Note: before reading the updates, Please kindly read the previous entries to understand the whole blog.
1. Descending Triangle in a downtrend. Which suggest a reversal
2. Bouncing last 8/29.
I was short with this pair but after confirming the bounce. I closed the trade with a loss and re opened the trade for a quick 30 pips profit to compensate the loss.
I'm getting out of this trade until further confirmation and if we see already a clear trend.
This is still high risk due to the general trend is a downtrend.
If you have any questions,comments and suggestions Feel free to leave a message in the "ask the trader button" .
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I will now discuss the 2 views of the 1 hour chart.
1st view: THE OVERVIEW:
Observation: The market started to show its collors and showed that it want to confirm the reversal Pattern.
Update August 31,2012
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| 1 hour chart overview
The overview of the 1 hour chart shows the descending triangle in a downtrend. It is 1 on the reversal patterns and may show that the market bottomed up and preparing for a reversal. A very scary image for the shorts. The question is .. WHEN?
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| 1 hour chart Zoom for 6 days |
1. The 4 day resitance (short term)
2. Previous 1 week support turned resistance
I believe this is the early resistance we can establish for this pair.
For Weekly traders like me, We considering that we only have 2 days remaining, We have to respect the immediate resistance.
the 4 hour chart may short that this pair wants to consolidate before heading higher price. It needs to take out all the shorts first before entering another face of reversal.
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| 1 day chart
Looking at the bigger picture. I believe it is looking to establish its support for a 1 month consolidation stage. We remain the support at .98345. breaking that will give us a clear view where it wants to go, which is lower. But for now. keep your Stop loss tight.
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Update: August 30,2012
Market Current in Consolidation stage waiting for the QE3.
Current Market Indicators: 50/200 ema still in sell pressure.
In this daily chart, Level .98345 is the main support. Breaking this will give another window for shorting this pair. with stop loss above the current support around .98345 level
The 4 hour chart shows tha clear downward channel> MACD is below 0 which confirms the nes direction of the market based on the 4 hour chart. 1st stop loss is at 200 ema and 2nd stp is above the 50 ema.
Zooming closer to the trade. the 1 hour chart shows NEGATIVE divergence and a bearish 50/200 ema cross which gives more negative pressure to the pair.
Summary: FOR AUGUST 30,2012
We continue to be light with our position in this pair. We are currently looking at the QE3 report this friday.
We also monitor the dollar index to see the whole trend of the currency against all currencies.
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Trade Strategy: Fundamental + Break down+ 50/200 ema breakdown
Fundamental: People are expecting a negative QE3 from Bernanke on friday.
Technical: USD Index starting to form a descending triangle and showing weakness in momentum.
Trade: 4 hour chart.
Exit Plan: 1hr MACD buy signal.
2. Target Price
In this chart, It shows Clearly that the trend is down and the 50/200 ema is already crossed for daily. Which suggest that the down trend may continue for a long er time period.
The 50 day ema serves as the resistance to the trend. The MACD also indicates a negative trade.
the Breakout of the triangle confirms the position of the trade.
Summary:
1.All EMA is in favor of SELL Signal
2. all Momentum in negative territory
3. Major Trend In downward position.
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