How wet can water be? (EUR/USD)
Updated
Ever since I began trading forex it's been apparent that the EURUSD would be the most frequent go-to pair. After all, I live where one of the currencies is relevant (due to my novice understanding of the economy, not because I reside). So this is what we'll do. We'll examine the market from a long perspective and devise a reasonable target. We're going to go over technical tools and what they're telling us.
Above we see a retracement of the overall high and low of the EURUSD . Theres a huge difference between the lowest and the highest (about 75+ cents). The channel I drew is a bearish channel starting October 2008. Channels are ranges of highs and lows that contain parallel resistance and support. If they aren't parallel then you might be looking at a wedge or a triangle, but those are for another day. The channels I mentioned travel down just before reaching the 23% retracement. the only reason we don't assume it's still going down is because it closed above the resistance line, and has hit the 50% retracement line.[ The fibonacci retracement lines aren't reliable when used on their own. They do help identify aggressive price action in the past, as we can see here, but it is one factor out of many.
There is a question mark as to whether this chart is a bullish flag because of it's shape. The flagpole is also perpendicular to the most recent up-trend line.
[A bullish flag formation is a trend line that shows upward momentum, followed by a horizontal or an angled channel. ] If we were to see a continuation of our real-time price above the 62% retracement level (possibly the 78%) we then can assume the length of the first flagpole would be the approximate length of the new one. In support of this 'bullish flag' we can see the price trading higher than all moving averages applied. The only condition is that the RSI has to show some
Now if we take a look at the 4hr chart we can see an inverse head and shoulders formation about to finish it's course and the length of the head is measured (in purple) to predict the immediate price movement. [A head and shoulders pattern consists of a small 'lump' or hill-like shape that is followed by a taller hill, subsequentially followed by another smaller hill. This chart pattern precedes a rally in it's inverse form especially with strong support. An original head and shoulders usually precedes a summit.]
A good fill would be at the end of the head and shoulders AFTER a confirmation candle above 1.255.
Above we see a retracement of the overall high and low of the EURUSD . Theres a huge difference between the lowest and the highest (about 75+ cents). The channel I drew is a bearish channel starting October 2008. Channels are ranges of highs and lows that contain parallel resistance and support. If they aren't parallel then you might be looking at a wedge or a triangle, but those are for another day. The channels I mentioned travel down just before reaching the 23% retracement. the only reason we don't assume it's still going down is because it closed above the resistance line, and has hit the 50% retracement line.[ The fibonacci retracement lines aren't reliable when used on their own. They do help identify aggressive price action in the past, as we can see here, but it is one factor out of many.
There is a question mark as to whether this chart is a bullish flag because of it's shape. The flagpole is also perpendicular to the most recent up-trend line.
[A bullish flag formation is a trend line that shows upward momentum, followed by a horizontal or an angled channel. ] If we were to see a continuation of our real-time price above the 62% retracement level (possibly the 78%) we then can assume the length of the first flagpole would be the approximate length of the new one. In support of this 'bullish flag' we can see the price trading higher than all moving averages applied. The only condition is that the RSI has to show some
Now if we take a look at the 4hr chart we can see an inverse head and shoulders formation about to finish it's course and the length of the head is measured (in purple) to predict the immediate price movement. [A head and shoulders pattern consists of a small 'lump' or hill-like shape that is followed by a taller hill, subsequentially followed by another smaller hill. This chart pattern precedes a rally in it's inverse form especially with strong support. An original head and shoulders usually precedes a summit.]
A good fill would be at the end of the head and shoulders AFTER a confirmation candle above 1.255.
Trade active
My order has been fulfilled @ $1.23229 for the head and shoulders pattern is starting to show it's formation. DXY is a sub-confirmation 
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