Short positions are covered and it is time to look at the justification for going long here.
#1. When you don't want to be short a market, it is usually time to consider the opposite side of that trade. Because if you don't want to be short, you really are saying that you expect a bounce. You don't have to trade that bounce, but it's important to recognize that shift in thinking.
#2. EURUSD has a level highlighted in bright green where there are 15-16 days at one price, which is just a bit higher than the 15 days level I had labeled before at 107.50. Therefore, this 1.0830 level is an interesting level to go long with reasonably close stops just under the 1.0750 level.
#3. Tuesday (yesterday, May 26), EURUSD had a small "range expansion down day" marked with a purple triangle. These levels are key as resistance and need to be respected, but this is a tiny one which alerts me to a condition known as "seller exhaustion".
#4. Tomorrow is when you want to look for the most dramatic short covering because I think that is how the market will react to a MASSIVE SUPPORT LEVEL like 1.0830 after a cascading drop like we've seen from 1.14656 back on May 15.
Upside potential to the 1.11-1.12 area where there are 12-days of supply. We want to see 1.0917 broken on the upside as fast as possible in the next 1-2 days to confirm. Add to positions as the trade works and tighten up the stop to no more than 1.50 points on a trailing basis.
Tim
10:08AM EST Wednesday, May 27, 2015 1.08663 last
#1. When you don't want to be short a market, it is usually time to consider the opposite side of that trade. Because if you don't want to be short, you really are saying that you expect a bounce. You don't have to trade that bounce, but it's important to recognize that shift in thinking.
#2. EURUSD has a level highlighted in bright green where there are 15-16 days at one price, which is just a bit higher than the 15 days level I had labeled before at 107.50. Therefore, this 1.0830 level is an interesting level to go long with reasonably close stops just under the 1.0750 level.
#3. Tuesday (yesterday, May 26), EURUSD had a small "range expansion down day" marked with a purple triangle. These levels are key as resistance and need to be respected, but this is a tiny one which alerts me to a condition known as "seller exhaustion".
#4. Tomorrow is when you want to look for the most dramatic short covering because I think that is how the market will react to a MASSIVE SUPPORT LEVEL like 1.0830 after a cascading drop like we've seen from 1.14656 back on May 15.
Upside potential to the 1.11-1.12 area where there are 12-days of supply. We want to see 1.0917 broken on the upside as fast as possible in the next 1-2 days to confirm. Add to positions as the trade works and tighten up the stop to no more than 1.50 points on a trailing basis.
Tim
10:08AM EST Wednesday, May 27, 2015 1.08663 last
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