Friday, May 18, 2012

Trading Plan for Week of 5/20/12 EURUSD and EURJPY


We ending the week with some short covering right at the weekly trendwall dating back to the low of June 2010. The market produced a "not very sexy" hammer which could suggest some further much needed correction is in order. Since we did not close inside of that trendwall, I may look to short on Sunday's open if price action suggests. Nonetheless I am thinking that price will rise to the .2880-.3000 area which I would like the opportunity to short again. Target area will be defined depending on what entry I chose to exercise.


The hammer on the daily chart looks a lot more appealing than the eurusd chart. With that daily candlestick along with an oversold RSI reading suggests a possible run up to the 102.20 area at which point I will look to short if the signal presents itself. If i do short at that area, I will look to ride back down to the 100.20 area for about 215 pips. On the 1 hr chart, we can see this small head and shoulders pattern with the neckline looking like it has been breached and broken. That pattern can suggest some more bullish momo.

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