EUR/USD Daily Update, Fri 20, January 2012
Hi there,
On daily time frame market is approaching to K-resistance area 1.2980-1.2996 and pivot resistance 2. Also this is our 4-hour 1.618 Agreement area. Although market is not at overbought yet and context is strongly bullish - this is not the time to enter long, since odds suggest retracement.
Our major focus today is on 4-hour time frame.
Trend is strongly bullish, but trend is not so important. We have perfect context for DiNapoli either B&B "Buy" or DRPO "Sell" directional trades. The consequence is as follows:
1. Market should hit 1.618 target with no doubt before any retracement will start.
2. If market will reach 1.2884 at first penetration of green line (3x3 DMA) with 1-3 bars below DMA - then this is buy signal and hence B&B "Buy"
3. If market will show penetration of 3x3 DMA but will not reach this level, then will close above 3x3 and then below again - this will be DRPO "Sell" signal. This pattern could lead to deeper retracement, I suppose at least to 1.2827-1.2842 K-support level. Ulitmately market could even retest upward border of daily channel form another side.
4. We also can't exclude that it could be DRPO Failure. This is also bullish pattern.
So, today trading session is for DiNapoli Directionals, as I suppose...
On hourly chart you can see just a bit more detailed Fib work. Nothing really new to 4-hour chart.