The expected upswing did not happen, and the pair broke through support at 1.3100 this morning. My long positions were stopped out. Likely to see a retest of 1.3000 now, but I don’t have a signal yet that would allow me to go short.
The daily 100-period moving average (MA100) was touched this morning one more time and price rebounded sharply leaving a huge bullish kangarootail behind on the hourly chart. I added another long position at 1.3159 after the double close above the hourly EMA10, one of confirmation signals. Stop also at 1.3090. Expecting a very sharp rise into the end of the week now, with very few corrections along the way.
The drop to the daily MA100 occurred and I went long again on its rebound at 1.3150. Stop at 1.3090, 20 points below the MA100. Expecting a sharp recovery back to 1.32 and above, leaving a kangarootail that “kisses the MA100 good bye”. There is of course the potential for more downside, but setups like this are profitable since they allow a very tight stop.
Closed my long position on a sustained close below the MA100, my exit signal. Another convergence of moving averages is forming, but price stays below the EMA10, and a sudden collapse towards the daily MA100 at 1.3115 is possible, especially since the pair has pushed higher for days without a major correction. Support would come in at around 1.3140.
Final probe to the downside last night was met with renewed buying interest at 1.3160 and the pair is now pushing resistance at 1.3260 again. I went long again at 1.3255 triggered by another moving average convergence and bullish closes above the EMA10. Stop at 1.3135.
Hourly close below the MA100 forced me to exit my long for a 20 point loss. Another convergence of moving averages may form in the short term and allow reentry. But for now my plan requires me to get out. If it’s one thing that I have finally learned over the many years of trading it is discipline – a strict adherence to ones plan.
EURUSD continues to push upwards. Strong move at the European opening last night could not be maintained though, but price found support at 1.32 in early morning NY trading and has stayed above the hourly EMA10 since then and RSI is >50 (signs that price action still favors the upside). I expect a move back above 1.3250 over the next few hours and a strong high close at the end of the week. Stop still at 1.3085, will move it up on a break-above-close-above 1.3562.
I’m back! Been refining my trading plan lately and will post an update over the coming weeks.
My favorite pair, EURUSD, looks VERY bullish today, and I’m net-long at 1.3215. Lots of bullish signs have been building over the last few days, the hourly and daily charts are full of very strong kangarootails that have drawn a line in the sand at 1.3000.
However, these are only secondary indicators to me. The main reason I believe we’re about to witness a very large bullish move in this pair is the convergence of lower and higher time frame moving averages, a strategy I’ve been investigating, refining, and back testing over the last 2 years. The 100 period MA and the 10 and 20 period EMAs have been converging in almost all time frames lately, and this is a fairly reliable signal that a major move is about to happen. Whenever that happens I’m carefully watching the price movement relative to these averages along with secondary indicators like RSI and kangarootails, and closes above moving averages and above previous peaks (break-above-close-above’s). All of those are bullish right now, and we may be hours from a strong break to the upside with very strong legs. 1.4000 a straight move up to 1.40 is not that unlikely.
1.3165 is key support, and a sustained break below may bring 1.30 back under attack. If 1.30 falls we’re likely going lower and will retest 1.2620.
1.3275 is first resistance, but it’s close and a good strong momentum move may power through that level and into the 1.33′s where some falling trend line resistance comes in.
My long was exited earlier today on the close below the hourly MA100 for a 10 point loss. Break above hourly structure high last night could not be sustained, and triggered the exit.
Bullish consolidation above the daily EMA10, and bullish convergence of hourly moving averages caused me to go long again. The daily RSI has corrected back to 50 and bounced, and hourly RSI has found support as well. Price is staying above the 38.2% retracement of the 1.3696-1.4157 range, and has closed above the hourly EMA10 two hours in a row after leaving a kanagaroo tail on a failure to break below the 38.2% retracement level at 1.3872. Lots of indicators that suggest more upside is to come.
My stop is below the kangarootail, at 1.3839, and the target is open (will close the trade on an hourly close below the hourly MA100, but only after an hourly close above 1.4049, otherwise the stop will limit my risk.)