EURUSD Trading Analysis - Utilizing Harmonics and Divergence
Presence of a harmonic pattern AB=CD on the EURUSD chart, indicating a potential retracement from the 0.5 level.
Bullish Divergence on RSI:
Further bolstering our analysis, we have identified a bullish divergence on the RSI indicator, suggesting a potential trend reversal to the upside.
Entry Point:
To ensure a strong entry point, we will wait for the last Lower High (LH) to be broken, indicating a potential trend continuation in the bullish direction. Upon confirmation of the breakout, we will initiate a buy trade.
Initial Stop-Loss:
Our initial stop-loss order will be placed at the last Lower Low (LL) point on the chart. This level serves as a critical support level, providing protection in case the trade moves against us.
Managing Risk:
We will adhere to a total risk of 2% of our trading capital. This includes splitting the risk between TP1 and TP2, allocating 1% to each take-profit level.
Take-Profit Targets:
a. TP1: Set at 1% gain. Once TP1 is reached, we will close half of the position to secure profits and adjust the stop-loss level to break even.
b. TP2: Set at an additional 2% gain. This allows us to capitalize on further price movement in our favor while protecting our profits with the adjusted stop-loss.
News Impact:
Given that news events can influence the forex market, we remain vigilant about potential price volatility. If the stop-loss is triggered due to unexpected news, we will reassess the situation and re-enter the trade from a more advantageous position.
Bullish Divergence on RSI:
Further bolstering our analysis, we have identified a bullish divergence on the RSI indicator, suggesting a potential trend reversal to the upside.
Entry Point:
To ensure a strong entry point, we will wait for the last Lower High (LH) to be broken, indicating a potential trend continuation in the bullish direction. Upon confirmation of the breakout, we will initiate a buy trade.
Initial Stop-Loss:
Our initial stop-loss order will be placed at the last Lower Low (LL) point on the chart. This level serves as a critical support level, providing protection in case the trade moves against us.
Managing Risk:
We will adhere to a total risk of 2% of our trading capital. This includes splitting the risk between TP1 and TP2, allocating 1% to each take-profit level.
Take-Profit Targets:
a. TP1: Set at 1% gain. Once TP1 is reached, we will close half of the position to secure profits and adjust the stop-loss level to break even.
b. TP2: Set at an additional 2% gain. This allows us to capitalize on further price movement in our favor while protecting our profits with the adjusted stop-loss.
News Impact:
Given that news events can influence the forex market, we remain vigilant about potential price volatility. If the stop-loss is triggered due to unexpected news, we will reassess the situation and re-enter the trade from a more advantageous position.
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