EUR/USD Short term and long term setups! Important PA approachinCurrent Picture:
We are in a sustained HTF downtrend with price bouncing strongly off the monthly 61.8 retracement level pulling back
On both the Weekly and Daily TF we are approaching the break of a major CHoCH as it attempts to break the former swing higher low and reverse from its current uptrend.
Analysis and Prediction:
If we create a major CHoCH with strong volume, I expect price to continue its reversal to the downside and after a liquidity pull, continue breaking structure.
However, prior to taking a longer-term short trade, we would expect price to find some resistance at this Weekly TF CHoCH level. And in order for a larger more sustained downtrend in the future, sellers will need to pick up some liquidity and retest Areas of Value like the 61.8 fib retracement level HTF demand zone.
Long Trade:
If we show signs of LTF (15 min) reversal and start creating HL and HH, we will look to enter a short-term long trade that we would take toward our TP of 1.093 (HTF Demand Zone) and could provide us a 2.5+ R:R trade.
Confluence for short-term buy:
1. Large supply zone and major liquidity at former high and 61.8% level.
2. Support at former lower high and potential CHoCH level
Trade Setup:
1. Stop Loss: Below recent lower low and CHoCH level at 1.062
2. TP1: Demand turned supply zone at 1.076 2.05 R:R
TP2: HTF Supply Zone at 1.094 = 6.03 R:R
Short Trade:
If we break and close below this 1.063 level and form a major CHoCH to the downside on both the Daily and Weekly TF, we will watch for volume and price action to confirm its reversal. We will then go to the lower time frames of 2 HR and 15 mins to identify minor changes in character and a good entry.
Confluence for long-term short trade:
1. Golden bounce: LTF pullback in HTF downtrend bouncing strongly off 61.8% Fib level
2. Strong downtrend to breakout of daily trendline
3. Potential Major CHoCH on weekly and daily time frames
Trade Setup:
1. Stop Loss: Above former demand zone turned supply at 1.08
2. TP1: HTF Demand Zone (lines up with -61.8% fib) at 1.022 = 1.95 R:R
TP2: Former HTF low in downtrend at .952 = 5.44 R:R
