EUR/USD Daily Update, Tue 24, May 2011
Good morning,
although market is showing some bouncing from 1.40 area, it still unclear, does it do it due support, or here is some reversal potential also.
On daily chart we see triple support - Fib weekly Confluence, pivot support 1 and target of recent AB-CD. Also we see some attempts to go lower - below pivot support, but they have not been successful yet. Trend is bearish.
On 4-hour chart we see some kind of retesting trend line of ex-parallel channel, that we've discussed in weekly research. Trend is also bearish, but here is some allusion to MACD divergence.
The more important for us is hourly chart. Trend is bullish here. Yesterday we've pointed that there was DRPO Buy right at an area, that we've specified in weekly research - 1.40-1.4044. If you've followed our trading plan you probably have long position currenty. So, if you do - move your stop to b/e. My current position at 1.4013 and I move my stop to b/e. Why?
Because current move is blur. It could go and go, but it could be just AB-CD retracement of recent swing on hourly, who knows?
So, here is the conclusion:
1. IF you have long position - move stop to b/e and watch the movie. Our party will start if market will move above pivot. Only after that we can hope that probably this momentum trade has started;
2. If you're flat now - stay flat. It's too early to enter short and a bit late to enter Long
3. If you're bearish - watch for 1.4150-1.42 area. This could be just AB-CD retracement. If this is so - market should stop there and should not move above pivot. But If it will - do not enter short, because it could be point 1.