Good day traders!
The chart below shows us a recent euro dollar move that saw a correction of more than 300 pips. There was divergence on the MACD on the 1 hour chart. The channel saw the price moving up whilst the MACD was pointing down. This divergence signal to us that there could be an impending break of thee channel to the downside.
As the above chart shows, the price did break the channel and the price went spiral down in 3 waves. I believe that this current move down is a correction before price heads higher to around 1.345 to 1.35 level if we look at the daily chart below. We see a down trend channel on the daily chart and that yesterdays close was well above the 20 and 50 EMA signalling that the market might use the EMAs as support to go even higher.
The chart above tells us that the euro dollar is still in its down trend and things have not changed yet unless we see the pair going above the 1.36 level and staying above that level. At this moment, we might be seeing a wave 5, impulsive wave that might bring us to the 1.34 and 1.35 level mark.
Take note however that the EMA 150 and EMA 100 could offer some strong resistance to the pair as it makes it corrective climb.
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