EUR/USD Daily analysis - End of the trading week.
The week is over, I hope you all had a good one. There were some nice moves in there that I hope you were able to take advantage of. There will always be more trades out there. Stay the course and stick to your rules.
On the weekly, it seems like price may actually break that 21 EMA this time around. MACD and Stochastics are still down, and they both have a long way to go before becoming oversold.
On the Daily we are definitely pointed down. We are still in the major consolidation that began in March between 1.6000 and 1.5385. The 5/8 is wide open to the downside, with MACD in full support. The 21/55 has lost and is continuing to lose angle and separation, it looks like it may cross in the next few candles.
On the 4 hour the MACD is looking kinda wimpy to the downside. Not only is it wimpy, we have a very nice example of histogram divergence here. Divergence does not necessarily point to reversal, but it does point to retracement. We seem to be having trouble with the 1.5543 area which of course is lining up with the weekly 21. Stochastics is at the bottom of the trade zone. This will be the first indicator on the 4 hour chart we will see turn if we are going to enter a retracement. 1.5716 is the 38.2% retracement level for the recent move down. If we retrace, between that area and 1.5770 would be an area that would make sense to send price back down again. The Bollinger bands are tightening on this timeframe as well.
On the 1 hour the 21 EMA is in control of the move down currently. If we are going to retrace here, that level will have to be broken. Stochastics and MACD are still pointed down at this point, so I will be watching for them to turn to the upside possibly. Bollinger bands are looking tight here as well.
My overall bias here is still short. However, I expect a retracement at some point. Divergence is easy to see, but figuring out exactly WHEN a retracement will come is another thing. The best I can do is line it up with an area that is showing support or resistance and simply do what my indicators tell me. Besides, if we are short, we want to sell high right? What do we need to sell high? A retracement! This is exactly what I want.
Have a great weekend everyone!
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