It is an interesting week for Eur/Usd pair so far. Every day euro was going higher and higher, but this moves were very rapid. Everyone was watching for next strong resistance at 1.3290. That level was too strong for bulls to break and we saw a sell-off today. Many rapid moves, so not easy situation to trade successfully. Below you can see the resistance at 4-hour chart:
4 hour eur/usd chart and resistance at 1.3290
To be honest, it was a huge problem for me to catch those moves. On some occasions it took euro just minutes to move 40 pips up or down.
Fortunately, you can always use Fibonacci, even in hard times like this. In last two days we could find some good investing opportunities. Actual trades were made on 5 minute chart, but I show you 15 minute charts, because it is easier to see the whole move.
Ok, the first trade opportunity:
eur/usd 15 min. chart
Let’s take the first trade from the bottom. There was another strong move to 1.3250 and after that a correction to 38.2% retracement line and 50 moving average. After few hours euro broke above white resistance line – it could be the first signal to enter. Later you could use signal from CCI or RSI.
Second signal was after breakout above recent high (1.3250). The move continued up. As you can see, two Fibonacci extensions were a good place to close position: 127% and 138% extension. As you remember, around 1.3290 is a strong resistance, so it was smart not to wait for move up to 161.8% extension, but to close position at 127% or 138.2%.
Today we had another good chance to short the eur/usd:
eur/usd 5 min. chart
From that point euro went down very strong. It was maybe hard to catch it at first moment, but after correction to 61.8% retracement we saw a break below 0% point (recent low) and there was a sell-off. It ended at 261.8% extension line were bulls were trying to get back to the game.
What is next for euro? If resistance at 1.3290 will hold, it is possible that we will have a head & shoulders pattern. The neck line of that pattern is at 1.30 level. For now it is only a possible scenario!
eur/usd, daily chart, possible head&shoulders pattern developing
There is a chance that bulls will break above 1.3290 and go up to 1.35 level (the place where head is).
