11/07/08 11:26 am - EURUSD: Waiting for wedge breakout

The pair has formed a large wedge on the hourlies/dailes, which is generally a continuation pattern. Hourlies are currently rolling over again. A breakout to the downside of this wedge would validate the existing down trend. In that case, a retest of 1.2328 is very likely, and possibly a move to 1.2133 (Fibo50 of the all time range).

Alternatively, we may see a breakout to the upside, with 1.3250 the next target. A break above 1.3297 would indicate that a bottom at 1.2328 is in place.

Action Plan: Sidelined as long as price stays within the wedge. I set a short entry order at 1.2635, stop at 1.2875, target 1.2330.

Support: 1.2698 Fibo62    1.2665 L-10-31    1.2585 H-10-27

Resistance: 1.2812 Fibo50    1.2926 Fibo38    1.2985 HSpptRsst

RSI: Hrly: bearish, capped by decl. TL, Dly: supported by rising and decl. TL

Hourly Chart:

November 7, 2008 · Filed under EUR/USD

3 Comments »

  1. David Said,

    November 7, 2008 @ 12:05 pm

    Just a quick question. Do you take into account any potential whipsaw that we may see due to non farm payroll being released that could temporarily distort your charts? It looks like you set orders prior to NFP. Like to hear your thoughts on this.

    Thanks,
    David

  2. admin Said,

    November 7, 2008 @ 4:09 pm

    Whipsaws during NFP release were certainly a possibility, but I expected the market already priced in a big negative number, which seemed to be the case. I also kept my stop wide on this last short entry.
    In general, I like trading during news releases, those are often big and “real” moves with large volume. But you are absolutely right, there’s often a false knee-jerk move in one direction before the real move happens in the other direction. I’m either trying to trade during the news release and enter with a market order when I believe the real move is underway, or, if that’s not possible, I place my entry below a key level and use a wide stop.

  3. David Said,

    November 11, 2008 @ 11:57 am

    Thanks for the info Carsten!

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