Volumes are normally back from this week. Let’s get to it.
I had to zoom right out on this one to make some sense out of it. I like the upside on EURUSD for the time being for a few reasons.
Firstly, the trendline I’ve drawn in extending from March last year has been broken. Secondly, the 1.1450 level which held price down for a long time has been breached and price is trading above it.
Finally, see the big old candle I have marked with the blue arrow? That shows price testing 1.1450 and the trendline and rejecting it. All aboard the short train! But it was not to be, price quickly recovered, and all those shorts were very, very wrong.
Trade: I’d like to see price test 1.1450 and bounce off it. Longs to 1.1620 and maybe even 1.1800.
The UK Parliament is voting on Brexit deal on Tuesday. I don’t usually go in much for fundamentals, but we could see some volatility here.
OK, how do you trade a pair after a flash crash?
I find it helpful to consider what happens during a crash to figure out what to do next. Moves, like we saw on the 3rd, hit a lot of orders that were meant to be triggered in weeks or months but instead were hit in seconds. The market almost gets a bit of a “reset” and now leaves the pair scrambling around to figure out what’s next.
Trade: Price fell hard. I want to trade with that move. But I’d like to see price retest 110.00 to short from that level.
I like a Loonie short from about 1.3330 or so.
Price broke out of its channel to the upside in a parabolic move…and fell hard. I’d like to see a rejection off 1.3330 or thereabouts.