To all forex traders in the U.S., Happy Thanksgiving! And to forex traders around the globe, Happy Trading!

James

(Please click on the accompanying chart to enlarge.)

As shown on the accompanying GBP/USD daily chart, price has confirmed an approximate double bottom bullish reversal after having broken out above the double bottom’s intervening peak on Tuesday.  But in the early morning hours on Wednesday, price has retraced back down significantly. Still, the current consolidation is showing technical signs that the pair may finally be forming the beginnings of a base after a prolonged downtrend over the past several months. A strong re-break above the 1.5500 region would lend considerable strength to the view that a base has indeed formed. If this occurs, further levels to the upside will be noted here.

As of Tuesday afternoon in New York, EUR/USD has cautiously continued its bullish run after breaking decisively out above the large triangle formation that was described on Monday’s blog post. Currently, price appears poised eventually to shoot for key resistance in the 1.3250 region, which is a significant prior support and resistance level, and also coincides with a 38.2% Fibonacci retracement level.

As of Tuesday morning in New York, as expected, price on the USD/CAD has tentatively continued its bearish run off the double top and appears poised eventually to reach its target in the 1.2000 region as mentioned yesterday on this blog. If that level is breached, the next support target to the downside should be the level of the trough between the two peaks in the double top formation. In the event that this potential bearish run comes to its full fruition, it should be peppered periodically with minor retracements and consolidations.

Just a quick reminder - I will be conducting an open webinar here on FXstreet.com entitled High-Probability Forex Pattern Trading. It will be held tomorrow, on Tuesday, November 25, 2008 at 14:00 GMT (9:00 AM U.S. Eastern Time). This free webinar should be a very helpful and informative session for beginners and experienced traders alike. Please click on the following link for more details and to pre-register: http://www.fxstreet.com/live/sessions/session.aspx?id=5fd1a1bd-46f0-4ac0-a163-72c20a3aac3f . Thank you, and I hope to see everyone there!

James Chen

(Please click on the accompanying chart to enlarge.)

Price action on the USD/CAD daily chart, as shown, has made a large bearish move on Monday, breaking down below a steep uptrend support line. This comes on the heels of hitting the second peak in a potential double top (around the 1.3000 region). Any further bearish action on the current trendline break could first target the 1.2000 support/resistance area before potentially shooting for the bottom of the trough in the current double top formation.

(Please click on the accompanying chart to enlarge.)

As shown on the accompanying EUR/USD daily chart, price action early Monday morning has broken out above the descending resistance line imposed by a large descending triangle consolidation that has been in place for the last month or so. Though strongly bullish as of Monday morning, this is just a tentative break thus far. In the event of a continuation of bullish daily bars, price could eventually target major resistance in the 1.3250 region. Updates with additional levels/targets to follow as price action develops.

(Please click on the accompanying chart to enlarge.)

As shown on the GBP/USD daily chart, the last three months of price action have been marked by a progressive pattern of multiple pattern breaks. On the displayed chart, at least four patterns are clear and highlighted - one rising parallel channel and three triangles. The first three patterns were all broken decisively to the downside. As of Sunday night in New York, price is still within the boundaries of the most recent pattern, a relatively smallish triangle. In the event that this pattern is also subsequently broken to the downside, as might be expected, continuing the strong downtrend that has been in place for quite some time now, the first major support target resides around the 1.4550 region.

UPDATE: As of early Monday morning in New York, price has risen to the top of the above-mentioned triangle. A strong break with close on either side has not yet occurred. More updates to come as price action on this pair develops.

Hello, Everyone! I’m finally back from the Traders Expo, and I wanted to let everyone know that I will be presenting an open educational webinar here on FXstreet.com on Tue, Nov 25th. The subject will be one of my favorites (and among the most potentially lucrative) - High-Probability Forex Pattern Trading. This free webinar should have something for everyone, whether you are a forex beginner or have been trading patterns in forex for many years. For more details and to pre-register for this webinar, please click on the following link: http://www.fxstreet.com/live/sessions/session.aspx?id=5fd1a1bd-46f0-4ac0-a163-72c20a3aac3f . Thank you!

James Chen

(Please click on the accompanying chart to enlarge.)

This is an evening blog post after the second busy day of events at the International Traders Expo. I have been watching the rough triangle consolidation form within the past couple of weeks and days, and the borders of this triangle have been holding true thus far. It is roughly a descending triangle, although the bottom border is not perfectly horizontal. Traders looking at this triangle to be a continuation pattern are watching very closely now for a strong breakdown and close below the bottom border.  Currently, as of Thursday evening in Las Vegas, price is hugging the bottom border. Friday morning will dictate whether this support holds or is broken down for a potential bearish run. In the event of a move below strong support around 1.2330, price could target further support in the 1.2200 region.