“Always do what you are afraid to do.” – Ralph Waldo Emerson
Hello. I made a few changes to the site recently, so if you notice any errors or weird behavior please drop me a line. One of the changes is the IntenseDebate comment system which is very cool. You probably know it already from other blogs – not necessarily trading related.
I’m not sure yet if I’ll be able to post my morning stuff tomorrow because I’ll be on the road but I will get back later, anyway.
The ongoing recovery is pointing to more upside action although the euro remains fragile. However, both the EUR and USD are fragile and – like I said few days ago -it’s like playing tennis with a bad-news ball over the Atlantic ocean. One day there’s the Eurozone debt crisis and the flight for safety to the US dollar, next day is Fed’s money printer at full speed and if there are two or three lighter days when you feel that the charts are stable – a rating agency will make sure that boredom doesn’t set in.
Looking at the daily chart above – we can see that next upside barrier is around 1.3730/50. I think that it won’t be too difficult to break it, or not that difficult like it was in the last attempts. Meaning of this level: 61% of 1.4280 to 1.2875, support in October 2010 and resistance after breached in November. It also provided resistance in the last few weeks. Friday’s rally above 1.3620/50 completes a bull flag formation on the daily charts – putting the euro back on the recovery road – almost canceling the 3 reversal candles on the weekly chart below.
The weekly chart is quite interesting. As you can see – last year we had support at 1.3750 for over a month and the dips were bought immediately – so we had 3 nice continuation / long tailed candles. Then 1.3750 failed to hold and turned resistance. Now what? long tailed candles from the other side – suggesting that 1.3750 is a strong resistance zone. But there’s a chance this is a fake signal – like it was last year, around the same level? A weekly close above 1.3750 should confirm this theory and also provide a good reason to buy the EUR.
EURJPY looks interesting, too. Uptrend remains intact, not much is changed since my previous update on EURJPY. I think that a test of 115 is due soon.
No signs of exhaustion and no barriers ahead…. perhaps the charting platform menu bar if that counts.
Here are some links for today:
and a clip for all the gadget lovers
Enjoy, see you tomorrow.