The difference between an Oracle and a Trader is that the first one don't pay for its mistakes. So I look at an Financial Instrument with the eyes of a trader and along with the main scenario I always have Plan B, or even C.I rarely make forecasts for any instruments especially EUR/USD which one is most famous and most traded, but it is happened something that caught my attention and I want to share it with the members of Dukascopy community.There are a lot of political and economical events that happened recently in EU but as a Technical Analyst I don't care much more about them. As Dow Jones said in his Theory : "Every single factor, information that is likely to have influence on both demandand supply is reflected in the market price. "THE PRESENT SITUATION Let's take a look at EUR/USD weekly chart: If it is a real , not fake breakout like it seems it can be drawn between two tops a Downward Trend Line and a parallel Line touching the low. This is a Downward Channel . A major impact on the Price Movement will have three important levels of support.-1/ Support Line = 1,0405 - This is the latest significant Support Level and the Price may continue its Range movement between Support Line = 1,0450 and Resistance Line = 1,1700 ; if not...-2/ Support Line = 1,0000 - This is really a strong psychological level and it certainly will have strong influence at the Price movement ; but...-3/ As long as the Price stay in the Downward Channel there are no objective reasons for changing direction and the next Support Level is too low- Support Line = 0,8000.THE PURPOSE This is Long term outlook and it is non tradable for me but it give me an essential information what type of trader to be- bearish or bullish , when and how to trade. In Downward Channel when the price is below and nearby Resistance Trend Line this is good opportunity for opening or adding short positions . If the Price goes above the channel, the positions should be closed with loss or zero . Opposite- if the price goes down to Support Channel Trend Line it is time to look for taking profits. Sometimes in the Trend the Price may reach unbelievable levels, but the Trader always must stay objective in its judgment and to trade the real market situation. It is not necessary to be right but to act correctly.
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