on Friday. We are out of this hypothetical trade at the moment,
since it hit our profit target. But we will continue to monitor
the charts. Here is the 30-day hourly chart with Fibonacci
retracement levels for the fall from the peak of 1.5988 on
4/22 to the low of 1.5324 on 5/2.
If the Euro did put in a short-term low on 5/2, which I
think happened due to the volume spike similar to the
one on 4/18, then we may see it retrace according to
the levels shown in the picture. But that is not my
point here. I want to show what the inflection point is.
In this example, the inflection point or pivot is quite
clearly the 50% orange Fibonacci line. This does not always
happen, but when it does, it is a VERY STRONG resistance
level. Our next hypothetical Euro trade will start forming
when it tries to come close to this inflection point.
Remember this is the same point where we placed our
original stop ( we placed it just above it to be safe
from noise ). It is at 1.5650-1.5700. That is the resistance
zone.
Of course it is entirely likely that the Euro will continue
its descent. If it does, we will wait to see what happens
when it approaches 1.5273, a swing low from March 23.
If it breaks this swing low on volume, we will be back
in the trade aiming for the 61.8% retracement level of
1.50. We will make that trade when it dips below the
50% retracement level of 1.52 for the 2nd time, similarly
to the way we did our trade on the break of the 1.5604
low.
Here is the chart showing the swing low of March 23.
Thanks for your viewership!
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