The uptrend continued on the EUR/USD

Forexmentor.com Forex Trading Price Action

Yesterday, I talked about the sloppy uptrend continuation pattern on the 15 minute chart for the EUR/USD pair, and the fact that it was interrupted by price achieving the expected low for the day (M2), before the uptrend continued. Well, the uptrend did continue on into today’s session, offering up a buy situation at the London open, in the form of Stochastics (STO) being oversold (at the 20 level).

An oscillator like STO is effective in a trending market by using it to look for overbought (OB) and oversold (OS) readings, depending on the prevailing trend. Something to watch out for now is the double form of negative divergence appearing on both forms of MACD – MACD itself and its internal histogram. The histogram is an indicator within an indicator – that indicator being MACD, of course. It is a reflection of what MACD is doing, and MACD is a window on price itself. For more on how to use indicators properly, please go to www.forexmentor.com.

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Commentary on the EUR/USD

Forexmentor.com Forex Trading Price Action

According to the 200 EMA on the 4 hour, 1 hour and 15 minute charts for the EUR/USD pair, well before today’s London open, we were to expect a continuation of the uptrend, as reflected by the 200 EMA. Well, we kinda got a sloppy uptrend continuation pattern form on the 15 minute today, wherein price decided to take out the expected low (M2) first, before heading north again. MACD had already neutralized, but the dumb money put a sell on the euro, after the London open,only to be taken out by a quasi-hammer at the M2 pivot point.

Today was declared an M2/M4 day because the close at midnight ET was higher than the open 24 hours earlier. When you see one of the extremes (M2 in this case) hit, it doesn’t necessarily follow that the other end of the spectrum will be achieved. The M2/M4 paradigm is effective approximately 50% of the time. This is just one of the gems you will find at: www.forexmentor.com

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The pound took quite a tumble today

Forexmentor.com Forex Trading Price Action

The pound took quite a tumble today but, of course, this was all pretty predictable. Last night, the 200 EMA on the 4 hour and 1 hour charts was trending down, and downtrend continuation patterns were also evident at those chart levels, with MACD having neutralized back up to the waterline in each case. Sure enough, price came into today’s session on the 15 minute chart,and immediately met resistance at the central pivot point. Thereafter, it collapsed in a blaze of glory, only to find support at S2.

If you want to know more about price patterns, such as this downtrend continuation pattern, you will find that information at: www.forexmentor.com

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The EUR/USD is in the topping out process

Forexmentor.com Forex Trading Price Action

I’m of the opinion that we have a topping-out process in place on the EUR/USD pair. If you take a close look at the weekly chart for that pair – negative divergence on both forms of MACD. Add to that the fact that the Big Dogs are STILL ever so short the euro, and now they are going longer than shorter the US dollar.

So, from a position trading point-of-view, I’d be looking to be on the short side of this pair. From a day trading perspective, we had a counter-trend move happen yesterday and today, in the form of an uptrend continuation pattern, which can be clearly seen on the 15 minute chart.

On another front, I am completely out of the USD/CAD pair. I didn’t like what I saw on the weekly chart (read 1-2-3 top) and so, cashed in all my remaining chips. Don’t cry for me, though, as I originally got into this pair last September, and added to my position ever since.

This commentary comes to you from: www.forexmentor.com

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