EUR/USD Daily Update, September 20, 2011
Good morning,
today is an eve of 2-days FOMC meeting, so market could be a bit lazy today due to result of meeting expectations.
Still, on daily time frame our B&B trade has reached the target. Now we are shifting to another part of our medium term trading plan.
Our major question is "will market show any respect to monthly K-Area, weekly Agreement and weekly oversold?"
1. Yes. In this case we will see some reversal pattern on daily frame - Butterfly "Buy" 3-Drive, H&S or something. Target - deeper retracement (at least 0.618) on daily time frame.
2. No. - In this case we will see strong acceleration to the downside and will have to search for other possibilities.
But we could understand that only after meeting, I suppose.
On intraday charts market has some chances to fill the gap, but they are more psychological rather than technical. The point is that on FOREX gaps extremely rare hold for long time or even unfilled. Current market has hit 1.618 target and 0.786 Fib support. Theoretically it can show some retracement up.
If so, on hourly chart we see K-Area near weekly pivot point 1.3710-1.3735 and AB-CD target inside it at 1.3719. If market will show some spike there and reach pivot - then gap will be filled.
But again, I do not see clear patterns currently that appoint on the solid probability of such move (may be Double Bottom on hourly chart, but it looks blur). So to take that trade or not - is up to you.