The EUR/USD pair fell during the session on Tuesday, but found enough support below in order to turn things back around and form a little bit of a hammer. This hammer suggests that there are buyers out there, and that more than likely they will step in to try to pick this pair up and push it through the downtrend line that is just above. If you been listening to my videos and reading my analysis, you know how important I believe that the downtrend line is. Because of this, I am still not in this market, but am watching it very intently.
Going forward, a move above the 1.3925 level on a daily close would probably be enough to get me to put a position on. I believe that a long position at that point in time should continue to offer buying opportunities from time to time as we pullback. Those pullbacks should offer support occasionally and as a result you could build a huge position given enough time.
Remember, it’s about returns, not quantity of trades.
I believe that one of the biggest mistakes new traders will make is trying to trade all the time. Quite frankly, I know some really good traders and make it outrageous profits every year by placing just a handful of trades. Quite frankly, that’s the dream. You simply place a trade here and there and watch your account grow. There’s no reason whatsoever to sit in front of the computer and stare at the screen.
This is essentially how I am looking at this market now. I believe that the next 1000 pets will be settled fairly soon, if we can get a breakout, or a breakdown. Either one of those would work for me, as I believe that this pair need some type of longer-term direction. Remember, the downtrend line that we are fighting with at the moment is from a monthly channel, something that doesn’t get broken very often. On a break out to the upside, I am looking at a target of 1.50 over the longer term. On the downside, if we get below the 1.37 level, I see no reason why we don’t go back down to the 1.28 level again.
