EURNOK and CHFNOK both have one thing in common. Last week, they broke key levels of resistance before retracing back to test this broken level of resistance as support. Yesterday’s close as a bullish pin bar reversal testing this level could give price action based traders an entry point for a potential long move. This is particularly the case for CHFNOK and EURNOK crosses who defined a turnaround at the multi-year high last week.
Daily chart CHFNOK:
_20141111105343.jpg "CHFNOK daily")
Daily chart EURNOK:
_20141111105431.jpg "EURNOK Daily")
The technical reason is valid. Old support becoming new resistance after a significant breakout and a bullish pinbar reversal marking a potential end to the “phase 2” pullback before what could be a continuation to the upside.
This will be trading with the trend with probability on side. With no key levels in the way from the first target of the previous swing high – this could be a higher probability trade set-up (although with a limited reward/risk potential).
Price action-based traders could play this by simply anticipating the break of Monday’s high and will have typically have a “buy order” above Monday’s high (plus spread and an additional pip) with a protective stop loss below Monday’s low (minus spread and an additional pip). The previous swing high will represent a conservative target. However, a lacklustre reward/risk will deter many.
Remember markets can do anything at anytime and nothing is guaranteed.
Daily chart CHFNOK:
Daily chart EURNOK:
The technical reason is valid. Old support becoming new resistance after a significant breakout and a bullish pinbar reversal marking a potential end to the “phase 2” pullback before what could be a continuation to the upside.
This will be trading with the trend with probability on side. With no key levels in the way from the first target of the previous swing high – this could be a higher probability trade set-up (although with a limited reward/risk potential).
Price action-based traders could play this by simply anticipating the break of Monday’s high and will have typically have a “buy order” above Monday’s high (plus spread and an additional pip) with a protective stop loss below Monday’s low (minus spread and an additional pip). The previous swing high will represent a conservative target. However, a lacklustre reward/risk will deter many.
Remember markets can do anything at anytime and nothing is guaranteed.
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.