Ergo, charts should contain only the tools that you actually are using and not a throw up of indicators, trend lines, and so on. That could only lead to paralysis of analysis which I remember it happened to me a couple of times like two years ago, where I just got freeze and didn't knew what I was doing... my early apprentice stage...
That's why right now I'm apologizing in advance for the next chart because it seems like a clown puke all over the place. Even though, there is the information that I need to see right now.
If we remember, price was near a possible movement... and it seems to me that the time arrive. Analyzing the daily chart, we had a false breakout to the upside and two consecutive bearish days before reach the short-term trend line, but yesterday's bar just passed through it. With a breakout to the downside, which was more favorable as I posted before, price is now testing its previous support trend line that now became resistance. Also we have the major downtrend line (blue channel) holding price action. A bearish crossover in the stoch may suggest that the upside should be limited and also it leave the overbought zone which suggest that the previous high should last for several days.
In the 4H chart price has just acted as expected, finding resistance within the cluster between 1.3457/81 which contains a few fib retracements, extensions, projections and also a former minor swing high. With the trend line breached, a retest would be expected and just did. Analyzing the chart below, price now "should" take out its last minor swing low at 1.3265 before we are more "confident" about this analysis. If price takes that low, as a first possible target I've plotted a cluster in the chart that just hits right the 1.3200 for a short-term trade but this position would work better in the longer time frame as we had analyzed it.
More confluence of events are present in this chart; we have a slight divergence on the stoch and to me, it seems that a top head and shoulders is forming. And now some issues to stay aware of, before taking any trade. Price is always right. Offer/Demand is that simple! We are taking the stake that the euro is going to sink, therefore, do we have a reason for that? I'm not a fundamental analyst but from the technical point of view, more than likely, is going to happen. We have still a little room for stochastic to go higher (momentum!) so a bearish crossover would be a better signal to trigger.
What if everything goes wrong and my analysis is rubbish... well, that's why stops are for. If a climb in price takes out the previous high, more than likely a further advance will be made.
What is the market trying to tell us? My ideal set-up would have been an entry @1.3400 with a stop at 1.3500 and a first target at 1.3200. That gives us a 1:2 ratio. Considering the larger timeframe, the risk/reward would be a lot more than that.
No, I haven't enter the trade. Let's see how develops or if there's another short opportunity. My head is screaming: get short! get short! But price is now at 1.3377. I just have to recover my confident which I lost somewhere in the ashes from my burned account.
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