Setups Worth Watching 3/24/11 – EURGBP Update and USDPLN Short Opportunity

Hello. Here’s a quick update to the EURGBP trade setup highlighted 2 days ago:

So far, so good. As planned 2 days ago, I’m currently holding a long position and will look to close it only if the rally fades – hence EURGBP returning into the .86 region.

Another setup worth your attention is USDPLN and here is why

As seen above – the pair stayed in a range for some time now, yet every single upside attempt faced strong selling, so if we compare the recoveries (after reaching the support bottom @2.8250) to the sell-offs around 2.92 (but also lower than that – on the way to 2.92-2.93) it’s quite clear that the sell-offs were more violent and we also have more long tailed bearish candles to confirm that.

Long term support which has been stable since 2008 is now under pressure and, frankly, my gut feeling tells me that it is not going to hold this time – although it will probably take a few weeks to complete a potential break down.

In the weekly chart above I highlighted the fib retrace values of last 2 down legs (A to B and C to D). The pair has been very friendly to long term fib traders – both bulls and bears. Well, now, according to my fancy charts – I think we can project the next target down to 2.3.

My plan is to look for a short entry in the coming days, probably next week – after a potential daily (weekly, even better) close below the 2.8150-2.8250 region. I’ll keep you updated.

Readers from Poland, please share your views. I miss Warsaw, btw :)

Cheers

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Post tags: breakout trading, EURGBP, fibonacci, USDPLN