Upcoming Long or Short Opportunity: EU at Converging Trendlines
Updated
I'm mostly on wait-and-see-mode with this trade, but there's opportunity for large, longterm profits in EU. I'm looking at this inverse head and shoulders pattern/symmetrical triangle. Here are two scenarios I'll be tracking if/when the price hits the 1.07940 area:
1) Inverse head and shoulders neckline is broken. In this case, we are in for a longterm uptrend (TP targets would be identified later). I would recommend buying into this trend after a brief retrace to around the 1.08000 level (psychological support after breakthrough).
2) Continuation of trend within the symmetrical triangle. In my opinion, this is the more rational scenario given Eurozone instability (Brexit, elections) and U.S. strength. Also, my MACD and RSI techs indicate a potential reversal. This is a medium-term downtrend to a TP at 1.06000 (again, a nice psychological level).
Symmetrical triangles are traditionally neutral in nature, so I wouldn't be surprised if the lower trendline acts as support for a pivot up. I'll be monitoring this and will provide updates to my idea.
Good Luck!
1) Inverse head and shoulders neckline is broken. In this case, we are in for a longterm uptrend (TP targets would be identified later). I would recommend buying into this trend after a brief retrace to around the 1.08000 level (psychological support after breakthrough).
2) Continuation of trend within the symmetrical triangle. In my opinion, this is the more rational scenario given Eurozone instability (Brexit, elections) and U.S. strength. Also, my MACD and RSI techs indicate a potential reversal. This is a medium-term downtrend to a TP at 1.06000 (again, a nice psychological level).
Symmetrical triangles are traditionally neutral in nature, so I wouldn't be surprised if the lower trendline acts as support for a pivot up. I'll be monitoring this and will provide updates to my idea.
Good Luck!
Note
Following a breakthrough and retest of the upper trendline, the price is sitting in the pivotal area mentioned in my description; however, it appears a break to the upside is more likely than option 2, which was the continuation of trend within the symmetrical triangle. Once confirmed, I will publish a new idea with more clear tp, sl targets.Trade active
Looking again at scenario 1, I am targeting 1.08575 as my first take profit. I will monitor the trade here if the target is hit. Seeing as indicators are nearly begging for a sell, I may close the entire position and reassess the pair. I will close this idea if my target is hit.Trade closed: target reached
Target 1.08575 has been hit and then some. I have taken profit and will look to enter a short position in the near future.
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