Similar Retracement Pathway Planning for the Euro EURUSD
As I highlighted this morning in the S&P 500 “Pullback Pathway Planning,” we’re seeing a similar situation develop in the EUR/USD FOREX pair.
Let’s take a look at the Euro’s break to new highs and the potential pullback – or alternate breakout – strategy planning.
Like the S&P 500, the Daily Chart reveals a pause or reversal candles developing into the upper Bollinger Band into a known resistance level (1.39000).
Actually, the 1.38000 pair level served as key resistance ahead of last week’s upside breakout which brings us to the current “will it retrace or will the breakout extend?” planning scenario.
A logical pullback or retracement down against the 1.39000 level suggests that 1,38000 (almost achieved) then perhaps 1.37500 could be achieved.
Let’s strip the chart of indicators and focus on the pure price trend structure in motion:
We see a prevailing and strong uptrend into the current highs, but we also note a persistent swing structure to the trend.
In other words, the trend has been relatively stable with few impulsive or sustained (extended) swings.
With price trading into the upper rising channel trendline, it would be logical – though of course not guaranteed – to see yet another pullback down away from the 1.39000 level.
Also like the S&P 500 planning, a continuation of the uptrend (without a logical retracement) suggests that the Euro would continue to extend and impulse higher against the US Dollar.
Here’s the intraday level planning to watch closely:
From the pure chart perspective, a break down under the 1.38500 level suggests that the Euro could trade down (retracing on the higher frame) from 1.39000 toward the trendline and triangle target just above 1.37500.
Note the red “dominant” price pathway planning along with the green “alternate breakout/trend extension” pathway along with the yellow caution or range zone developing in the FOREX pair.
Structurally, it’s still similar to the S&P 500’s short-term range pattern intraday and the potential for a strong, trend extension breakout that would defy classical chart logic (which suggests a pullback from the highs is more likely).
Note key levels and adjust accordingly to the dominant/logical thesis or an alternate breakout outcome.
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey’s new book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
Hi there, You have performed a great job. I’ll definitely digg it and personally recommend to my friends. I am confident they will be benefited from this website.|