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.
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