Two weeks ago, we spoke about the ten straight bearish daily candles in EUR/USD being the longest consecutive run of daily losses since 1999.
In the charts highlighted in that blog post, the daily being at the bottom of that massive green range was key. With a higher time frame level like that, buyers are sure to put up at least some sort of fight and a bounce was therefore expected.
I’ll leave you to look at the EUR/USD daily chart on your own MT4 charts, but price didn’t quite hit our support zone. We can see that price did get a small bounce, but the key now is following the Italian referendum no vote, price lurched down on the open back into our support zone.
This was the touch that the buyers needed and as you can see on the 15 minute chart below, price continued to rip higher throughout the day and the scenario played out.
How often do we see the initial move on these sorts of news releases completely reversed by the end of the trading day (Trump anyone?)? Definitely another one of those ‘new normals’ that are sometimes hard to explain.
That’s markets for you!
Looking forward and the key level approaching is the previous pre-Trump swing low that we will look at the possibility of acting as resistance.
We’ll be watching to see what price does at this next obvious level of resistance, but just keep in mind that price has bounced off weekly support so while we should see some sort of pause, an intraday swing low isn’t going to act as a brick wall.
Just keep that in mind and wait for confirmation if you’re waiting to sell in the direction of the weekly trend seen here:
There is no need to rush this trade. It’s going to give you an opportunity to get short again. Just be patient.
Do you see opportunity trading EUR/USD? Trade forex with leading Australian forex broker, Vantage FX.
Dane Williams – @VantageFX
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