Well,has been tough these last two days. After I have been shorting Euro like crazy it rose more than one figure. That hurts!!!! But I still stick to the fact that we have a major top and remain short. I post the weekly chart and that blue line you see comes from the Monthly chart and I pulled it from the very top. It is the secular downtrend line. My point is that the volatility and the volumes we see at these levels are typical of a top formation. If we break that blue line and close two consecutive days above it I will have to reconsider and my G.. stop my shorts (uuuuh painful). Today Europeans tried to go beyond 1.25 in early morning but it stayed above for very little, then all day until the figures I could see that buyers had no strenght for another attempt...1.2497 has been holding. So I expect that by Europe close other sales will come in as this week long will capitulate and close positions before the start of the weekend (many are doing it now, and I am talking about the big guys that take large positions, hedge funds and financial institution traders...what I was in the past... big, arrogant and dumb :-)). I would not be surprised to see a drop to 1.24 by tonight. Anyway. My point is the big picture and believe that the risk is on the downside, these are the last days of the Bullish Euro. I cannot add the RSI indicator but a weekly divergence is underway and if the indicator moves below 70 the price will drop heavily. Have a nice weekend for those who care. For info I hope to activate my blog Teforecaster.eu by next week but will post here too.
Comment:
Update on my SECULAR EUROUSD Short. After having clearly failed to break the secular downtrend channel at 1.2500 I continue to stress that EURUSD is overbought, both technically and by the record number of long option contracts. Please do not get caught long EURO and continue to sell on bounces. I trade it daily and been trading it for ages, obviously I rely on technical indicators as per my previous comment. But market psychology and behavior is as much important. We have a situation where nearly everyone is on the same side, long euro, and since hitting 1.2500 everytime the chart highlights a buy signal the EURUSD fails to reach its short term target, then price suddenly reverse: we have a series of constant false breaks towards the upside...This is a clear sign everyone is trying to get out of longs (while many still hold their position....so capitulation still ahead). Lets now talk about levels. 1.2200 nest support and target. But where I will first close my short is 1.2085 (Previous door to 1.2500 and now trap for 1.1500) where I believe we have a major support and will not go short again until we close 2 consecutive days below 1.2085. In the meantime I stress you to not buy EUR and sell only on pullbacks. But then again you do what you want :-)..this is a personal scary opinion