Recommendation: SELL SHORT, THEN GO LONG FROM LOWER LEVELS

Current Trend: Short- and med-term up. Long-term sideways.

Strategy: Sell short now for a quick drop, then go long from 1.1590 level. 

(Daily)

Chart Setup: The euro is consolidating in the very short-term and testing line 1 support, its prior breakout level. I'm looking for more downside, to line 3 for going long again.

• Its short-term Stochastic is not oversold yet, so further pulling back is likely.

Strategy Details: Sell short at current levels for a quick drop (for aggressive traders).  Then all traders to go long again on a reversal day/candle up from line 3 (1.1600-15.80 level).

• Note, if it closes above line 2 first, that will also be a buy signal (i.e. a close above 1.1850).

Target: A drift down to line 3 (1.1600-15.80 level). Thereafter, look for a rally back to new recovery highs above 1.1909 i.e. closer to 1.1950 and the round number 1.2000.

Stop-loss: For a short position, the stop is close above 1.1850. Then from 1.1620 lower the stop to a breaking of its prior one-day high. For going long lower down, the initial stop will be below 1.1480.

Wishing you profitable trading until next time.

Colin Abrams

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