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the big question! Retest or new Lows? for OANDA:EURUSD by shermuelinvesting

Eur/Usd has been trading sideways for a while and i reason to believe that it will break out with the US inflation news.
> Now what i will share with you is something i discover recently and should give more insight on how to trade it
N.B. now for this to work we have to first believe that what ill share makes sense, then we can cipher it.

what we are given:

> channel on 3 day chart

> US Cpi news Wednesday

> clear understanding of eurjpy and usdjpy??????

> 3-day price containment of resistance 1.023 and support of 1.01

>for this purpose, we will define containment as: price failing to close/open above/below the given support/resistance .

> NB price can breach these levels but can’t maintain outside it.

>if price maintain outside these levels, we have a breakout and we trade with the trend.

How to trade this

> choose a bias and pray that it goes in our direction 50/50 chance

or

> we use price action, news, technical analysis and price correlation.

technical Analysis:

> see my explanation of usdjpy & eurjpy then proceed

News:

>us cpi news on Wednesday could determine usdjpy & eurusd next breakout.

price action :

> Usdjpy has the potential to do two things continue breakout (create new highs / break 139) or switch over to form a head shoulder with neckline at 127

> Eurjpy is in a downward channel with next resistance at 140/142 if gets rejected we can see a retest to 133/134

> Eurusd is in a channel R: 1023 S: 1.011 for a while, and with a breakout we could see new lows of .98/.97 or retest of 1.04

price correlation:

NB as eurusd approaches closer to “1” we see the price of usdjpy approaching eurjpy each other

NB since this is an important usd news we can assume a breakout of eurusd

*********************IF NEWS IS INTERPRETED AS GOOD *********************

> we should see eurusd possibly breaching the 1-dollar zone

. We go long and hold for a usdjpy break out

. we short eurusd until it finds a new zone below dollar zone

. we can also short eurjpy 140/142 back to its previous support 133

*********************IF NEWS IS INTERPRETED AS BAD *********************

> we should see eurusd possibly retesting its previous support

. we short usdjpy on bad news

. we go long on eurusd for a break out

. we also short eurjpy at 140/142 region

BRING IT HOME

IF WE CAN UNDERSTAND THE CORELATIONS AMONG THESE THREE CHARTS WE CAN TRADE THEM ACCORDINGLY

WHEN EURUSD APPROACHES 1 THE PRICES OF USDJPY / EURJPY COMES CLOSER

IF EURUSD GOES FUTHUR AWAY FORM +1 EURJPY INCREASE IN VALUE MORE THAN USDJPY

IF EURUSD GOES FURTHUR AWAY FROM -1 USDJPY INCREASES IN VALUE MORE THAN EURJPY

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