EURUSD
You must have heard of the "Falling Three Method" candlestick formation. See also Bulkowski's page. Now, think of the 2 candles within one long candle. It is exactly the same as above, but two candles only. Since I could not find "Falling Two Method" anywhere, I guess I can claim to be the first one to bring this formation to trading public's attention :) I simply call it 2 in 1 candlestick formation.
Thus, December was a long red (down) candle followed by 2 (Jan & Feb) small bodied candles within Dec candle. Probable month end targets are a) 1.30, b) 1.29 and possibly c) 1.2623 (Jan low). This trade idea will be invalidated if monthly candles close above Dec open.
The trading plan: marginal lower low, bounce and then renewed selling pressure
Last Fib support of 61.8% comes in at 1.3169 and 200MA (not shown) on this 4h chart comes in right below 1.3169 as well. This is also the area of 19 Feb gap which will finally be closed. Just below at 1.3140 & moving 3 pips a day is the uptrendline connecting Jan/Feb 16 swing lows. I expect 1.3169 level to hold for a bounce to 1.3225/40 area where Fib 50% and a daily resistance reside. I do not expect the pair to go higher than 1.3260. Finally, the pair should then breach the Fib 61.8% and the uptrendline.
To summarise, with EURUSD reversing at Fib50% resistance, it very much appears that the top with a big V (see the chart) is in place. All we need is a break of the trendline to confirm it. On fundamental side, the ECB is doing all it can to debase the Euro, a clear invitation to sell.
Good luck
P.S. Cycle watchers and a couple of newsletters I am subscribed to are calling for a top in March. A couple bloggers say the top was on Feb 28 but it appears it may stretch into mid March, important Bradley turn date. Uptrendlines on major indices are nearby and a break of them will give us the "short" signal. Note that Russell2000 (considered to be a leading indicator) is lagging already, not a good sign.
You must have heard of the "Falling Three Method" candlestick formation. See also Bulkowski's page. Now, think of the 2 candles within one long candle. It is exactly the same as above, but two candles only. Since I could not find "Falling Two Method" anywhere, I guess I can claim to be the first one to bring this formation to trading public's attention :) I simply call it 2 in 1 candlestick formation.
Thus, December was a long red (down) candle followed by 2 (Jan & Feb) small bodied candles within Dec candle. Probable month end targets are a) 1.30, b) 1.29 and possibly c) 1.2623 (Jan low). This trade idea will be invalidated if monthly candles close above Dec open.
The trading plan: marginal lower low, bounce and then renewed selling pressure
Last Fib support of 61.8% comes in at 1.3169 and 200MA (not shown) on this 4h chart comes in right below 1.3169 as well. This is also the area of 19 Feb gap which will finally be closed. Just below at 1.3140 & moving 3 pips a day is the uptrendline connecting Jan/Feb 16 swing lows. I expect 1.3169 level to hold for a bounce to 1.3225/40 area where Fib 50% and a daily resistance reside. I do not expect the pair to go higher than 1.3260. Finally, the pair should then breach the Fib 61.8% and the uptrendline.
To summarise, with EURUSD reversing at Fib50% resistance, it very much appears that the top with a big V (see the chart) is in place. All we need is a break of the trendline to confirm it. On fundamental side, the ECB is doing all it can to debase the Euro, a clear invitation to sell.
Good luck
P.S. Cycle watchers and a couple of newsletters I am subscribed to are calling for a top in March. A couple bloggers say the top was on Feb 28 but it appears it may stretch into mid March, important Bradley turn date. Uptrendlines on major indices are nearby and a break of them will give us the "short" signal. Note that Russell2000 (considered to be a leading indicator) is lagging already, not a good sign.
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