EURUSD: Avoid The Middle, Wait For One Of These Levels.

EURUSD update: This market is in a clearly defined range between the 1.2150 low and 1.2550 high while the big picture is still bullish. Traders often put too much weight on fundamentals while participating on the smaller time frames and this is a mistake. Short term ranges like this one offer day trade and swing trade opportunities both long and short. The key is having profit expectations that are in line with the technical structure of the market.

As you can see, price fell out of the 1.2379 to 1.2410 resistance zone (.618 of recent bearish swing) upon the formation of a bearish pin bar. This should be not surprise. Since I am not short at the moment, the best I can do is wait for another setup. This can unfold upon a retest of the resistance zone again (all depends on price action in the zone). Or I can wait for a long setup within or just below the 1.2268 to 1.2220 area (.618 of recent bullish structure). 1.2181 is the reversal zone boundary which offers the most attractive area for a swing trade on the long side.

Keep in mind, considering the context of the bigger picture, swing trade longs have more potential than shorts. It is this context that should govern your profit target choices. Based on the big picture (you can see the my Elliott Wave chart on S.C.) this market is poised to go higher. As long as the wave counts stay intact, I will continue to expect more from longs. A bullish break out of this broad consolidation can take this market back toward the 1.3000 area over a number of months.