During the past few days we could notice that the uptrend is not running out of steam. Previous highs of 1.5050 have been taken out, and new short term resistance level of 1.5150 has been established. Although the market has come down from those highs and went all the way to test support of 1.4800, there still seems to be high probability that all time high levels of 1.600 will be revisited and retested in a short to intermediate term future.
Position traders can look at the weekly chart below to see that we have a much more room to the upside. Upper trend line is very steep, and since we are coming to the closing of the year, we may see its slope decrease as some yearly profit taking might take place.
Short term and day traders can look at the twenty minute chart below with Bollinger Bands and Stochastics (in this post you can see how I like to use Stochastics). Yesterday’s high of 1.5117 is very close to be tested, and if that gets blown, then a swift up move fueled by stop loss taking might jump us up 20-30 pips in a minute. Yet we are entering resistance zone and I personally would hate to initiate buy orders at this level. Most likely I would wait for pullback to do just that, and use Stochastics as an oversold indicator to show me when I should jump back in.
As always, the most crucial thing is not where the market is going next, but how you approach the trading in general. Markets, as always, can go anywhere, anytime, and since we can not control that, the only thing left is to control ourselves with shrewd money management rules. Good luck to all!
You Might Want To Check These Out:
- Market Analysis for EUR/USD October 26th, 2009
- Market Update – Trend Confirmations
- Intraday trends
- Controlling Risk
- Mid Week Update on EUR/USD and USD/JPM
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