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Hello.
Thanks to Vytas for the question and comment on the EUR/USD. Here is our reply.
Back in a post on June 19 on the EUR/USD (http://blogs.fxstreet.com/tradersedge/2009/06/19/eurusd-a-little-longer-term-look/) we said it would potentially go up to the 1.4400 area and we’ve seen quite a move in the past couple of months and hit that level.
The question is, have we ended up the bull movement?
First off, we must point out this is a very volatile time for the EUR/USD and any trading should proceed with absolute caution and sound money management.
If you refer to our screen capture below (daily chart), it appears that we’re forming an Ending Diagonal (ED) as we’ve seen a sharp upward movement recently.
Looking at the shorter term (10 minute chart), we see a Contracting Triangle (CT), which shows that the bull run may be coming to an end, but expect to potentially see some more upward movement. We’re not saying it’s going to break 1.4400 and keep going up - not yet, anyway. But, if you’re thinking about getting into a long term sell trade, you may want to wait a little to see what unfolds as we feel there is still some small upward movements in the EUR/USD.
During these types of turbulent times, we also like to see what the other majors are doing (GBP/USD, USD/JPY and USD/CHF) to see if we can see any correlation between the majors.
So, hold off on the sell trigger for now, however, keep in mind that once this ED tops, it will move down very quickly and steeply so keep an eye out for it.
Good luck - be sure to apply your stops and use your money management.
Very Well said Ross.
Keep an eye on ED, it’s like keeping the eye on the ball during a basketball game!
- Max