Hi traders,
EUR/USD showing exhaustion. The RSI making a divergence, however, there was a strong bullish candle of Friday close. Here are two possible scenarios:
Scenario 1: On the daily chart, the red line above the candles is a strong resistance zone that has been built over the last months. I believe that it will hit the zone and reverse. My approach is not to call the absolute top, but I will wait until it breaks the moving average with a high momentum candle. Furthermore, there might be a possible trendline, but I usually draw a trendline when it touches at least three points. The reversal might happen next week, or in two weeks - keep an eye on this.
Scenario 2: The blue line is a flip zone. I expect a break soon and if it breaks with a high momentum candle, I will either enter the trade short or wait for the retest - depends how this chart develops.
Keep in mind to play this safe to avoid losses. There is always a possibility that the trend up continues regardless.
Thanks for reading :)
Ray
EUR/USD showing exhaustion. The RSI making a divergence, however, there was a strong bullish candle of Friday close. Here are two possible scenarios:
Scenario 1: On the daily chart, the red line above the candles is a strong resistance zone that has been built over the last months. I believe that it will hit the zone and reverse. My approach is not to call the absolute top, but I will wait until it breaks the moving average with a high momentum candle. Furthermore, there might be a possible trendline, but I usually draw a trendline when it touches at least three points. The reversal might happen next week, or in two weeks - keep an eye on this.
Scenario 2: The blue line is a flip zone. I expect a break soon and if it breaks with a high momentum candle, I will either enter the trade short or wait for the retest - depends how this chart develops.
Keep in mind to play this safe to avoid losses. There is always a possibility that the trend up continues regardless.
Thanks for reading :)
Ray