22 Jan EUR USD Follow Up For New Swing Long; 22nd January 2013
Following on from previous EUR USD analysis posted on this site over the last few Weeks, I’ve finally decided that I’ve spent too long waiting and missing desired entries!
The first ideal entry was 1.3000 and I missed that when it rallied 200 points within the couple of hours I was away from the screen.
The 2nd ideal entry was targeted at a pull back to the 1.3290 region and price has been testing that level quite a bit over the last few days, yet I’d still not managed to be at the screen at the right time, and I’m not normally one for using limit orders as I prefer to enter the trade live at the screen.
So, looking at the chart now it’s not clearly obvious as to which direction price will break from the current levels, but there are some nice technical patterns in play that should enable a sharp exit quite quickly if things start to deteriorate. In the case of this trade, the simple clarity for stop loss placement is more important to me than the eventual market direction simply because the potential loss is small compared to the potential gain if the trade does play in my favour.
Here’s a couple of simple charts to determine where we are now and what is going on technically:
The hourly chart shows 1.3290 area of support and a small triangle formation developing with higher lows and lower highs. Almost a bull flag. Price could potentially break in either direction, but a Daily close below the base of the triangle would probably signal a failure for bulls, although fake-outs are common:
The Daily chart shows a rally commencing from quite strong positive MACD divergence, and a potentially bearish negative MACD formation taking place right now. However, as far as I’m concerned it’s not bearish because although MACD is printing lower highs, it’s also printing higher lows.
1.3465 does seem a likely upside target here:
I didn’t quite get to enter my trade at the desired level of 1.3290, but even here at 1.3315 I felt it was still worth a go and it’ll be interesting to see how the next day or 2 pan out.