Last Week Support / Resistance Trades 23 November 2014
EUR/USD
We had expected the level at 1.2557 might act as resistance as it had acted previously as both resistance and support. Note how these “flipping” levels can work really well. The H4 chart below shows how the price printed a bearish pin bar with a bounce off this level just before Monday's London session, shown at (1). The price moved down to the 1.2450 area and then began to print some bullish price action, shown at the bullish outside candle, marked at (2). This would have been a logical point at which to exit the trade. Note how the 1.2557 area was resistant enough to be the origin of the large move down at the end of the week.
EUR/JPY
We had expected the level at 144.82 might act as support as it had acted previously as both resistance and support. Note how these “flipping” levels can work really well. The H4 chart below shows how the price settled on top of this support level during the early part of last week, before printing a bullish inside candle which immediately broke to the upside with momentum, shown at (1). The price broke clean through our anticipated resistance level of 147.00, but even an exit at that level would have produce a positive reward to risk ratio of approximately 4 or 5 to 1.
