False Breakout or Break Down Towards 1.06 ?
I find this pair interesting, and there is a bias for both a long and a short trade, which I'll explain in this post.
Let's start with the short trade idea. Last Friday, there was a significant move as the price broke below the 1.105 support level, which had held since August last year. The price dropped to the next support at 1.09 and has since bounced back towards the 1.105 previous support and should now act as resistance.
To confirm the breakout, we need the 1.105 level to act as resistance. So, for the short trade, I'm looking for the price to come back to this level and show resistance on shorter timeframes, similar to the image below:
If we see this type of price action, I'll use my TRFX indicator to find selling opportunities on shorter timeframes. If this happens, there's a good chance of a downward move towards the BUY/DEMAND area starting at 1.06, which could attract long-term buyers and be a good place to start a long trade, this is where I will be looking to go long.
To invalidate the short trade, we'd need confirmation that the breakout was false, along with a strong weekly close above the 1.105 level.
Let's start with the short trade idea. Last Friday, there was a significant move as the price broke below the 1.105 support level, which had held since August last year. The price dropped to the next support at 1.09 and has since bounced back towards the 1.105 previous support and should now act as resistance.
To confirm the breakout, we need the 1.105 level to act as resistance. So, for the short trade, I'm looking for the price to come back to this level and show resistance on shorter timeframes, similar to the image below:
If we see this type of price action, I'll use my TRFX indicator to find selling opportunities on shorter timeframes. If this happens, there's a good chance of a downward move towards the BUY/DEMAND area starting at 1.06, which could attract long-term buyers and be a good place to start a long trade, this is where I will be looking to go long.
To invalidate the short trade, we'd need confirmation that the breakout was false, along with a strong weekly close above the 1.105 level.
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