02 Nov

Weekly Trend direction: Bearish

Weekly trend reversal level: 1.5070

Key G7 resistance levels: 1.4830/80, 1.4920, 1.4980

Counter-trend opportunities:

Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.

Today's trade suggestion:
The euro weekly direction has finally reversed to short, after a bearish engulfing weekly candle and a double top at the 1.5060 level. It seems as if we may have broken down through the “rising wedge” formation, which is
always an unstable pattern. Trading has now become a little tricky, as always when a major top is attempting to form, and we may see several sharp swings between 1.4700 and 1.4980 this week. If we are to maintain the
bearish direction, we must remain below 1.4980 – allow for a final test of this 78.6% Fibonacci level before a further move lower. Additional resistance lies at 1.4830/80 and 1.4920. Watch and wait for a clear reversal pattern (possibly quite dramatic) before selling the euro for a move back towards 1.4700 and then 1.4600 on a break lower.

Summary:
Sell rallies to resistance levels after a clear reversal – stops above the reversal pattern – target 1.4700 and then 1.4600.