Good morning traders. Following yesterday’s fairly contained price action we are left within the daily range boundaries as mentioned at the start of the week – see Daily chart below.
We can see that the top of this range around 1.1750 is still in tact and remains the initial target to the upside while the descending trendline shown on the chart has acted as a barrier with the price unable to close above on the Daily.
While this may be forming a descending wedge pattern I still favour longs at this point. But, as ever with trading its important to at all times keep an open mind and be ready to change bias should price action signal this to be the case.
EURUSD Daily Chart
Looking at the H1 chart if anyone took a counter trend short at the level 1.1720 I noted yesterday (see the 5m chart below) it would have paid out at least 50 pips.
However, the price remains contained to the downside by the ascending trendline forming an ascending bullish wedge so longs are still the favoured trades for today to at least take out the 1.1720 level.
Alternatively should price move down and form an hourly close below this trendline this may change my bias and I´ll be on the look out for intraday shorts. One thing to bear in mind is that Wednesdays and Thursdays have a greater than 50% of forming the high or the low of the week.
EURUSD Hourly Chart
To give you a feel for how I frame my set ups on the lower time frame 5m chart we can see that price came up to the 1.1720s twice during the day and formed a double top ( 1 & 2) before going on to form a retest reversal where price closed below point 2 at point 3.
The wicks also suggest that price was having difficulty going higher and such chart patterns can be used to take intraday scalp trades. I´ll cover more lower time frame scalp opportunities and set ups as they arise.
Good luck with your trading today and if you have any questions please feel free to leave a comment below and I´ll get back to you asap.
EURUSD 5 Minute Chart
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.