EUR/USD Nearing Resistance?

Discussion in 'Forex' started by swingtrdrt, Mar 21, 2011.

  1. It looks like 1.4250 is a major level for a lot of traders. The ascending triangle that formed since 3/7 had a width of about 250 pips with the breakout at 1.40.

    Watch for a lot of profit taking and congestion in this year. All models I'm looking at seem to agree with that notion.
  2. I`m looking at this level myself.

    It will be interesting to watch this pair during the week and see if resistance becomes support.

    If not, it might be a nice opportunity for a short.
  3. Joman


    70% of retail traders are short if you look at Oanda's book, the trend is up (LH and HH in almost every TF from 15min to weekly) and the price action doesn't show any single sign of reversal.

    We had a similar situation in USD/JPY lately when everyone was trying to catch the bottom around 80.

    The trend is your friend :)
  4. Agree, Joman.

    Too early to make a decision yet. The trend is still in play.

    But, if price slows down here and dips below 1.4200, I might be interested in a short.
  5. Good point, but be careful with that assumption. You are assuming that 50% is the average of where it would revert to over time (or assuming a cross of 50% would be indicative of trend change.

    The truth is really that the average EURUSD position among retail traders is a net short position somewhere around 60% over the last year. It's a relative indication. Also, with tops over the last year, it's never been about buyers coming in, rather sellers stabilizing and going out, which is something we've seen since the beginning of March. And the resulting bottom thereafter has typically occurred 2-4 weeks after the retail positions became net long.
  6. It may not mark a longer term top, but it is a great level for a quick bounce. Sell 1.4280 target 1.4160
  7. GrovChiri


    I've been beta testing some pretty cool software (similar to prediction technology, but a little more sophisticated). Needless to say, based on a number of iterations that I've run, the price action and prediction candles seems to agree with the idea of this being at/nearing a short-term top. While it doesn't indicate a big sell-off is coming, it indicates consolidation and minor selling. Hopefully the software will be out of beta soon so that screen shots can be posted).

    Personally, I will be building a short position soon (only have the last leg of my long to get rid of); staggered based on A/D and volatility. I won't be building pre-break, rather post-break resistance.
  8. GrovChiri


    Nice. I shorted size in front of the the target level 1.4250. I grabbed 50 pips on my 1st leg and 60 pips on my 2nd leg. It happened just like this software said and like you guys were saying. Made my month! Cheers.
  9. Nice trade there, glad to hear. I'm only short a half stack from average of 1.4232. I'm holding for a break of the 1.4180 level though I won't be shy of cutting it on a stop run higher.

    The 2 support levels I see are 1.4150 and 1.4050. I'm looking to kick some at 1.4150 and re-evaluating there.
  10. Levels were very reliable this time around. I kicked some at 4150 and kicked the rest in front of 4050 in the 70s.

    I'm looking at some congestion ahead along with consolidation.
    #10     Mar 24, 2011