I'll be scouring the charts for "actionable masterpieces". These will be signficant chart patterns or set-ups that I feel are not only tradeable, but also have a high probability of making big profits with little risk. Whenever I spot an "actionable masterpiece", I will post an annotated chart (my chart art) along with an explanation. My goal is to help you learn how to spot these low ocurring but highly profitable "actionable masterpieces" yourself.
EUR/USD
The range from hell continues...
Daily Chart
Nothing much happening here. The pair pretty much hit the middle Fibinnel line then rose back up. But if you look at the two grey horizontal lines which are my support and resistance levels, we are still range-bound. An excellent trade idea would be to short the pair if it hits the top grey horizontal line. Your stop would be above the pink 50 EMA. Your profit target would be the top Fibinnel line. Solid risk to reward ratio. If you want to be a rebel and trade against the trade, you could wait for the pair to close above the pink 50 EMA and target the blue 100 SMA. Your stop would be below the top grey horizontal line.
4 Hour Chart
It gets even uglier on the 4-hour chart. First, we're range-bound between the two grey horizontal lines. Then we're also range-bound in between the Fibinnel lines. And then the pair is also trading in between moving averages. The pink 50 EMA and blue 100 SMA are acting as support for now, while the purple 200 SMA is resistance. Even if I applied make-up on this chart, I still couldn't find a good looking trade.
1 Hour Chart
The pair has broken out its descending channel here. Bummer. Check out the Fib lines though. Its rocket boosters ran out of gas around the 61.8% level and is now – surprise surprise – trading sideways. Those three moving averages are acting as strong support right now so I wouldn't be surprised if the pair basically moved between the 38.2% and 61.8% line for awhile. Major bummer.
Could this be a new channel? It could be. Let's watch it. If it its, look at that strong support area highlighted with the yellow circle. A good trade idea would be to short the pair if it's able to close below the 38.2% Fib line. Your target would be the next Fib line.Keep in mind of the big picture though. The pair is still basically trading sideways between 1.1850 and 1.1640. This market is not exactly a trenders paradise lately (unless you've been shorting JPY!)...and the market will probably stay in limbo until next Tuesday when the fabulous Fed meet.
