Tricky move on the E$ yesterday (as far as I am concerned) as it took a deeper dip to test the rising trend line (see graph). Admittedly, it was one of those days where I was caught off guard by the move and was almost swayed once it broke through the 1.2950/60 level. However, I am so glad I stucked to my discipline. That is, in the event when stop is triggered, do not jump back into the market on impulse, emotion must be controlled. Take time to analyze the latest technical signals as per how I would each and every single time especially when the move was unexpected. That premature bullish divergent signal I mentioned in my update prevented me from turning short. Not trying to be philosophical here but to share an important lesson to learn.... one can only get profitable only after you know how to limit your losses.
Update of the order book this morning revealed the following:
Stop loss: 1.2880, 1.2920, 1.3000 and 1.3010
Technically, intraday momentum has turned and broken higher on the back of the bullish divergence. With a close back above the daily MA21 again, a "doji" candlestick pattern was formed. These signals have increased the probability for higher E$ today. As long as E$ stays above the rising trend line (see graph), the prospect of 1.3170 being retested remains realistic. However, one has to be aware that EURAUD does look heavy for now.
For today, I would attempt again to buy the dip with risk to just below yesterday's low of 1.2920. Expected trading range 1.2960/70 to 1.3010/30 (1.3030/40 stronger resistance).
All the best!
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| E$ 8hourly chart - If this trend line holds |
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