TraderBob
I beg to differ. I went back to Pesavento&Jouflas's book, 'Trade what you see', and it doesn't look like what you are referring to on H1 satisfies the structural characteristics laid out on pages 83-84.
So I would argue we don't have a 3-drive sell pattern on H1. I expect the market to retrace back up towards the 3450/60 levels where on H1 we have a nice confluence zone of fib levels (two 70.7% ([3146-4248], [3556-3212]) bracketing one 61.8% [3614-3212], and one 23.6% [4248-3212]) and DiNapoli target level at 3463 (+ or -). That's one reason I was so surprised yesterday when the market didn't even graze those levels but turned around at 3444.
I also see on my H4 chart a daily resistance 2 (DR2) close to the aforementioned 61.8% retrace level.
Also, on H4 I see what could potentially be the beginning of the formation of the 2nd wing of a giant sell butterfly, the BC leg completed at retrace level of 88.6% and according to Harmonic Trading Vol. 1, the potential CD end point could be anywhere between 1.27 XA and 1.618 BC (please see attached chart).
But in the immediate term, the market is ranging and it looks like we might have a potential double bottom with bullish divergence on H4. I know, too early to tell, but I'll be looking for that buy signal.
We also have a nice floor at [3286-3300]. 3296 is 23.6% previous RSST from fib retrace of [3556-3212]. So if that support doesn't get breached conclusively, I'd put my money long.
Finally, is it my imagination or do we have an almost perfect inverse correlation between EURUSD and USDNOK? By the looks of USDNOK H4 and Daily, it would appear that the USD is poised for further downside in the short term. If that happens, then we are looking at the EUR strengthening. But that's very short term. Indicators on the daily are pointing lower. On H1, we might see a retrace up to the daily pivot but if that is not breached, then the downside might resume (USD down, I mean) in which case the EUR will have a good chance of hitting that 3460 area. Based on how price action develops on USDNOK, I would say in the next couple of hours we should have confirmation whether or not this is correct. (As I was rereading all this, USDNOK is getting very close to the daily pivot. 32 mins to go for the next hourly candle. If it bounces off back down that pivot line and fails to close above, dare I say the EUR long trade might be a good trade.)
Crossfingers, I am long EUR for a T/P @ 3450.
I have a bad feeling about this though. Maybe I shouldn't go long after all. But everyone is short, even my neighbor's dog! Shouldn't there be some short squeeze at some point?