EURUSD: Trapped between Support and Resistance
This post will answer two previous questions asked by students on EURUSD.
Question by Student (25 March 2014)
- Can we short EUR USD when H1 or H4 WR?
- Monthly shows price near resistance.
- H4 point 4 resisted at the neckline of the previous H&S.
- On the other hand, if price closes above 1.3850, we can long? Which WR point 2 (red).
Question by Student (27 March 2014)
- Is possible to short after the close of the H4 candle as illustrated in the chart?
- If price closes below 2b but not 2a, is this still a valid setup?
- Should we use the the previous right shoulder or the head as the start of the flow to draw in the fibo plot?
Based on the EURUSD on 25 March 2014
On 25 March, we were looking at a CTT trade in anticipation of a H4R condition for EURUSD.
- In a CTT trade, a H4 close is preferred for a trigger.
- In a good 1234 pattern, point 2 needs to be at a H1 box high/low and in a separate H1 box from point 4.
- The start of the flow can be identified as the most recent downflow which would be at the start of the shoulder.
Current Big Picture Look at EURUSD (31st March 2014)
- Price is currently trapped between support and resistance. It would be prudent to wait for the market to give a clearer indication for a direction to trade in.