What can you say when the price action is ___________?
I look at the EURUSD price action (i.e chart) and I see a continuation of up and down uncertainty. Traders are turning their bias around and around and around. That helps to create a picture where there may be false breaks. For example, when the price went below the 200 day MA last week (lower green line) it failed to lead to more selling. Instead it found support against the end of August lows and rebounded higher.
More recently, the price moved above the trend line earlier in the week and that too was a messy break. The price came back lower in trading yesterday.
What about today?
Well the 100 day MA and the 61.8 retracement line held at the lows (see green circle 3). Traders stuck a toe in against the area and they were rewarded with a move back higher.
What about the upside today?
Well the old topside trend line - despite its two failed breaks - still gets my attention as a level to lean against from the sell side. Pips are hard to come by, so the hope on the trade is that if we squeeze a little higher and lean against a risk defining line, at least risk is limited if there is a break (stop on a move above). If the level holds, perhaps there is a move back toward the 100 day MA line once again.
In between, flip a coin (i.e. in the yellow area).
In these markets where the action is __________, you have to go with the flow, pick your spots and hope for the best while limiting your risk. Alternatively, sit and wait for better day's ahead.
