EUR/USD: Weekly Technical Outlook; Buy on Pullback to 1.4050

I am going to stand aside for now and wait for a pullback to 1.4050 before going long. I have got many questions asking how I determine overall direction. I use moving averages (21 EMA, 50SMA, 200 SMA) and where there are pointing on "the clock" on the daily chart to determine whether price is in a downtrend, uptrend, or trending. If you look at the daily chart I attached to this post, you will notice that I drew the numbers 1-6 as they would be on a clock. When the 21 EMA(yellow) and 50 SMA(blue) are pointing to the 1:00 - 2:00 area of "the clock" price is in a uptrend. If trend lines were pointing at 3:00 region of "the clock" I would determine that price is in a range. If trend lines were pointing 5:00 - 6:00 area of "the clock" price is in a downtrend. And notice how the 21 EMA is above the 50 SMA, which is above the 200 SMA; this is also an indication that price is in a uptrend. As a result of these indications, and the fact that EU broke through a lot of technical resistance last week, I am bullish EU and have determined that EU is in a uptrend. This means I am looking only to take long positions. I do consider counter trend trades when I see bearish divergences forming on upper time frames and stochastics are overbought/oversold on all time frames, but this is rare.

Weekly Strategy: Buy on dips with overall target at the 138.2 FIB extension level @ 1.4290

EUR/USD: +30 pips last trade

I went long at 1.4019 and exited at 1.4050. I am going to stand aside for now and wait for the 1.4050/60 area to be tested as support. Stochastics on H4 and M30 charts are in overbought territory and there are bearish divergences (price making higher highs, OSMA failing to make higher highs) developing on both M30 and H4. If the 1.4050 area holds as support I will take another long position and my target will be 1.4290 which is the 138.2 FIB extension level.

EUR/USD: Why wait for the retest?

The EU broke the 1.3980 level finally after several attempts throughout the day. Does this mean you jump in so you don't MISS THE MOVE? Absolutely not! 70% of breakouts fail so it is critical to wait for a level that is broken to hold as support. Notice the M30 chart where price breaks that level and gains strong momentum as this level is violated. The reason this happens is because some people are looking to buy there but many short sellers have their stops just above that level. Waiting for the retest is giving you a level of insurance and helps improve you risk reward ratio.

EUR/USD: last trade -2 pips: Will EU break 1.4000?

The EU tried to break the 200 SMA M30 several times without success. This is why waiting for the retest is critical. If you would have jumped in on those breaks without waiting on the retest you would have felt a lot of pain several times. I am waiting for the 1.3980 level to be broken and retested before going long. If that 0.0 Fib level is broke and RETESTED my initial target will be 1.4055 which is a few pips below the 161.8% retracement level. I will be looking to go short if we get a break and retest of the 1.3880 area.

EUR/USD: Long @ 1.3964

EUR/USD: EU gets a boost from better than expected economic data

The EU got a boost after German unemployment change data came out better than expected. In addition, core durable good orders and unemployment claims data out of the U.S. came out better than expected. The EU rally was halted when U.S. new home sales data disappointed the market. I am waiting to see if the 21 EMA H4 (purple dashed line on M30 chart) holds as support. If it does i will maintain my bullish bias and will look to go long.

EUR/USD: Closed 1.3925 +35 pips

I closed this trade after housing data came out. I am going to stand aside for now. I just recently increased my position sizes so I am adjusting to that. I add to my position sizes as my account balance allots for it.

EUR/USD: Long @ 1.3890

I waited for the retest this time. I will move my stop up below the 200 SMA (red) once it is broken. I moved my stop to break even shortly after the 21 EMA (yellow) was broken and retested.

EUR/USD: WAIT FOR RETEST!!!!!!!

The market was tough today. My trade today was a prime example of why it is critical to wait for the retest. I got impulsive and was enticed by the spike around 8:00 AM this morning that blew through the 21 EMA on the H4. That is a significant level that hasn't been broken since the 18th. Shortly after taking the trade price bounced right off daily S1 and went right up and broke back through the 21 EMA and daily PP and took me out quickly. If I would have waited for the retest I would have still went short but not until the 21 EMA was broken and retested after this reversal. I break this rule much less often now, but it is a rule that I should follow 100% of the time. I will be looking to short EU as long as price remains below 21 EMA H4. Right now price is meeting resistance at the weekly PP (1.3822). Stochastics on H4 and M30 are in oversold territory right now so EU may be due for a pullback before declining further.

EUR/USD: Stopped -40 pips

EUR/USD: Short EU @ 1.3927

I started feeling some pain on this trade almost immediately after taking it. If I get stopped out, I will examine what I did wrong later. Headed to the office.

EUR/USD: Possible short opportunity

I will be looking to go short if the 21 EMA on H4 is broken and retested. If and when this happens, I will pay attention to how price is behaving around Fib retracement levels on daily chart. As these levels are broken I will bring my stop down 20 pips above them.

EUR/USD: closed last trade +48 pips

I decided to close out the last trade because price found a great deal of resistance at the 1.4015 level. I have decided to wait for price to break and retest the 1.4044 level before taking another position. Stochastics are overbought from Weekly to H4 time frames so we may get another retracement prior to the next bullish continuation. Also, there is a bearish divergence (price making higher high, indicator failing to make higher high) developing in OSMA on daily chart.I am sort of struggling with this decision because I have failed to let the last several trades go to target.

EUR/USD: Long @ 1.3941

Price retraced from last weeks high to the 61.8% Fib level (1.3855) and to lower trend line depicted in M30 chart. I like to wait for a break of the 21 EMA before entering so I got in at 1.3941. My target will be 1.4170 which is the 50% Fib level depicted on weekly chart.

EUR/USD: Possible trade for the counter trend traders

I am going to stick to my trading plan. For those of you that counter trend trade this may be a nice set up for you. H4 stochastics are turning bearish at the moment. If you are thinking of taking this trade you may want M30 stochastics to finish bull cycle.