The big players are getting set for another crucial decision on EURUSD just like in February 2010

Trading forex is all about knowledge and a deep understanding of the market. What I want to share today is an interesting development on EURUSD concerning the interplay between fundamental and technical analyses. The big players are getting set for a crucial decision on EURUSD just like they did in February 2010.

If you look at the weekly charts, you will observed that for three straight weeks price opened and closed almost at exact points, thus forming three stars. A star on the weekly chart is a sign of expectation, a tug of war between the big players. Where you have three stars, is an indication that something very big is about to happen. What is about to happen? We may not know it, but a review of the past will give us an indication.

Now, let us look at the past. If you look carefully at the weekly chart, you will notice a similar three stars in February this year. That was the period when there was serious concern about the economy of EU countries. Specifically, the debt situation in Greece and other EU countries. At that period the technical analysis on the daily, weekly indicated that the price had reached the bottom and was ready for a reverse from around 1.35000 after falling a by over 1,000 pips from 1.51000. The To the surprise of most traders, the fear about the economic conditions of most European countries, represented by fundamental analyis carried the day. EURUSD fell to its lowest point at 1.18757 which was an additional 1545 thus making a total of about 3224 pips from its highest point in November 2009.

Now,to the present the weekly and daily clearly RIS indicate that EURUSD that around 1.40000 is the peak and that the pair is due for a reverse. However, there is fear about the state of the US economy, the apparent failure of the economic stimulus package, possible weakening of Democrats by the mid-term elections, the price of gold etc. These fears are indicated by the three weekly stars and the Euro appears a better alternative to the big players. In the light of this, the big players are most likely ready to push the pair up to 1.60000 but a trip back is to 1.18757 is not impossible. The decision is theirs. The best option for a retail trader is to follow them. We are currently at a cross-road.

The monthly RSI indicates that the price is the middle of the monthly RSI, just like it showed in February 2010. A break out of the blue box will show us the decisions of the big boys. As usual a weekly candle below or above is a signal. This is the big picture. Relevant charts are attached.

For daily players, the blue box (1.37000 - 1.41000) is our playground for now, follow the daily candle for direction, H4 for trade signals and M15 for entries.

My view on some majors

Most of the majors are at cross road at the moment. In continuation of my desire to share my views here I present my views of some of the majors today.

GBPUSD

My current view on the GBPUSD is still valid until the daily candle closes outside the box. Once that happens, the next range is clearly indicated on the chart.

USDJPY

For the USDJPY 82.00 is the crucial point at the moment. Reaction of price at this point will determine our direction. If this point hold and price successfully break 83.16, then a test of 85.00 area is possible. If 82.00 fails, then a freefall is a big possibility. Weekly is currently at an indecision mode as depicted by the current star.

GBPJPY

For the USDJPY 82.00 is the crucial point at the moment. Reaction of price at this point will determine our direction. If this point hold and price successfully break 83.16, then a test of 85.00 area is possible. If 82.00 fails, then a freefall is a big possibility. Weekly is currently at an indecision mode as depicted by the current star.

USDCAD

USDCAD is current oscillating between 1.01120 and 1.03200 areas. A touch of 0.99600 is possible to create a double botton on the daily chart.

AUDUSD

For AUDUSD my earlier analysis is still valid. Where the daily candle closes today is very crucial. A close above 0.98400 is an indication that parity is still a possibility. The most important determinant of direction of the currency now is the weekly candle and close below 0.98400 is a confirmation of a drop to at least to next support at 0.93800

EURUSD

1.38200 is a crucial point EURUSD, weekly close below or above will determine whether the bullish move will continue or the bear will take over.


In summary, the most profitable option technically for long term trade for EURUSD and AUDUSD is short, while the best option for USDCAD, USDJPY is long. For GBPJPY and GBPUSD, 127.00 and 1.60000 respectively are crucial points in determining, the next level for both pairs.

For the the short term trades, if the daily and the weekly is bearish, then you continue to go short using H4 for direction and M15 for entry.

On the other hand, where the daily and the weekly is bullish, then you continue to go long using H4 for direction and M15 for entry.

I attach the relevant charts for these above analyses.

See where we are!

Look at where the price is at the moment! The price moved above 1.60000 by about 20 pips, came down straight and closed around 1.58385 support. There is nothing better than trading within concrete zones. As I mentioned earlier, the current zone is valid until the daily candle closes either above or below the box. See the current range clearly depicted by M15 chart below.

Happy trading!

The retrace is almost complete

The retrace which started when price reached around 1.60000 in August is almost complete. I.60000 is the target now. How many days are we going to spend between 1.58385 and 1.60000? I don't know. What I know is that a daily candle above or below the box will signal the next direction.



This daily chart has been valid since August. I will update the daily chart whenever we move out of current box. The daily chart gives the trend, which is still up, the H4 gives signal of when to trade and M15 is for entry.



I have alway said it trading within the concrete zone is the best option for any retail trader who desires success. Afterall, if your Account size is $1,000.00 and you trade 0.10 lots, you only need to make $100 a month (about 100 pips/month or 5 pips/day) to grow your account by 10% monthly. If you are able to achieve this regularly within a year, you will outperform most Funds/Fund Managers.



If you have the above mindset, your success is almost guaranteed in this highly volatile endeavour.



Happy trading!