Happy New Week Surfers,
I trust you rested well over the weekend and are ready for some chart action over the trading week. I’m going to say this veerry quietly ……..it looks like we may have a trending market with rally/retracement patterns on all time frames…….ssssshhhhh – we don’t want to disturb the pattern!
Has the Euro found it’s bottom???? – well that will only be divulged with the passing of time but certainly this rally is promising. We spotted a nice setup on the Daily last week with the Doji break of our Daily critical Zone (DCZ) @ 1.3292 exploding to our next ever reliable DCZ @ 1.3451. We have been watching & searching for setups at our DCZs very closely during the first part of 2012 and that will continue in earnest in the months ahead. As stated last week, our resistance trendline may well be the immediate target and I have a beautiful convergence of DCZ, Resistance Trendline & Bullish Channel drawing price action to it – will keep you posted.
The expected explosion that we got of course means we need to see a pullback to take the heat out of the now overbought market. There is consolidation happening currently and potential for price action to continue northbound BUT – DP hasn’t been tested since Thursday during Asia session so entering long is risky, as is entering short because it is countertrend. Neither is impossible however and if AAA StP setups occur at our hotspots – we simply reduce our stake relevant to the risk.
We have 3 hotspots today (price action is at #1 right now) but my favourite is hotspot 2 or 3 which will be visited only after a test of DP which is what I would like to see.
Happy surfing all.
Geoff | Certified SurfingThePips Trader