22 May Mid Week Euro Observations; EUR:USD And EUR:AUD
A quick post to show a couple of things I’m watching with interest relative to the Euro.
The Weekly chart established a trend line within a Year of the Euro’s launch. Now that trend line is being tested and although other time frames suggest it’s going lower, it would be worthwhile watching this level carefully. A break here could accelerate some significant downside, whilst support would offer a cautious buying opportunity allowing for very tight stops based on a Weekly close beneath the trend line:
You will probably well know that I’ve been following this Box Trade set-up for some time now. If it’s going to play out, then now is the time to have a watchful eye over it:
In the short term I will be watching this hourly Fibonacci retrace, if price cannot gain traction above the 61.8% Fib level, then this could be the start of the next leg down we’ve waited so long for. It’s good that the 61.8% retrace here coincides with the low of the huge bearish engulfing candle from the highs, those highs having filled a gap from a previous gap down on 1st April 2012. That level should encourage selling, if it doesn’t, be cautious taking short positions.
Worth noting that if you are a trader who takes note of gaps, there’s another gap much higher up from November 2011. I can’t see a rally taking us to those levels, but it’s another thing to bear in mind.
If I take any positions on either of these set-ups, I’ll post details in the comments section and update the trades log.