EURUSD – Shooting star formation confirms correction

Looking to sell a rally

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Technical

Monthly: Trading within a bearish channel formation. Trend line resistance is seen at 1.2515. Levels close to the 38.2% pullback level of 1.2522 (from 1.6038-1.0349) found sellers. There has been little net change for the last three months although the break below 1.1500 realised a sharp recovery.

Weekly: The morning star formation led to further positive price action into the early part of last week, however, the rally was sold into resulting in a shooting star candle being posted. We trade within the Ichimoku Cloud with price action being mixed and volatile. The long-term bias is for a stronger move lower and further downside is now favoured.

Daily: We look for the first 5 wave pattern (Elliott Wave) to have completed and a corrective phase looks likely. The move to the downside should now be mixed and volatile. The pair currently offers horizontal support at 1.1585 and a break of this level should lead to a test of the 61.8% Fibonacci retracement level (1.1466). Selling rallies offers good risk/reward for this weeks outlook.

We look to Sell at 1.1650

Stop: 1.1750

Targets: 1.1508 and 1.1466

UPDATE: The move to the downside is stalling. We now look to close out for a small profit

 

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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