EUR/USD – CONSOLIDATION AROUND 1.3175 – 1.3200
Following Sunday’s (24.08.14) big gap down from 1.3240 to 1.3200 most analyses were expecting a GAP FILL bounce.
The gap fill and all the predictions of candlestick formations to promote this move so far have proved fruitless. It now looks that the longer we stay below 1.3200 the more the chance that we head lower once again towards the overnight lows of 1.3152. A break below the overnight lows at 1.3152 should see a move to 1.3100 and then all eyes will be fixed on 1.3000.
Right now the Relative Strength Indicator (RSI) do NOT show oversold so we should bear this fact in mind.
How would I be playing the EUR/USD
1. I do not chase trades (It is a poor discipline).
2. My approach would be to try to sell on rallies. Above 1.3200 as close to 1.3250 as possible must be viewed as a bit of a gift. That is of course if we can get this move?
3. There are high beta news events on the horizon next week which would either drive the pair lower not giving you the opportunity to short at higher levels or the news events will provoke USD weakness, which could give you a good entry short at a higher level.
Given the current trading conditions I would not be entering with a full-sized position. Good MONEY MANAGEMENT techniques should be used to ensure that you keep within acceptable RISK PARAMETERS.
Scott Pickering
The Pip Accumulator
Some thoughts to help you trade more consistently
