area around OP has been broken without respect. It means that market tends to re-test it from the opposite side. Also this is 3/8 major Fib resistance. Theoretically B&B should start somewhere around it. Another attractive moment here is XOP. It's really big chances that B&B will not stop at its minimal target, but proceed to XOP.
On 4 H chart our minor XOP has been hit and then upside channel breakout has happened. Daily Fib level also is K-area on 4H chart:
1H chart shows multiple target around 1.29 area. They are 1.618 Butterfly AB=CD pattern and 1.618 of smaller AB-CD. So, 1.2880-1.29 will be nice resistance cluster where downside action could start.
Since we have strong upside action and it is not very comfortable to sell. WE could drop our time frame to 15-min chart after completion of all these targets and watch for bearish reversal pattern, or even more - wait for starting of downside action and then try to catch some bearish continuation pattern, such as "222" Sell'.