EUR/USD Daily Update, Fri 23, September 2011
Good morning,
On daily time frame market has reached 1.27 extension of our butterfly patern and shows some upward retracement. Still, currently I can't either confirm or deny that this retracement due buttefly. From one point of view this is upmove right from the target level of butterfly, but from another - the way how this move is developing is not so impressive.
So, personally I prefer to see some clear signs from the market before making a gudgement about future price move.
On 4 hour chart we see some kind of stop grabber, that potentially could lead price to new lows. Also if you will draw simple MACD you will see nice bullish divergence in that area.
Still this move up could be just respect of reaching AB-CD target. That's why I prefer to assess first the price action around 1.3590-1.3635 K-area. IF market will not be able to break it - then it probably will continue to 1.618 target of Butterfly. Also it will form "222" "Sell" pattern. In that case we will have to search possibilities to enter short.
IF it will break it to upside, then may be Butterfly really has started to work.
But if you want to Buy right from here due Butterfly pattern - you have to place stop below 1.618 extension of Butterfly.
Even if market will continue move down, and I will not catch it, I will not be upset, since it's not too far till 1.618 target of butterfly, but this will give me much safer possibility to enter long with tighter stop.
Anyway this was a really big week, so to make some rest during blurring environment on the market is what we have to do...
