EUR/USD Rides Intraday Rollercoaster

Last updated 12/22/2009 1:49 PM EST (GMT -5) 11 Comments

FX360 Technical Analyst Staff

Technical Analyst, GFT

Although we've seen some rather sharp turns this morning, price action did not come as a total surprise. This morning's intraday technical report highlighted an emerging bearish butterfly pattern along with an alternate approach to trading these Fibonacci-based geometric patterns (see " Intraday Technicals: EUR/USD Again Testing Strong Bear Trendline :). In most cases, we typically look to enter off completed patterns (buy or sell near point D) that are ideally in line with the prevailing trend which is the safer play. Since, in this case, the prevailing trend was  strongly bearish selling pullbacks was more appropriate which resulted in this morning's suggestion that "...More aggressive traders may look to short at market risking 1.4335 targeting 1.4325, 1.4190." After a quick early morning rally to 1.4315, price dropped sharply reaching a current intraday low of 1.4217 just beyond the initial 1.4325 target . This completed the bullish butterfly pattern after which prices began to rally and now are testing 50% CD leg fib resistance.This current pullback may present another similar selling opportunity, so, in a way, we're back to where we started....the safer play now  is to wait to sell off a short-term/intraday bearish pattern ideally near 61.8% or 78.6% resistance.

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Comments (11)

trader

December 22, 2009 at 11:38 PM ET

So the old trade got invalidated when price dropped to 1.4281, right ? Using Fibo, techs yesterday price did not rise as high as 1.4375 ? Why couldn't we have shorted at 1.4335 yesterday, We would have been on the downward rally.

Semaj

December 23, 2009 at 08:41 AM ET

Your instincts were right for yesterday to short & trade with money flow, today larger time frame momentum appears to be changing today and perhaps your bias should be as well. View the link I posted in the 58 comment eur/gbp setup from last week. Use 360's intraday setups in the direction of a larger time frame momentum. Good luck :)

rstojsic

December 23, 2009 at 10:38 AM ET

hi trader, my apologies but i confused could you be more specific, for example, not sure what "old trade" your referring t?.

trader

December 22, 2009 at 11:41 PM ET

now, there is another move up and another bearish gartley pattern at 1.4274. Is that right ? I couldn't get those numbers up above, kinda confusing. Is that what you mean ?

rstojsic

December 23, 2009 at 10:45 AM ET

no, what i meant was to wait for a sell pattern to emerge. based on price action at the time of this article, the most ideal point would be for that completion to come in around 61.8% (1.4367) or near 78.6% (1.4306). And in fact, this morning there was a bearish gartley (albeit a bit sloppy) near 78.6% but there was also a long bar prior to entry which is why I did not put up a sell and decided to remain on sidelines. we've since seen prices spike so oftentimes being patient and waiting for pattern completion in order to enter (the safer play i mentioned in this article) helps to avoid misdirection.

trader

December 23, 2009 at 08:54 PM ET

Price just hit 1.4365. Time at the moment 9:53am morning in Perth. A bit to late, but looks like EU is moving up again on 30 min chart coming close too 21 day EMA before rising.

semtob

December 24, 2009 at 07:20 AM ET

I am in a EUR/USD sell since yesterday and i'm presently down by 100pips,do you think i should close this trade before the durable goods news which is an hour from now

Semaj

December 24, 2009 at 08:03 AM ET

If your lucky we might see a pullback coming to get us to 1.4360 ish before a retest of todays high. Momentum of the recent bear trend has slowed down, hence we are in a pullback of a larger degree. You need to watch a larger time frame momentum indicator to help stay out of trouble. You can't trade & wait for a reply from fx360 about a position and expect success, they are not here for that. I hope this helps. Good luck :)

semtob

December 24, 2009 at 10:20 AM ET

hi Semaj, thanks for your view.It gave me some insight and I have recovered 50pips.

Semaj

December 24, 2009 at 10:42 AM ET

Merry Christmas, no problem, but keep in mind the news release was your ace in the hole today. View the link I mentioned up top in this article, very insightful for independent decisions. Good luck :)

semtob

December 24, 2009 at 10:51 AM ET

hi Semaj, thanks for your view.It gave me some insight and I have recovered 50pips.

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