Thursday, October 7, 2010

Skeleton Shift Update: EUR Technicals Update - OCT 7, 2010


Summary of current Action:

The Assault to the 1.40 level is on its way with a 70 pip Hourly candle at 2PM. Luckily our 70 pip trail was only a Day order as our trail rest at the 3940 level and into Asian trading the EUR/USD dropped below 3870. On the Hourly that happened at 10pm which led to an hourly doji like candle which led into the 2am move up. Such a strong move to start the morning means to follow the trend into NYC open. 1.40 will touch and then we will have to see how the retest goes. Psychologically a strong trading above with a pull back leaves room to pyramid.



7 day SMA + 20 SMA + 50 SMA are all great indicators on the the hourly for short term entry points. 20 and 50 SMA's confirmation of continued upward price pressure with the 7 SMA used for timing.

Post US equities close the EUR started to trade below the 7 SMA but above the 20 SMA and when prices on the touched the 20 SMA we saw a the start to a strong price reversal. By 2am prices started to trade above 7 SMA and shot up from there.

On the Daily chart the perfection formation of the 50, 100, and 200 is hard to argue against for continued price direction


Fibs don't lie (ha ha get the irony?) Anyway, the 61.8 fib (drawn from 1.51 to 1.19) was blown out of the water. This is similar to price action blowing through the .236 and .382 level before correcting. If price action is similar, we will see current prices trade above 1.408+ before a significant correction (significant = 500+ pip correction).

If prices do want to correct 500+ pip with strong trading above 1.408+ or higher, that would only make the move to 1.50 more viable or sustainable. Technical analyst are all over the 1.35 support level which would be key for a bull argument to hold on a monthly basis.

Trend Strength:

ADX on the Daily:

This can last for days in the 75 range, even if ADX starts to trend on a downslope the upwards price trend can continue to higher highs, ideally, in a narrowing range. ADX daily shows continued strong upward trending

Strategies Recommendations:

For Entries look for decent price corrections on the hourly or ranges of consolidation where you are getting bullish crossovers on the MACD. Try and get multiple confirmation with long lower shadows on hourly candles or RSI support on the 30 min chart. This timed entry maybe complete BS however because in strong trends the indicators will make no sense, which is why its better to use this type of entry on strong moves down which indicators make clear moves that may coincide with price direction.

Watch the 1.40+ price action and the 1st test to look for opportunities for pyramiding for already existing positions. Keep the tights rather tight in case prices do want to strongly correct to the downside.


For those who been actually following the blog, yes I do STRONGLY feel a correction is needed on a fundamental level, however, last months trading has humbled me and made me re-learn what I should have already known. Trade with the trend! So for consistency I believe there needs to be a dollar correction, but obviously thats not how I will be trading it.


No comments:

Post a Comment

This Blog has been developed by Analyze Capital LLC, and as an independent organization we provide “AS IS” information without warranty. The ideas and opinions expressed by the contributers of this blog are personal and do not represent the actions or policies of Analyze Capital LLC. The contents of this blog do not intend to assert recommendations or to offer advice of any kind. We are not responsible the consequences, be they gains or losses, that may result from using any of the information from this blog.