Good morning traders. I trust you had a good weekend and are raring to go for the new week. For my part I had a bit of a head on Saturday after the wedding I mentioned on Friday but sorted that out in good order with a long walk with the dogs and a heavy session in the gym.
There´s nothing like a grinding out rep after rep to get rid of any lingering effects of one too many shandies !!
Anyway enough of that – lets take look at whats in store this week.
As we mentioned last week our working premise was for higher prices in the instrument and that’s exactly what we got. The price action on the daily chart kicked off last week at around the 1.1620 level and we peaked at 1.18 on Friday so depending on how you trade there was a solid 150 – 180 ish pips to be had on the upside.
EURUSD Daily Chart
Looking at the Daily chart above for this week I suspect we will be in for more of the same. We have an inverted Head & Shoulders and if we take the distance from the head to the neck line and measure the same from the right neck line break we have a target of roughly 1.2150 to 2180. Of course not all H&S patterns work out and I only use them for confluence and as secondary to my price action analysis using horizontal and diagonal levels.
Nevertheless it gives us a good indication that price has some upside left. I´ll initially be looking for targets at 1.1850 and 1.1950 ish which offer good levels and some fib confluence as well. If we remain bullish we may get up further but I´ll let price unfold first to get a clearer view.
As ever if I see some bearishness kick in I will be quick to change my mind! By the way this should not be interpreted as “flip flopping” or “indecisiveness” more as rational thinking in relation to what unfolds. We always have to have a plan but if things change we should never be so intransigent as to not be able to change our minds (paraphrasing Winston Churchill).
I´ll keep you posted.
EURUSD Hourly Chart
Looking at the Hourly chart the most striking aspect is that the diagonal trendline we were tracking all last week is still in play. Consequently any move back down to this level should be watched carefully for it either to act as a continued springboard higher or for a significant break and retest to the downside. For a significant break I will be keeping an eye on the 4H chart.
We also have a nice channel formed with the lower level being the TL mentioned so any move up to the top of the channel should be managed depending on whether you are already long (in which case it may be a good point to take some profit) or to consider taking an intraday short.
To kick off Monday I´ll be watching the Sunday night open and price action early in the London session to get an initial steer.
Tight lines traders and lets have a great week.
Please note: All opinions expressed above are from the author and not necessarily shared by The Armchair Trader. All financial investments involve an element of risk. The value of your investment may fall as well as rise and you may get back less than your initial investment. With Spread bets and CFDs your losses may exceed your deposits.