Trade # 30: EUR/USD Long (Update)

I closed out my second position at 1.2995 for -5 pips. I still hold one position from 1.2700. I will rebuy the second position if price drops to 1.2765, and I will move my stop on both positions to 1.2395. My target is now 1.33 and above.

There are several interesting things about the above charts (the top one is EUR/USD 2h, and the bottom one is USD-index daily). Notice that the EUR/USD traced out what appears to be a truncated ending diagonal. This is confirmed by the clear ending diagonal on the USD-index chart. This implies higher prices very quickly because price has broken out of the triangle.

Second, notice that price rallied in 5-waves after breaking out of the ending diagonal. The indicates a trend change. Price has since been in the process of correcting this move. I think price will break 1.2800 because of the head and shoulders formation and because many stops are probably below there. A target for the low of this move would be 1.2710, where Wave-c=Wave-a, but I am buying a bit higher so that I don't miss the expected follow-through up move. My stop is below the Wave1 low, as a breach of this level indicates that my analysis is wrong.

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