Over the several months the EUR/USD has been in a strong stage 4 downtrend. Hopefully you have been able to profit from this move lower. Recently things have become more interesting but that may not be blatantly obvious at first glance.
Let's first take a look at the daily chart below.
http://onlinetradersforum.com/attach...613-gif.42684/
As you can see, the downtrend has been very strong and lucrative if you have been following the trend. That said, the way things are shaping up now would appear as though another drop is imminent. Before we start thinking to back up the truck and load up short we must first consider the larger timeframe.
To do this we will take a look at the weekly chart below.
http://onlinetradersforum.com/attach...614-gif.42685/
As we look at the weekly chart above we see that EUR/USD is approaching a significant support level. This will decrease the odds of any short trade being long lived. We are more likely to see price chop around in this area and either retrace or go sideways.
Now, just because we are at support does not mean we want to jump in long either. We need to wait for a transition to occur before looking long but the potential is there, in the short term.
Looking farther out, if EUR/USD cannot hold this level, there is a lot of additional room to the downside.
It will be interesting to see how this all plays out but make sure you do not find yourself trading against the trend.
If you have any questions feel free to email me, kurt@pristine.com
Trade Well!
Pristine Capital Holdings, Inc.
http://onlinetradersforum.com/attach...go2-png.42686/