The pound is putting in another downtrend continuation pattern

Forexmentor.com Forex Trading Price Action

Well, here we go again. It looks to me like the pound is putting in another downtrend continuation pattern on the 15 minute chart, what with leg one in place, and MACD having neutralized back up to the waterline. What was important to me last night, well before the London open, was to see the 50, 100 and 200 EMAs all coming together to form a ‘Death Cross’ (which is bearish, by the way). Price came into today’s session, and found support at the central pivot point, before heading up to M3 – the expected high for the day (this being an M1/M3 day). Subsequently, price collapsed, and is weakening further as I write this piece. Pattern recognition is something you should bone up on, if you are not already familiar with what that is all about. I talk about it often enough that you should see by now that it is a powerful tool to help predict where price is going. Pattern recognition will even tell you how far price is going to go. Check it out in the members’ area at www.forexmentor.com. Merry Christmas to you and your loved ones. The next AM Review will take place on Wednesday, December 27.

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The euro has topped out and the Canadian dollar has more gas in its tank

Forexmentor.com Forex Trading Price Action

Now, repeat after me … “I have seen a downtrend continuation pattern before, and I know what MACD neutralization is all about. I know it will make money for me every time. As a matter of fact, I also know that there are three other patterns that are money-makers too: up-trend continuation, downtrend reversal and uptrend reversal. These patterns don’t occur all the time but, when they do, I immediately know what to do, because Peter showed me the way.” Seriously, folks, if you don’t know about these patterns by now, then check them out in the members area at www.forexmentor.com. Last night, well before the London open, the AUD/USD, EUR/USD, and GBP/USD pairs were all setting up for a fall (a.k.a. downtrend continuation pattern). Likewise, the USD/CAD and USD/CHF pairs were both destined to rise (a.k.a. uptrend continuation pattern). That’s five trades for the price of one folks! Why not take them all, when you see them unfolding? It’s called ‘Ka-Ching Time.’ Easy money, all the way to the bank. These patterns happen often enough that you should have them on a wall somewhere near your computer, as a constant reminder for you to be on the lookout for them. Price pattern recognition is one of the easiest forms of trading – quite literally, a no-brainer. I still maintain that the euro has topped out, and that the Canadian dollar (a.k.a. loonie or USD/CAD) has more gas in its tank. Would I lead you astray? Oh, and before I forget, it’s pretty safe to be in a trade before news time, while a pattern is unfolding, as it pretty much presages where price is going, after the news comes out. It’s called ‘following the smart money, who already have the news figured out ahead of time.’ Merry Christmas to all our wonderful members and members-to-be. See you tomorrow, the last AM Review day before that fat guy with the red suit shows up on your doorstep, or gets stuck in your chimney.

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The Big Dogs are extremely short the euro - my bias is inevitably to the short side

Forexmentor.com Forex Trading Price Action

Well, okay, I was wrong yesterday. I can’t be right every day. Sure would be nice. I beat the ‘sell the rallies drum’ a little bit too early. I was on the right track, but there were two more rallies to come on the euro (EUR/USD pair). Arggghhhhh … Last night, we had the 200, 100, and 50 EMAs all layered in the right order on the 1 hour chart – top to bottom – confirming price weakness. Plus, we’ve had a succession of occurrences of negative divergence on MACD to price. I felt that the ‘rally of all rallies’ wasn’t too far off. And, sure enough, we had a falling off, coming into today’s session, prior to the London open, in the form of a retest of the high, towards the end of the previous session (Tuesday, just before midnight). Lest we not forget that the Big Dogs are extremely short the euro, long the USD. With that always top-of-mind, my bias is inevitably to the short side. And, when a currency pair is topping out, it’s easy to jump in too early. Successful traders spend inordinate amounts of time picking tops and bottoms. That’s where the art in this business really kicks in. If only we could find a crystal ball to do that, we’d be away to the races. A good invention for somebody. So, the wind has finally been let out of the sails on the euro – at least for the time being. Price is falling off, as I write this. I still say the overall top was achieved at 4 pm ET, December 4. I can be judged on that, and will be for sure. For more, beyond my rambling here, get the straight skinny on the facts in the members area.

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We topped out on the euro

Forexmentor.com Forex Trading Price Action

The euro started its ascendancy in the early morning hours today towards the end of the Asian session. It rose right through the London open, and remained high right through the news hour. I just see this as a ‘dumb money’ rally – doomed to fail, and representing a good short opportunity. Negative divergence on MACD to price on the 15 minute chart finally kicked in post-news. Price was also bucking the overall trend, as reflected by the 200 EMA on the 1 hour chart, and the 50 EMA on the 4 hour chart – price being repelled by each EMA respectively. As far as I am concerned, we topped out on the euro at 4 pm ET, Dec. 3. This is pretty much consistent with the Big Dogs being extremely short the euro, long the USD. Sell those rallies folks, and enjoy the ride down. For more on what to look for trading currencies on the forex, join the members at www.forexmentor.com where you’ll find the latest and greatest ideas the pros use.

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