yellowlion
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18:00 GMT...Setup Update
10/14 18:00 GMT Although we had a sharp sell to the 21 SMA, it's position in the pattern no longer makes it an entry candidate for this setup. Look to the .618 Fib Retracement or the "sweet spot" if the setup materializes. Remember, the selloff needs to be sharp and fast.
10/14 05:00 GMT I want to discuss a possibility in EURUSD. This is an hourly chart taken about 04:15GMT this morning. It's forming what I call a "Brace" formation. I took this from the brace { in typeface. You see if you turn it with the point down it looks like the current hourly EURUSD. Now the pattern here is big. Most brace patterns are not this size but the setup - if it materializes - goes like this. Price continues higher to the high of the left side of the brace, here at .3784. Then at the high a fast selloff occurs to one of three levels: the 21 SMA, the .618 Fib retracement, or the grey zone pictured in the chart. I prefer the grey zone but any one is a possibility. The ensuing rally breaks the high with the first target the .618 Fib extension. I've chosen the lower point of my Fib retracements at the close/open instead of the reaction low. The choice is yours. Like I said, this particular pattern here is very large and the setup doesn't always occur but if the sharp selloff occurs it's worth a nibble.
10/14 18:00 GMT Although we had a sharp sell to the 21 SMA, it's position in the pattern no longer makes it an entry candidate for this setup. Look to the .618 Fib Retracement or the "sweet spot" if the setup materializes. Remember, the selloff needs to be sharp and fast.
