The hourly chart showed bearish divergence, go and check that out on your own chart, however the 15 minute chart suggests a potential break out setup. We are currently trapped between those two horizontal levels (12485 – 12650). A break above 12650 can open up a move much higher and a break below 12485 can have the opposite effect.
If we look at my RSI indicator on the MetaTrader charts (find out more about this indicator here), particularly the top left chart, the daily chart, you will notice the bearish momentum on the RSI so until this trend is broken there could still be further movement down. I can accept further movement so long as we stay above 11150. On the bottom left (4-hour) and top right (1 hour) charts there are some older buy signals that are still valid from current levels.
Overall we are bullish above the 11150 that we have discussed for a while, the trend is still bullish and we had a decent day yesterday. Now we have slowed down and the market is deciding the next move. I went long from 11638 yesterday thinking this was the low and we would continue to move much higher from here. I think the fundamentals support a move higher but I would be surprised to see this swing back down to 11600 or 11500 and being trapped in a range even down as low as 11400.
Hands up to those who were smashed to pieces yesterday? [Me] When you consider that we have been trapped in a small-ish range for the last few days, you could be forgiven for having a short trade with a stop loss above the highs and/or a long trade with stop loss below the lows. If this was the case, then it’s likely you were taken out today.
I’m back from my holiday in Portugal and feeling good. Even whilst being over there, I could not resist placing some trades and keeping an eye on the market. So much for taking a break. I needed to chop a position because I have just noticed I broke my rule of not having more than 2 positions open on a single market. So I closed a EURUSD short. So my positions are pictured a bit further down.