we have several things to watch for. Namely, this short term triangle. A break of the low indicates another swing downwards, with a target of 1.1600. An upside breakout is somewhat more interesting.
Right now the breakout point for the triangle is just above 1.2450 which places a target at 1.3000.
The dominant trendline, the one which factors all major swings, will intersect just above 1.3000. Thus, the triangle breakout may have just enough steam to break the dominant trendline. If that is the case a much larger reversal could occur. If the trendline holds, look for lower rates once again off that level.
By breaking the market down to these two points on this time frame, we can de-clutter a lot of the information out there. A drop below 1.2130 – indicates continued downward pressure. A rise above 1.2450 indicates pressure higher.
False breakouts are tradable too. In this volatility don’t get stuck to one side. If something breaks out and fails, don’t be afraid to trade the failure. Be Nimble – this is an individual trader advantage in the market place; they can enter and exit with ease and at will.
Happy Trading
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