EUR, You Surprised Me!!

Good Morning Dynamic Traders

I have to be honest in saying that I am fairly surprised that the EUR smashed through the trend line. Let’s have a look and see what happened!

Yesterday I showed you on the 4hr chart price dropped to a Fib breather level. In the hour chart below I have marked out the same Fib breather level, price used this breather to relax before it tackled the trend line. The candle stick that broke through the trend line closed just above the trend line and then price was using the trend as a support line instead of a resistance line.
A big factor that helped price to break the trend line was the RN. After price broke through the trend line it did start to drop, but the support line at this RN helped to catch price from falling back below the trend line.














I was surprised that price beat the trend line and didn’t fall back down and continue the downtrend, because price has tested the trend line 4 times which demonstrates the trend line is fairly strong. We also have MACD Divergence on the hour chart making us away of a reversal, but the reversal happened above the trend line and price only dropped to the RN just above the trend line.

The answer to my question yesterday is now slightly irrelevant, but for future use on other charts I will still give you the answer! The answer really depends on how aggressive you are and depends if you have the free time to manage the trade as you need to be ready to close the position in case price was to drop after hitting the trend line.
I personally wouldn’t take the long position, because I expecting price to reversal at the trend line and if you look previously on the 4hr chart price hasn’t always hit the trend line before reversing.
However a long would have meant serious profits as price did beat the trend line.

I look forward to tomorrow to see what price does today.

Till Tomorrow, Happy Trading

Richard Monnery