This the third day of my EUR analysis using linear regression channels and so far the game has played out picture perfect. Every divergence from the channel bands has been retraced in short order providing some great 90 minute trades. But, the real frosting on the cake, and I find this quite astounding, is how, regardless of the session, price continues to come back to the sweet little straddle channel (horizontal lines) defined by 1.3955 and 1.3975 that runs back to Oct 13 th (and beyond).
I mean, really, this is the stuff of conspiracy theories, but I’ll leave that to ZeroHedge to explore. We last looked at the EUR chart at 10:00 yesterday after drawing our Dipper channel and extending it into the first 90 minutes of trading. One lesson to be drawn from that chart which I neglected to mention yesterday was that with the Dipper channel down slope into the US market open, the high probability trade here was a fade of the FXE at the open. If you track the Dipper channel for a few days you’ll notice what a nice forecast it provides for trading the US market open.
Also of note, the Dipper channel commencing at 3:00 Thursday provided a solid baseline for 24 hours . . all the way to our new Dipper channel this morning. The current channel is up slope, but if you take a closer look you’ll also see price is bumping right up against that old lower straddle band at 1.3955. The fact that this ceiling has been effect for almost 2 hours suggests a change of character may be forming and reflects a clear level of uncertainty. So, as usual best to stand back and wait for the break, IMHO.
Finally some humor from my trading comrade in arms the Clueless Q Trader, a man who shares my hopes and burdens.
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