As price creeps towards the hard level of resistance 5.8460 which has remained unbroken since November 2012, a potential sell opportunity looms on the horizon.
After all, price has been unable to break this level since November 2012. The two occasions price did attempt to break the level (level of supply) last year (March 2013 and July 2013), the reaction of price was a sharp whiplash rejection; indicating buyers came quickly back into the market.
While nothing is ever guaranteed in trading, the fact that this happened on the previous two occasions gives us an increased likelihood that it could happen again when price next meets the level.
_20140924083021.jpg "USDDKK Daily")
The more conservative traders will simply wait for a price action-based sell signal to occur, off the level, in the form of a bearish pin bar reversal, doji, double inside bar or reversal pattern on the smaller timeframes and will look to trade this according to strategy rules.
The more aggressive option for some traders will be to simply trade this with a sell order just in advance of the level, with a stoploss above the next significant level (5.9018). Even though this approach may seem to many like getting in the way of an oncoming train, if successful, the entry will coincide with the very start of the move down and the trader will be able to benefit from a “free trade” sooner.
After all, price has been unable to break this level since November 2012. The two occasions price did attempt to break the level (level of supply) last year (March 2013 and July 2013), the reaction of price was a sharp whiplash rejection; indicating buyers came quickly back into the market.
While nothing is ever guaranteed in trading, the fact that this happened on the previous two occasions gives us an increased likelihood that it could happen again when price next meets the level.
Daily chart USDDKK
The more conservative traders will simply wait for a price action-based sell signal to occur, off the level, in the form of a bearish pin bar reversal, doji, double inside bar or reversal pattern on the smaller timeframes and will look to trade this according to strategy rules.
The more aggressive option for some traders will be to simply trade this with a sell order just in advance of the level, with a stoploss above the next significant level (5.9018). Even though this approach may seem to many like getting in the way of an oncoming train, if successful, the entry will coincide with the very start of the move down and the trader will be able to benefit from a “free trade” sooner.
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