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This is my last trade analysis and recommendation for 2011 and the first for 2012.
According to my analysis I have reason to believe that Eur/Usd has made a bottom and is ready for a multi day or multi week rally of a few hundred pips.
Let’s take a look at a daily chart to help you understand why I expect the above to occur:
I’m basing my expectation on various indicators and signals. The fact that my analysis is confirmed by multiple indicators makes this a high-probability trade.
1- The positive RSI divergence:
Back in Nov and Dec last year there was a similar positive divergence with price action and the RSI. This resulted in a multi month rally of almost 2000 pips! Currently there seems to be a similar divergence between price action and the RSI.
2-The MACD Histogram:
The daily MACD histogram has just crossed over above the zero line and this often results in at least a few days rally if not more
3- Slow Stochastics:
The slow stochastics indicator has recently dipped below the 20 level and crossed to the upside. This is usually an indication for a rally.
Trade Recommendation
I recommend going long Eur/Usd at market (1.3065) with a stop below 1.2920.
Target 1: 1.3180
Target 2: 1.3390
Target 3: 1.3600
Keep your stops in and your emotions out of this trade as with any trade.
Still holding this long position, stop below the last low of 1.2890.
These are thin holiday markets and I believe this is a squeeze to get rid of any long posittions before heading up.
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I seem to be right about the squeeze to push out any longs.
Currently trading at 1.2975. Still holding this position, stop at 1.2850, targets still over 1.32, eventually 1.35
[Reply]
The official holidays are now over with yesterday (2 jan) being the last day the markets are closed.
I’m still holding this trade, currently Eur Usd is at 1.3025.
Targets still 1.32, 1.34 and 1.36 in the coming 2-3 weeks.
[Reply]