Hourly chart strongly broke above 1.1119 resistance and had good follow through on Friday. This breakout followed strong breakout on Thursday. However, this breakout is still within the trading range of last 4 weeks. Weekly bar currently overlap last 4 weekly bars so this could be a test of the top of the range. As majority of breakouts above trading ranges fail so betting on breakout failure is more profitable strategy than betting on breakout success.
On hourly chart, there is a wedge (3 push movement) which poked above the wedge at 1.1181 and strongly reversed down. As one reversal was not enough to reverse the strong bull spike so second attempt was very likely. Second attempt also failed by giving doji bar as a weak signal bar. Aggressive traders certainly went short below doji (including myself) but conservative traders waited to see next hourly candle which was strong bear candle. So, bears will be looking to short 1 pip below the hourly candle with STOP LOSS 1 pip above the bear candle. As doji was a signal bar (though weak signal) as well so it is better to place stop 1 pip above doji bar as comparatively more sellers will be lookingto defend that level. In addition to this, top of wedge is testing the resistance level so it seems highly unlikely to break above it without some retracement.
In addition to wedge, hourly chart is also in broad bull channel. So it is much more likely to test the lower band of channel next so that make it another reason to take short.
When stops are too far away then traders try to scale out to protect their open profit and that push the prices down as well. Bulls have their stops at two possible locations, 1.1103 or 1.1068/1.1074.
In addition to this price is far too stretched (look at 20EMA) so price has to consolidate sideways to down before bulls can attempt another breakout above 1.1197.
ENTRY: Short 1 pip below Friday closing price (Based on your broker it might be different)
Target: 1.1120 but active trade management required as price is expected to find some support at 1.1147-1.1153 area
SL: 1 pip above doji bar (second last hourly candle on the chart)
On hourly chart, there is a wedge (3 push movement) which poked above the wedge at 1.1181 and strongly reversed down. As one reversal was not enough to reverse the strong bull spike so second attempt was very likely. Second attempt also failed by giving doji bar as a weak signal bar. Aggressive traders certainly went short below doji (including myself) but conservative traders waited to see next hourly candle which was strong bear candle. So, bears will be looking to short 1 pip below the hourly candle with STOP LOSS 1 pip above the bear candle. As doji was a signal bar (though weak signal) as well so it is better to place stop 1 pip above doji bar as comparatively more sellers will be lookingto defend that level. In addition to this, top of wedge is testing the resistance level so it seems highly unlikely to break above it without some retracement.
In addition to wedge, hourly chart is also in broad bull channel. So it is much more likely to test the lower band of channel next so that make it another reason to take short.
When stops are too far away then traders try to scale out to protect their open profit and that push the prices down as well. Bulls have their stops at two possible locations, 1.1103 or 1.1068/1.1074.
In addition to this price is far too stretched (look at 20EMA) so price has to consolidate sideways to down before bulls can attempt another breakout above 1.1197.
ENTRY: Short 1 pip below Friday closing price (Based on your broker it might be different)
Target: 1.1120 but active trade management required as price is expected to find some support at 1.1147-1.1153 area
SL: 1 pip above doji bar (second last hourly candle on the chart)
