Looking again at the 4 hour charts, today’s Asian session tweezer or pincer top acted well as resistance and we witnessed a fall in the pair through the European session.

This drop now appears to have stalled and the candle that is forming is trugling to maintain it’s lows.

How this candle closes may provide the next trade oppertunity.

As I was doing my daily studies I see there is now abbout an equal possibility that the pair is forming a wave 4 triangle.

Wave 4 triangles always seem to drag out and frustrate. Sound familiar? If this is the case we should break out the top quite dramatically to form a terminal thrust. The support is anywhere between the current price and the bottom at 1.4050

Well, sonner or latter we will see just what the pattern was we were stuck in once we break out.

Cheers

We saw a climb in the EUR/USD during the European trading session but the price hit a wall at the level of the previous day’s high of 1.4363. So I am now being cautious in my expectation of a new high. A break below the key support should put that to rest.

We have now gone below the previous day’s low. This is a bearish sign for this pair. The next level to break onthe way down is 1.4000.

To note: We are siting on the cusp of many a supporting trend-line on most USD pairs and on the EUR/JPY.

We are at cross-roads on both pairs. I have believed for weeks now that a new top on the EUR/USD was expected but I am now also seeing the possibility for the GBP/USD.

Here’s a potential Elliott Wave count on both pairs with an alternate on the GBB/USD. I have to say there is a 50/50 chance of either one on the GBP. The defining line therefore becomes 1.6650 on the GBP/USD. A break above opens the door to a new top. however, I expect some retrace on the GBP/USD. Let’s see if the line at 1.6650 holds and becomes the trend defining barrier.

Volatility in a market is a good thing. Without it we wouldn’t have many trade opportunities. Here’s how to measure it.

On any chart set there is an indicator called ATR or Average True Range. This measures the travel of a period (bar or candle). You can set the periods measured to get an average OR set it to 1 to simply get the measurement of each candle.

I set my charts at 1. What this does is shows the total travel of each individual candle from high to low (not open to close). Then I look at the graph to see it Volatility is increasing or decreasing. Trends tend to reverse when volatility changes.

Here’s a weekly chart where I have also added a 52 period to get an average candle size for reference and superimposed it on the 1 period. Looking at this chart one has to question where the volatility went and when is it coming back AND what will happen when it does.

The EUR/USD has not had a weekly move greater than the average since May and has been below average since then. “Some 13 weeks” (Oh how Fibonacci)

The EUR/USD has reached a pivot point where the trend could be determined.

The USD/Index is looking a little overbought. So some retracement is due.

However the obvious Head and Shoulders pattern is providing a barrier to watch, for further USD strength.

The USD is gaining still and is poised to hit $1.40. This is now key support and a break there bolsters the USD bullish view.

Idealy a clean break and 5 waves down is what I am looking for.

With such a strong move up, I am presenting an alternate count to the ending diagonal.

I don’t favour one over the other at this point.

I don’t have a handle on the internal wave structure of the apparent ending diagonal. So use caution as this is the last day of the month and just about anything can happen.