Tuesday, February 11, 2014

Watch the trendline (EURUSD)

The pair broke out of the channel displayed in the previous post. I'm still sitting short with my stop untouched at 1.371. I will be watching very closely whether we will break the trend line into the channel again or bounce from the trend line and find support. Depending on the outcome I will do one of the following.

If we were to enter the channel again I would consider this move as a head fake which would mean that we are looking much lower than the bottom of the channel, probably aiming for sub 1.33 and I will stay short until I find a proper target.

If we were to bounce on the trend line and enter the 1.368 area again I would have to suck it up and cover my short since It is likely that we target the long term monthly trend line above 1.38 which would be my next place to short.

Since I'm fundamentally negative towards EUR I will not long this pair for a longer hold. Here's the chart again with direction line pointing down which was posted earlier.

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