Welcome in the first part of the Price Action Setups for the week beginning. A lot can happen on Monday, as the specter of war will probably increase the market’s excitement and volatility. Here we go:
Friday’s closing under 91.00 change the sentiment on the currency pair to the downward one and now we should look for Price Action sell signals near the last support (which is now ressitance).
The pair broke the previous maximum, however fell once again – quite clearly – giving the sell signal. Pin bar candle is upward, but shows a large supply. Remember that you can play such setup in three different ways”
– Sale after braking the minimum, stop loss above the maximum,
– Sale after breaking the minimum, stop loss above 50% abolition of the candle (better profit-to-risk ratio that in the first case where the likelihood of loss is greater).
– Sell limit of 50% candle abolition, SL above the maximum. Better profit-to-risk ratio than in the first case and safer SL than in the second one. However, there is always a risk that the correction will not occur and we will be out of position.
Eurodollar pushed the boast on Friday, approaching the key level of 1.383. The momentum is clearly increasing, but playing long position is risky – due to the proximity of resistance. If the price break the fixed resistance, then at its re-challenge from the top you can look for longs. However if it turns out to be false breakout, that look for short positions.
Another support challenge on the Pound to Swiss Frank may allows us to open another long positions in case of a buy signal. But you have to remember about the risk of breaking this level. Then you should look for short positions only after the PA signal.