Many of us who took the more aggressive opportunity to sell the USDDKK trade idea (as per our email on the 24th) by placing a sell order on the way of the aforementioned sell level (unbroken of resistance 5.8460
After all, price has been unable to break this level since November 2012, giving us a good probability that it will continue to hold
But yesterday a bearish pin bar reversal closed on the daily, giving an opportunity to the more conservative trader to trade this short. This pin bar is also supported by bearish RSI and Stochastic divergence (on the daily), indicating an underlying weakness with the buyers Vs the sellers.
Even though we do not (yet) have a reversal on the hourly to support this further, this could occur today.
The more conservative traders will simply place a sell order below the low of Thursday’s bearish pin bar reversal with a stoploss above the high (plus spread and an additional spread) , in anticipation of price breaking yesterday’s low.
While nothing is ever guaranteed in trading, the fact that this is strong level (unbroken since November 2012) which price has sharply rejected on two previous occasions AND we how have this additional price action based reversal signal, gives this trade idea a good degree of probability.
_20140926074805.jpg "USDDKK Daily")
After all, price has been unable to break this level since November 2012, giving us a good probability that it will continue to hold
But yesterday a bearish pin bar reversal closed on the daily, giving an opportunity to the more conservative trader to trade this short. This pin bar is also supported by bearish RSI and Stochastic divergence (on the daily), indicating an underlying weakness with the buyers Vs the sellers.
Even though we do not (yet) have a reversal on the hourly to support this further, this could occur today.
The more conservative traders will simply place a sell order below the low of Thursday’s bearish pin bar reversal with a stoploss above the high (plus spread and an additional spread) , in anticipation of price breaking yesterday’s low.
While nothing is ever guaranteed in trading, the fact that this is strong level (unbroken since November 2012) which price has sharply rejected on two previous occasions AND we how have this additional price action based reversal signal, gives this trade idea a good degree of probability.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.