From Q1 2018, the Euro has been on a run. And yes, a nice steep run where buy holders are turning in a nice profit. There have been bumps along the way and that is normal. However, the thing is, stochastics are in the overbought territory and prices are likely to correct. Going forward, I shall recommend shorts in lower time frames because as it is, sell pressure is building up following periods of bearish divergence.
In the weekly chart, it’s clear that this week’s candlestick has a long upper wick meaning sellers are stepping up. This is what we were expecting now that we have these lower lows relative to the upper BB and a stochastic sell signal in place.
In the 4HR chart it’s obvious that sellers are in charge. In the course of the week we have seen these two humongous bear candlesticks that neutralizes bull pressure. This is on top of the stochastic sell signal with diverging %k and %d that is in place.
My EURAUD trade plan is as follows:
Stop Loss: 1.6100
Take Profit: 1.56, 1.51
Let me know what you think. Have nice trading day