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.
Sell EUR/USD
This pair has been climbing steadily as the market believes the Fed will cut rates again due to a weakening US economy. But its failure to break above the 1.49 handle has me thinking a correction might be in the works.
European officials have started to cry about the euro's strength and there are rumors of a possible intervention if the price nears the 1.50 handle.
ECB member Wellink stated that while current levels aren't an immediate concern, if it the euro continued rising, all ECB members would slice their wrists.
The latest COT data recorded little change over the week with long Euro speculative positions still close to 70,000 which will limit fresh Euro buying.
On the technical side, there is bearish divergence with price making a higher high while the oscillator makes a lower high. Since a doji formed on 11/22, which is a reversal candle, I think this pair has completed its wave 3, and I now look for a wave 4 correction.
I'm going to short now at 1.4820. My stop loss (SL) will be 1.4915. My profit target (PT) will be 1.4600, its 38.6% Fibonacci retracement level. I feel as long as this pair can stay below 1.4870, there's a good chance of it falling. I will post any trade adjustments in my comments section below.
Short EUR/USD @ 1.4820 | SL: 1.4920 | PT: 1.4600
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