I trade 28 currency pairs, and rarely focus on one.
But i am noticing something interesting from a technical perspective that is happening with the most popular Forex pair - The Fiber (EUR/USD) on the Monthly time frame.
This is a long term outlook, and it will be a top down analysis.
This is how the monthly chart looks for this pair.
Pink - Monthly
Blue - Weekly
Red - Daily
Obviously this pair has been in a bearish trend for the past 12 years.
Even though the horizontal level has been broken 2 times before, and now again towards the downside. With the volume we have seen this month, price came back up to retest that significant level, and it touched the level to the pip, and immediately went back down, signifying strong market rejection. The monthly candle is still ticking, and we are seeing a formation of a very nice pinbar on the monthly time frame. Of-course, we need for that ticking candle to close in order to make any type of a decision, but so far it looks promising.
If we zoom down to the weekly time frame, we can see a combination of a railway tracks and an outside bar, but both formations very ugly looking, and not the type of price action i would like to get involved in.
For now, i don’t plan on putting a sell stop order based on this weekly candlestick formation, even though i am tempted. Right now, it’s important that i am noticing heavy market rejection, and a potential further move to the downside.
And lastly, i want to share what is happening on the daily time frame.
Basically, after that big push to the upside, price went in to retracement mode, retaracing to the pip to 61.8 Fibbo level. This is great, cause it’s a signal that all the traders are looking at this level.
My train of though is that if price breaks bellow the 61.8, and retests it from bellow, that could be my entry signal, since it will be a confirmation that the bulls are regaining control, and the downtrend is continuing.
Here is the daily chart with Fibbo:
Without overloading this post with to many screnshots, if you zoom up to the Weekly and Monthly with the fibbo, you can see that all formations line up to the 61.8.
Conclusion: I know i have a bearish bias, and want to go short, weather i will get that opportunity this month on the D, W, or a i will play it uber safe by waiting for the monthly to close, remains to be seen.