FX Path

Technical Trading Tips and Techniques by James Chen, Chief Technical Strategist at FX Solutions.

Or subscribe via email:

Next webinar

Using Fibonacci ratios to manage your trades efficiently
by Sunil Mangwani
November 23, 10:00 GMT
Register for the webinar

FXstreet.com Weblogs

Links

EUR/USD Update - Divergence

Posted on August 28, 2008 at 14:57 in Analysis by James Chen

(Please click on the accompanying chart to enlarge.)

A clear case of bullish price-oscillator divergence has formed on the EUR/USD daily chart, as shown. In this case, price has recently made a lower low while the Slow Stochastics has made a higher low. This hints at a potential waning of downward momentum, and a possible impending upward turn. Divergence signals are generally considered somewhat reliable confirming indicators that are most often used in conjunction with other technical and fundamental tools.

- James

James Chen is the Chief Technical Analyst at FX Solutions, a leading Forex broker. He is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT) Level 3 candidate. At FX Solutions, Mr. Chen writes daily currency analysis, conducts forex trading seminars, and has authored numerous articles on currency trading and technical analysis for major financial publications. His upcoming book, Essentials of Foreign Exchange Trading (John Wiley & Sons), will be released in early 2009.

4 Responses to “EUR/USD Update - Divergence”

on 28 Aug 2008 at 4:22 pm1St_Fx

Hi James,
“used in conjunction with other technical tools” Please give us some hits/tips that you use most.thanks
on 28 Aug 2008 at 4:35 pm2James Chen

Hi St_Fx,

Thanks for your question. For me, divergence serves mainly as a warning of a possible impending turn. My primary technical tools for deciding when to actually get into a trade are support/resistance in the form of both horizontal lines and diagonal trendlines. Other tools I use include Fibonacci levels, moving averages, and other indicators/oscillator signals. Thanks, St_Fx.

- James
on 28 Aug 2008 at 5:29 pm3Armand

Hello Mr.Chen,

I shall appreciate if you could comment on USD/JPY movement toward end of the US session.

best regards,
Armand
on 28 Aug 2008 at 5:59 pm4James Chen

Hi Armand,

Thanks for your question. Fundamentals notwithstanding, I am looking for a clear break below 108.50 or above 110.60 to provide more guidance on price direction for the near future. Right now, there is consolidation/congestion on the longer-term charts, so I would like to see some kind of breakout in order to provide more directional clarity. Thanks, Armand.

- James

Trackback URI | Comments RSS

Theme by Forex Street Powered by Wordpress

The comments and posts published in this blog ARE NOT trading recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

FX Path

Subscribe

Categories

Archives

Recent Comments

Next webinar

Tags

FXstreet.com Weblogs

Links

4 Responses to “EUR/USD Update - Divergence”

Leave a Reply