Kumowizard

EURNOK - Start to watch for a counter trend short

FX:EURNOK   Euro / Norwegian Krone
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After Norges has become dovish again, the 4 months bearish trend got killed with an agressive break through the trendline and the Kumo. Since 19/June NOK has been hit badly, but the candle of 3/July shows 8,50 is a good resistance.

Daily: The big picture is bullish as not just the price but all Ichimoku indicators are above the Kumo. However the above mentionned huge hanging man candle + Slow Stoch , MACD and the high ADX reding all suggest EURNOK may enter into an interim top building phase here in short term. I think it will happen in 8,41 - 8,47 range.

4 Hrs: The setup is still bullish here, but with a weak bearish Tenkan/Kijun. Now we ave to watch how price will behave in next 2-3 days. If bullish momentum can not accelerate again and price trades below the Kumo, 100 WMA and also clears the important 8,39 support level , then there will be a chance for a counter trend move down to 8,29-8,30, retesting the daily Kijun Sen. Keep in mind that a dip to 8,37 on the current or within the next 3-4 candles could be misleading, as those would not yet mean a lower break of the Kumo and 100 WMA , and that dip would likely be bought at first. Also 4 Hrs Slow Stoch is just turning up right now from oversold. So the optimal setup should come in later, after some "sideaway' moving between 8,40-8,45.

If you try to put this trade on, be very careful with position sizing and also with timing. First I would rather try to catch a spike and sell a smaller clip ard 8,47, to get better risk/reward ratio, based on the relatively high stop loss level (above 8,52). However I would only be comfortable with the entry and the short trade, if we had the above mentionned or even more 4 Hrs bearish critera matches.

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