EUR/USD 26 JANUARY 2012

EUR/USD

Price rallied yesterday and took out the B high so we have a new AB swing in play.

FOR TODAY:

We are currently at the B high, so we can sell at current levels after a bearish cs formation, or buy down at the 618/786 of this AB swing.

SHORT: Will be going short only IF:

We are currently at the B high, we don’t have a decent swing low in place but if we get a bearish cs formation at current levels or at the open of the UK session then we can trade short. Stop 14 pips 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 retrace 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.