The FX Trader’s view – Bulls are on the alert after a recent potential reversal signal on the Weekly chart. But so far not enough has been done on the downside to fully persuade the bears, and the jury is still out, deliberating.
- WEEKLY CHART:
Recently there was a type of Key Reversal Week which, admittedly, could have been a clearer one as there was not the clear ‘higher high’ prior to the ‘lower close’.
However, we ignore this clue at our peril – it might prove to be a timely marker of a turn in trend.
Ideally this would have been seen after a more accurate test of the 76.4% recovery level, but this is not essential. - DAILY CHART:
In the FX Specialist Guide we have been looking at bull channel base projections – the s/term one has not been breached on a closing basis yet, which would be the first bear confirmation.
Currently, believers in the Key Reversal indication may try for speculative sales around 1.4950, just ahead of a s/term 76.4% bounce level (61.8% has already been reached, and sometimes this can be a good level in EUR/USD – we are looking at a lower risk entry, but with the chance it won’t be seen). The 1.5061 high offers a nearby risk level for stop purposes.
Note lower key support is offered by the prior 1.4446/04 prior highs area, which also incorporates the main 23.6% pullback level and the next bull channel base projection – closing below this would provide a further clear bear sign.
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