After a small break and a fantastic week in which I tied the knot (got married), I returned to the office today looking forward to see what has happened with the charts and price action. Were there any big moves? How many big breaks, trends or reversals occurred?
In fact, not many 4-hour candles printed in my absence, but the EURUSD did manage to make a sprint up to 1.40 which was followed by a decline back to 1.375. Other than that, many of the currency pairs seem to be hanging around the same level and the market looks awfully quiet. When reviewing the market, there were a couple of pairs that caught my interest. One of them is the EURNZD.
CLASSICAL BREAK & PULLBACK
Last week the EURNZD broke a bear flag or uptrend channel (blue) and then classically pull backed to the same broken channel and 78.6% Fibonacci level before continuing with its plummet – exactly how the DTT strategy subscribes. Great job for those who caught the breakout or pullback! (Let us know down below if you took any of those trades)
DTT DOWN TREND
In the meantime the bearish price action has turned the EURNZD into a downtrend on the 4-hour and daily charts. Our DDT trend indicators (at the bottom of the screenshots) are showing red fields, which means that both the 4-hour and daily charts are in a down trend. When both time frames are trending (in the same direction), then an established trend is in full swing. And this means DTT trade potential! Let us zoom in to review the hourly chart.
The hourly chart shows that the EURNZD down trend was only confirmed recently. This means that our DTT rules are in search of a pullback on a smaller time frame in the opposite direction of the trend, followed by a break in the same direction of the trend. This allows DTT trend traders to stake out a position after receiving a discount within the trend and the confirmation of the trend continuing. Although a break of and pullback to the trend line has already occurred (purple circle), DTT traders can therefore be on the lookout for a trigger candle to print on the hourly chart.
FILTERS AND WOS
Tops and bottoms are always main levels which Forex traders need to keep in mind. In this case the bottom at 1.5760 is a level which needs to be taken into account upon trigger candle confirmation. This level could provide support for price to move back up to the 50% Fib (purple), which would still be a resistance spot as long as price action remains below the trend line (orange). Other than that, there seems to be relatively clear sailing down to confluence of -27.2% and -61.8% Fibonacci targets (orange and purple) around 1.5350 – 1.54.
This wraps my first article as a married man. Hope that the wedding has had a positive impact on my trading and writing skills!! 😉
Thanks for sharing this article with others and wish you Happy Trading!
Latest posts by Chris Svorcik (see all)
- Golden Tips for Improving Your Patience during Forex Trading - March 29, 2015
- Commodity Pairs Showing Strong Signals of Reversal - March 26, 2015
- The Euro Boost and Bullish Momentum Should Fade Away Soon - March 25, 2015
Winner’s Edge Trading, as seen on: