Technical Trading Tips and Techniques by 
(Please click on the accompanying chart to enlarge.)
The EUR/USD daily chart, as shown, is displaying a prolonged, one-way bearish move reminiscent of the similar drastic plummets that began in late July and late August. At this point, the pair has dropped below the last major support around 1.3880, and the bias is still bearish. The fact that this last support was broken hints at a potential continuation of the general downtrend. Further bearish action, even if interrupted by minor retracements or consolidation, could target further major support around the key 1.3550 region.
I must admit I have been astounded by the continued unrelenting downtrend this pair has been in for the past few weeks. I bought it around the support at 1.3880, only to have to sell at a loss, obviously, when it blasted down to continue to 1.3750.
In terms of shorter-term trading, it seems to have recently broken up through the steep-down trend line that has been effective since 9/29. I’m going to take a counter-trend trade and hope to sell at around 1.4100, which is below a longer-term downtrend line that has been effective since 9/25. I based this trade on not only the break of the short term trend line, but also that the pair is just coming out of oversold on the daily chart. Besides the fact that trading against the trend has its obvious risks, would you mind sharing your opinion of this trade?
GB
Eur-usd is clearly in down trend in terms of tech sense, even this down move doesn’t agree with fundamental factor. The currency of a country which got bank crisis always be sold (short). But, this time, it is related to $usd. There may be some evil force or unknown force in market. But, nobody can hold the market, just let time to pass.
For down trend, just chase the trend with tight stop-loss gap is ok, or sell intraday high is ok, too.
Cheer!
agree with Jack1, there must be evil force or unknown force
in the market. KEYNESIAN THEORY shows that $usd is over
supply. and debt repay seems to demand dollar gauge index
down little hard. but the current market is reserval.
Hi Gregory, Jack, and Daniel,
Thanks for your comments. I agree that this continued downtrend has been very surprising. I had been looking for a substantial correction, but the bear market is just not giving. And there is very little in the way of any technical bottom in sight at this point. Gregory, to answer your question, I believe those counter-trend trades may be dangerous at this point. Before getting into those types of trades, I would first look for stronger signs of a correction/retracement. With caution, these counter-trend trades can certainly be considered, but as of the current situation, there doesn’t look to be any sign of a substantial turn as of yet. Thanks, Guys!
- James
Hey James, thanks for your reply. I reconsidered this trade very shortly after taking it, and in part because of your comments decided to liquidate. As time has now proven that trade was very dangerous indeed and would have resulted in substantial loss for me.
Thanks again!
GB
Thanks for your comment, Gregory! I’m very glad that worked out for you.
- James