Hello again fellow and fearless koalas for another eurusd review!
I sense an impressive year of trades ahead of us and a lot of learning for us to take and share with friendly readers!
Today before we start planning our trade, I´d like to share a little comments about what happened last week with eurusd (in technical terms of course), because I think and have a lot faith on it that the news, bailouts, austerity plans or whatever comes during our week of trades reflect themselves on charts and the charts is what we need to harvest our profits.
Last week traders were apprehensive to face the effects of Fiscal Cliff for USA that were set to take place at midnight on December 31, 2012. Have you ever heard the phrase: “Buy the Rumor, Sell the Fact”? The events on eurusd chart before the fiscal cliff was a classic example of that! Traders with positive rumors bought eurusd and we started a week with around 80 pips bull gap and then, after fail to sustain high levels when the facts actually become known, January 01, 2013 we saw a eurusd sell off around 280 pips from 1.3280 back to a psychological level of 1.30. This was the classic “Buy the Rumor, Sell the Fact”!!
Having said so, let´s go to our trade plan. Again the green box between 1.3165 and 1.3125 before our support now shall serve us as a resistance for us to short; of course with a good and reliable 1h and better 4h candlestick pattern to trigger our trade. Above it we´ll return to bullish mode and a new trade plan will be needed!
We´ll have two targets for this trade, 1st target around 1.30 and on a break out of this level we´re after a 2nd around 1.2880. Use the money management already explained in one of our reviews here: http://thegeekknows.com/2012/12/elmar-eurusd-trade-plan-25-dec-12.html to make possible track down two or more targets in a single trade plan.
That is it folks, our lines are drawn and we have a good trade plan to follow. Be cautious because TheGeekKnows already warned us about the return of the bull even after the Fiscal Cliff in this post: http://thegeekknows.com/2013/01/audusd-and-eurusd-forecast-7-jan-13.html !!
So be patience, both the possibilities are valid right now. I hope you enjoy our trade plans.
Spread the word and let´s build a great community of traders to share wealth and knowledge!
Green pips for us all!