EURUSD - Detailed MTFA Description - Trading with ConfluencesHi Traders!
The market is in an overall Uptrend.
We're going to start the MTFA with the Weekly Chart.
Then we'll continue with the daily, H4 and H1 Timeframes.
Here is the weekly TF:
As you can see the market was in a descending Parallel Channel for a very long time.
Then, it broke out and started to move upwards.
After a while, it started to consolidate in a Range.
Now, we are at the second Trending Move.
The bullish Target is the Resistance at 1.25 and the bearish Target is at 1.20.
Moving on to the daily TF:
Here, the market is in an Uptrend.
It is making higher Highs and higher Lows.
But, take a look to the first Trendline:
Price was rallying up and after the Trendline-Break the market started to consolidate.
Then we have a second Trendline.
Now it is breaking this Trendline and we expect a consolidation.
The Range of the consolidation is between the Resistance at 1.22 and the Support at 1.20.
Continuing with the H4-TF:
Here you can surely identify the Head and Shoulders Pattern.
We have a clear left Shoulder and a clear Head.
The question is now: Is this a completed right Shoulder or is the market going to retest once again?
However, we also have a Neckline and we will observe the reactions around it.
Mainly we are looking to sell after the H&S Neckline Break.
Lastly, here is the H1-TF:
So, this chart may look complicated to a new Trader.
But let's devide it, so you get hopefully a better understanding of it.
Firstly: Which Key Structure do you already know from the higher TFs?
The weekly Resistance (label is there)
The pink daily Trendline
The H4 Neckline of the Head and Shoulders Pattern (label is there)
So, you already recognized those three Key Structures.
Moving on from left to right.
We have a Double Top Pattern.
4 out of the 9 speech bubbles are including this Pattern.
This one blue dotted Level on the Top is the Neckline of the Double Top Pattern.
The red circle reinforces the Double Top Neckline and Trendline Break.
We have a descending Parallel Channel.
This shows us possible valuable Areas to buy and sell.
The idea is to sell at the Top of this Parallel Channel.
But not only because that, we also have a last confirmation...
We have a 50 EMA showing bearish strength.
The market often reacts to the 50 EMA, because it is an indication for the Trend pressure.
The Trade Structure
The red Area shows the SL and the green Area the TP.
The smaller the red Area compared to the green one is, the better Risk-to-Reward Ratio you have.
We here have a RTR of 1 to 2.18.
Now you should be able to understand the confluences behind this whole Trade Setup:
- Approach of weekly Resistance / potential bounce off
- Break of Daily ascending TL
- H&S Pattern on H4
- Double Top Pattern on H1
- Active Descending Parallel Channel on H1
- 50 EMA showing bearish strength on H1 TF
We recommend to trade with a low risk, because we are trading against the Trend here.
Thanks and successful Trading :)!
