The daily EUR/USD has been trading higher but when looking at this time frame within its one-year market memory or lookback, the 34EMA Wave has not yet taken on an ESTABLISHED “twelve to two o’clock” angle and this means that while the rally certainly has bullish sentiment and momentum (reflected in the green GRaB candles) the transition does not show that the trend has completed and therefore the bullish sentiment is not the dominant psychology.
There’s a lot going on on this chart. Let’s break it down to what I see…
The daily time frame tells me that while I should respect the strength in the euro, there is a chance that prices will exhaust as the 1.4600 to 1.4650 area comes into play. With an overbought Stochastic (21,1,3) the distribution fade entry is a viable strategy, albeit aggro.
Another option would be to wait for the weakness and if it comes, look for an opportunity to buy into the correction for a swing trade on the uptrending 240-minute time frame.
On the flip side of the EUR/USD swing BUY is a potential 240-minute USD/CHF swing SHORT on a correction higher to 0.8386 which is a very aggressive short sell at the 20 period SMA. The more conservative short sell is waiting at the 0.8415 level but because of the fact that the 0.8400 major psychological level is sitting just 15 pips in front of this entry, I would consider teh 0.8395 level and step in front of the size (and therefore potential selling pressure) that may be waiting at the “00″.