27 Oct EUR USD Fibonacci Confluence Should Offer Resistance for Swing Short
EUR:USD has finally achieved the zone where I’ve been planning a short entry. Unfortunately it has achieved this level with a huge bullish daily candle and therefore unless you are really aggressive I would suggest it’s too early to start jumping into swing shorts just yet.
That said, I am short! I shorted the 76.4% Fibonacci retrace, a level often recognised by EUR:USD and the only pair I use the 76.4% on. So far price has been rejected from this level. Despite that, I expect further tests of this area before price retraces and therefore will probably take profits on my short tonight and re-enter it intraday multiple times snatching a few points here and there until I feel it’s ready to hold onto for a more sustained retrace.
The Fib confluence area combines the 76.4% and 61.8% retraces from 2 separate swing high’s as shown in the chart below.
There is another confluence area which combines with horizontal support in the 1.4030 level. I would therefore be quite confident that 1.4030 will eventually be retested, not sure if the retrace will start here or higher up, but I’m fairly sure a visit back to 1.4030 area will take place.
This chart may look a little messy due to the various annotations including 2 separate Fibonacci areas taken from 2 separate swing highs both combining at the October 2011 swing low, but these are levels that Technical Traders will take note of and once the current Euro Saved Again Euphoria is over with, we can get back to business and make the most out of the swings that await us.
If price climbs beyond the down trend line shown in the chart, then I will scrap the whole retrace idea.