EUR/USD 19 OCTOBER 2011

EUR/USD

Price gave us the bearish cs we were looking for yesterday, trade was good for 80 pips profit. Price then went on to take out the B low giving us a new AB swing in play; this violation of the support A low also initiated a reversal in the 1h trend to bearish. We need price to now take out the B support low at 3652 to confirm the downtrend.

FOR TODAY:

Price is currently at the 618 of the AB swing, we are in sell territory, any clear bearish cs formation from current levels will qualify for a short trade setup with price heading towards the B low at 3652. Place stop above the cs formation, max 50 pips. Limits at the 618 usually attract a 80 pip limit, but seeing that we have a good cs formation on the daily chart we can ST this entry.

SHORT: WILL ONLY BE GOING SHORT IF:

We are already at the 618 of the swing. We will short if we get a bearish cs formation from current levels, else higher up at the 786, this will be a ST with limits set 3530 – 50 on the daily.

If we don’t get the cs formations we are looking for at the fib levels then we don’t trade.

LONG: WILL ONLY BE GOING LONG TODAY IF:

We get down to the BF786 and then get a bullish cs formation, this will attract a limit to the 786 since we would have had a 618 prior. Stops below the low max 50 pips.

If we don’t get the setup we are looking for then we don’t trade.