Very interesting trade.
This is a good example of looking at multiple timeframes. Yes, you want to have information from the higher timeframe. Still, there is more to that. You want to have information from multiple timeframes and combine them together. Like Lego pieces.
In this case, we saw strong support on the daily timeframe. It was tested twice before.
Let’s switch to the lower timeframe. There was a head and shoulder pattern. The breakout from it was a good long entry position.
We knew already that this was an important support for the price so this head and shoulder was a very strong pattern and you should take it.
Next, let’s throw a Fibo at this move.
As always, Fibo from the first leg of movement gives us the best targets. This was a pretty explosive move and we saw EURUSD hitting 161.8, 200 and 261 extensions.
It was Friday so I decided to close it and take a profit.