The EUR/USD had a nice run up earlier this week but it's not moving worth a sou right now. Where's the action? But this is what trading is all about--waiting for another move that will be definitive. Trading is nothing if not about patience and yet patience is the one trait many traders seem to lack. Actually, patience isn't the bon mot. It's too bland. Forebearance would be better--a determined struggle to not give in to negative feelings. How many times has someone bailed out of a trade after the pair waffled back and forth and then watched as it took off in whatever direction one was originally in? Or, getting into a trade, one starts to second guess oneself?
There are various ways to cope with this and I'll be getting into some of them over the weekend. For now, I thought I'd amuse myself by building a word cloud of some of the recent news about the Euro. Isn't that cute?
The first chart is my 3 hour/3 box P&F chart, based on close. It shows the uptrend, an engaging consolidation period, and the pair is now at a key resistance level. If it can break through....but I'm getting ahead of myself. Note the symmetry in time of the last moves up. It evokes the three-drive pattern from which one could expect a break down.
The last chart is the hourly updated from yesterday. One could still make the case for the broadening pattern but there is also the appearance of an upward wedge with its two upsloping lines and multiple touches. However, one could also argue for a pennant.
More important to me is that there has been selling that has come in several times when the pair has achieved this level (take a look at the 15-minute chart). So even in the face of the strong uptrend, I feel OK with my short with its teensy-weensy, yellow polka dotted stop. Remember, I will reverse myself if and when taken out, depending on what the market shows me.
Now I have to remind anyone reading this that these aren't trade recommendations. They're just my musings. All trading carries significant risks the lawyers tell us to say. And you know something? They're right. That's why I keep my stops small.