EUR/USD 24 JANUARY 2012

EUR/USD

Price rallied yesterday and took out the B high on a closing basis, so we have a new AB swing in play now.

FOR TODAY:

We can once again only sell up at the BF786 – after a bearish cs formation, or buy down at the 618/786 of this AB swing.

SHORT: Will be going short only IF:

We need price to rally to the 3038 (If 2987 remains the swing low) price level and then give us a bearish cs formation for a short entry. Trade this for 60 pips since it’s a shallow bounce i.e. less than a 382, stops 10pips + spread above the cs formation, max 1.5% risk.

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

LONG: Will be going long today only IF:

We need price to fall to the 618/786, then a bullish cs formation for a long trade setup.  Stops 10 pips below the low of the cs formation, max 1.5% risk. The limits for the 618 entry will be 60-70 pips, and the 786 entry will be a ST to the BF786.

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