Peter Bain Forex Trading Commentary for Friday September 1, 2006

Forexmentor.com Forex Trading Price Action

Today's the big day, what with the Non-Farm Payroll report coming out. Technically, we're in a potential downtrend continuation pattern, with MACD having neutralized on the 15minute chart. Surprise, surprise, the NFP report has just come out, and the euro has tanked. Who could have guessed?

Leg two of the downtrend continuation pattern has kicked in. The dumb money are running for cover - fast quick. Of course, yesterday, I was beating the same old drum I've been beating since June - watch out below!

Naysayers be damned. I've taken a lot of heat for remaining on the short side of the euro, but I am in good company - with the Big Dogs, who rule the world, when it comes to the currency markets. Let's wait to see what the COT report has to say later on today. I suspect they will be as short as ever.

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Peter Bain Forex Trading Commentary for Thursday August 31, 2006

Forexmentor.com Forex Trading Price Action

There's not much to report today, other than the fact that the dumb money are alive and well - determined to drive the euro higher.

I see this almost as a last gasp, before the euro heads south again. I expect that we're going to see some sanity creep into the markets, as we head into September, when some of the smart money comes back on stream. In the meantime, we let the dumb money have their day. The day of reckoning is rapidly approaching. If you believe the euro is going to break the sound barrier, then I'll introduce you to my fat friend at Christmas time who wears a red suit. If you take a look at the daily chart, you will notice the euro running into some pretty heavy duty resistance at the 1.3 level. I will sure eat crow if it ever penetrates that level, but I'm betting it won't. Any takers on that? I'm in for a Snickers bar. Not sure of the spelling on that one, but close enough.

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Peter Bain Forex Trading Commentary for Wednesday August 30, 2006

Forexmentor.com Forex Trading Price Action

The summer doldrums continue to dog us. The euro is languishing - mired in congestion, with the Big Dogs capping any upside potential, and the dumb money fuelling the rallies. If you really think about it, good trading opportunites abound - selling the rallies and/or trading the retracements. It's all so predictable. The euro doesn't stand a chance of growing to the sky, given that the Big Dogs are extremely short. But, don't tell the dumb money that. They're on the long side, only to get blown out, when each rally fails. You'd think they'd eventually get it. But, that's why they're called the dumb money. They'll jump on any piece of news, without really knowing what the big picture is all about.

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Peter Bain Forex Trading Commentary for Tuesday August 29, 2006

Forexmentor.com Forex Trading Price Action

If you take a look at the 60 minute chart for the euro, with the 200 EMA plotted, you will clearly see that the trend on price action was down, coming into today's session.

Selling the rallies in the downtrend becomes all the more obvious when you plot STO (Stochastics - Slow), and witness the peaks in relation to where price was with respect to the 200 EMA. We had a turnaround today at the London open, facilitated by negative divergence on MACD to price (same yesterday). The Big Dogs are still heavily short the euro (and the pound), and this augers well for a swoon at some point - possibly to the 2480 level. This is supported by Elliott Wave Analysis (a la Doug Rawson, one of our members).

Patience is called for here, as we are still in the summer doldrums, and could be until mid-September, when everything returns to normal, and people are back from their vacations.

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