Forex Trade Setups Oct. 13th

EURUSD – 1.3800 Holding Upside
After an impressive run off of 1.3150 on Oct. 4th – 1.3800 just yesterday, the Euro seems to be struggling to maintain the upside pressure and is threatening the short term bullish bias.  After rejecting off of 1.3800 with a pinbar setup, the pair has failed to regain the prior highs and has just made a 2nd attempt which was a lower high suggesting the upside pressure is waning.

It could be traders are paring back longs which built up over the last 8 days.  Regardless, 1.3687 holds key for the upside.  Should the market have a 4hr close below this level which would also mean the first 4hr candle to close below the 20ema as well, then we expect further downside.  First targets would be the 38.2% fib of the move at 1.3572 which is 110pips lower.   Beyond this, look for 1.3410 as the next major downside target.

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I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform. As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

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  • Tim Alvner

    Hi Chris,

    As always, great articles and analysis, thanks a lot!

    Just wondering, with my platform (CMC Markets, don’t know if they allow changing the Ichimoku parameters beyond their default) I get a Kumo top on the weekly-candle chart at 1.3836, Tenkan at 1.3847, and a 61.8% fib on the Nov’09-May’10 move at 1.3841 (weekly close basis, not HH-LL, that’s ~1.391).

    Would there be anything to prevent the euro falling back towards the 1.315 level should it fail to make a shorter-term break at 1.384? I could provide the chart but I think it’s likely yours are a lot better anyhow.

    Best regards,
    -Tim

    • Hello Tim,

      Am glad you are finding it helpful.

      In regards to your question, go ahead and add a screenshot of your chart so I can see everything you are talking about visually. This will help me be on the same page and allow me to comment better.

      Will wait for your response and then I’ll comment right back.

      Kind Regards,
      Chris

  • Tim Alvner

    Again, many thanks, sorry about not including the chart. Holding off at least saved me from the latest breakout :)

    http://tkalvner.files.wordpress.com/2011/10/euroichi_w.png

    But yeah, given the breakout I guess I was proven firmly wrong and there’s nothing more than an academic discussion left. (Note: kumo bottom is bugged for some reason, disregard it in my pic.)

    Best regards,
    -Tim

    • Hello Tim,

      I have to step out quickly but I really want to follow this up as soon as I get back as it presents some really good Ichimoku elements that are great for discussion so will be back in about 2hrs and will definitely write back all the subtleties I am seeing here.

      Tis a great example so looking forward to diving into it.

      Kind Regards
      Chris

  • Ok Tim am back now…

    In regards to this chart, it is important to remember price is direction-less inside the kumo which represents support and resistance but also no direction at all so it is never safe to choose a direction when inside the kumo.

    on top of it, notice how price touched off the bottom of the kumo. The fact it did so and followed it up with such a strong rejection was very suggestive it would at least touch the top of the kumo but a breakout is possible.

    oftentime, rejections of the kumo bottom or top (when inside) can often be the marks of a really good reversal.

    Obviously, like all things ichimoku, you need confirmation of this and a weekly close above the kumo would be suggestive.

    Price will have to contend with the kijun next but beyond that, if it were to produce an upward TKx signal, then it would likely return to the prior highs.

    Hope this helps as there are a lot of good ichimoku elements in this chart.

    Kind Regards,
    Chris