Trade Idea: EURUSD Possible Bear Trap!
Important note on charts:
It’s imperative to your trading success, you are trading with a broker that offers “New York Close Forex Charts” where each daily candle opens and closes at 5 pm EST. This is essential with trading price action correctly.
Trade Setup Disclaimer:
All my trade setups provided, is not advice or a recommendation to trade or invest. It is solely for educational and general information only.
Don’t blindly buy or sell the Forex markets discussed in this trade setup. Do your own research and always be aware of the risks and rewards.
Potential Trade Setup: EURUSD Large pin bar at a major support area
All charts I provide are of the Daily time frame unless stated otherwise.
Key Levels: Price holds above support 1.1190 with a large pin bar formed.
Price Action Signal: A large bearish pin bar has formed sitting on a major support level.
Chart Notes: The EURUSD recently broke below a major support of 1.1190, to quickly snap back up above again.
With a bearish bias that remains intact and currently price has been making lower swing highs and lows.
With forming a large bearish pin bar sitting on top of the support level.
Potential Trade Idea:
Today I will revisit the potential selling opportunity the EURUSD presents.
Previously I spoke about the EURUSD in this post here, with price breaking and holding below the key level of 1.1190.
Where I suggested to watch for any price action signals to catch any sells with this bearish trend.
The pair was setting up for a nice Forex swing trading strategy entry, but today shows a completely different picture with a possible EURUSD Bear Trap!
I will explain exactly what I mean in a second, but lets first take a look at the price chart below.
So as you can see on the price chart above, there was a nice looking rejection candle created after the FOMC news was released today.
Two reasons why I will not trade this setup.
- The signal has formed back above the key level of structure and not testing the structure from below.
- This signal formed after a high impact news event.
EURUSD Bear Trap
Because of these reasons I believe this could set of a potential EURUSD Bear Trap on this pair.
It could just as well sell of with another nice bearish move to the downside. But I like to have the odds in my favour when taking any trades.
I can’t stress enough here, that patient and discipline is the key to any successful trader. Waiting for the correct signal in the right place is what I strive for as a Forex trader.
Now is your turn:
How are you planning this setup? What are you looking for to catch the next bearish move with this pair? Just leave any question or comments below.