Euro Bears Riding Flag Pattern
PipHut | Jul 20, 2015 04:10AM ET
EUR/USD Daily Analysis: Long-term piphutters have heard me say the phrase "the fundamentals are baked into the charts." What I mean by this is that the events that drive the price - risk aversion, interest rates, emotions,etc. - show themselves in the technicals as trends. A different take on that is to "feel the fundamentals, see the technicals," and that "feeling" in the EUR/USD is the clear bearish trend we've been watching for the past year now.
We've seen a 4000 pip drop in the past 13 months, interrupted briefly by a bullish flag pattern that started in February (and can clearly be seen between the blue channel lines on the daily chart), but that flag pattern has begun to break to the downside, opening up a clear challenge to 1.05 in the coming weeks. While bounces are expected and can't be forecasted with 100% accuracy (even the weathermen seem to be wrong most of the time), we can set our limit orders in higher probability areas, which is what we are going to do today.
4h Chart
Our Preferred Trades*: We are placing a sell limit near the bottom of the broken flag pattern at 1.0920, SL at 1.0955 (35 pips), TP at 1.0820.
Long-term Trend Analysis Chart
Yesterday's EUR/USD SwingPRO Signal Result: Our long from Thursday, after missing our 100 pip take profit by 3 pips, was closed out at break even.
Today's SwingPRO Signal: See preferred trade above.
*CandlePRO: CandlePRO can be used in conjunction with our daily analysis and "our preferred trades." For example, if we prefer "going short" or "selling a rally," then we would look for bearish candlestick signals after a rally or near resistance levels. Alternatively, if we prefer "going long" or "buying a dip," then we would look for bullish candlestick signals on price drops or near support levels.
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