Peter Bain Forex Trading Commentary for Friday July 7, 2006

Forexmentor.com Forex Trading Price Action

If you take a look at the daily chart for the euro, you will notice that the most recent resistance line is being tested at approximately the 2830 level. Also, you will see a head and shoulders pattern on an expanded version of the daily chart, as well as on the weekly.

What with this knowledge, and knowing that the Big Dogs are extremely short the euro/long the dollar, it's just a matter of time before the EUR/USD pair continues its trek south. There is obviously some more long dumb money to be flushed out, before this can happen. I know this is trying folks, but nobody said this was easy, except those people who marry the words forex and easy together. My sentiment remains with the commercial traders - on the short side of this pair.

It takes guts to go against the flow, when it would be all too easy to just follow the crowd, but eventually get wiped out.

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Peter Bain Forex Trading Commentary for Thursday July 6, 2006

Forexmentor.com Forex Trading Price Action

With the euro having finished its retracement, the downtrend is back to being in full swing.

Prior to today's session, MACD on the 4 hour chart was bearish-headed down with good angle and separation, and price action was displaying all the attributes of a downtrend continuation pattern. Futher, as at this writing, MACD is neutralizing on the 15 minute, which is always a precursor to leg 2 down to come. Watch out below! You will also notice the behavior of price in relation to the 200 EMA (read, below it), which has a downward slope.

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Peter Bain Forex Trading Commentary for Wednesday July 5, 2006

Forexmentor.com Forex Trading Price Action

I guess all the naysayers out there are now running for cover, given the fall in the euro that got underway at yesterday's London open in the form of a 1-2-3 top. Who could have guessed?

Not even oak trees grow to the sky. Now I'm back on my theme of selling the rallies in this downtrend. We've had three since then - the third happening today, just before the London open.Price advanced beyond the expected high of M3, and then collapsed - all the way down to M1, the expected low. Fun, eh?

Not much oomph left in this pair, methinks. The long dumb money must be hiding under a rock.

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Peter Bain Forex Trading Commentary for Tuesday July 4, 2006

Forexmentor.com Forex Trading Price Action

I am still of the opinion that the euro has further to fall, once the long dumb money get out of the way. I say that because the commercial traders are still extremely short, if you look at the most recent COT data (as at Friday past).

What we are experiencing now is a retracement, before price recommences its trek south. These upward moves in this downtrend are tradable, if you know what you are doing. I don't talk about that much, as I find it tough enough to teach newbies one style of trading (read, selling the rallies in a downtrend), as opposed to intermixing another strategy.

Today, we had a nice reversal at the London open, which happens fairly frequently. Today is an M2/M4 day, and M2 is exactly where price headed after the reversal.

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