If you have been following my blog yesterday I've made a prediction on EUR/USD saying that we're heading lower and the spike up that happened during the yesterday's London session is just a bull trap, you can check out my blog post here: EUR/USD Bull Traps
Now we can look back and see how price action developed after I've made that prediction. In Figure 1 you can see the chart that I was posting it yesterday. At that point I said the fact that we couldn't close above the resistance level and bullish flag formation that's reason enough to assume that the breakout is a false move and the buyers coming in the market are very weak. My forecast was a break below support zone at 1.3640 than a retest and than continuing lower.
Now lets look how the market behaved and how my forecast worked out. In Figure 2 you can see the current price action on EUR/USD. It can been seen that the market has spent quite a lot of time near the resistance zone or the top of the bull flag formation, without to much success to break the upside showing once again that the buyers are very weak. Once we start moving lower the momentum picked up speed and we not only succeed to break the bottom of the bull flag formation but we also close below showing the seller are in control and much more stronger.
As I predicted yesterday after we broke below the bullish flag formation we retest the support level, and old support now has become new resistance level. Next big obstacle is the last swing low at 1.3546 but before that if we can mange to close below 1.3600 on a daily basis after NY close than we can expect further downside movement. But you have to be very flexible and let price action guide you because if we're turning back inside the bull flag than the price structure changes and we may see upside movement.
Best Regards,
Daytrader21.
Now we can look back and see how price action developed after I've made that prediction. In Figure 1 you can see the chart that I was posting it yesterday. At that point I said the fact that we couldn't close above the resistance level and bullish flag formation that's reason enough to assume that the breakout is a false move and the buyers coming in the market are very weak. My forecast was a break below support zone at 1.3640 than a retest and than continuing lower.
- Figure 1. EUR/USD Yesterday price action and forecast.(click on figure to enlarge)
Now lets look how the market behaved and how my forecast worked out. In Figure 2 you can see the current price action on EUR/USD. It can been seen that the market has spent quite a lot of time near the resistance zone or the top of the bull flag formation, without to much success to break the upside showing once again that the buyers are very weak. Once we start moving lower the momentum picked up speed and we not only succeed to break the bottom of the bull flag formation but we also close below showing the seller are in control and much more stronger.
- Figure 2. EUR/USD current Price Action and possible scenarios (click on figure to enlarge)
As I predicted yesterday after we broke below the bullish flag formation we retest the support level, and old support now has become new resistance level. Next big obstacle is the last swing low at 1.3546 but before that if we can mange to close below 1.3600 on a daily basis after NY close than we can expect further downside movement. But you have to be very flexible and let price action guide you because if we're turning back inside the bull flag than the price structure changes and we may see upside movement.
Best Regards,
Daytrader21.
