The
EUR/USD continues to struggle as prices trade in a tight range. This price
action reflects the confusion in the market and suggests that a more nimble,
short term approach is merited. Defining where the range is being established
needs nothing more than a healthy respect for psychological levels and a Fibonacci
Retracement.
The sell off that I used to draw the Fibonacci Retracement on the
daily chart spans the high of October 27, 2011 to the low of January 13, 2012.
The move lower has projected the upside resistance that the pair will have to
overcome in order to transition from the downtrend and the current chop to an
uptrend which has not happened.
Do not make the error in assuming that a broken downtrend is
immediately an uptrend. There are signs both technically and fundamentally that
point to congestion in the near-term. This makes the current “Fibonacci
Sandwich” between the 23.6% and 38.2% Retracement levels.
Let’s also not forget that with the 1.3000 to 1.3050 area acting
as support and the 1.3200 to 1.3220 creating a 20 pip ceiling, major and minor
psychological levels are also in play.
Past
performance is not indicative of future results
The lack of an organized
follow-through makes for difficult longer-term entries in the EUR/USD. Despite
what seems a good run of bullish sentiment and momentum the angle of the 34EMA
Wave has yet to reach a “twelve to two o’clock” angle and confirm an uptrend.
Look to the shorter-term intraday time frames to stay nimble as volatility is likely
to remain higher in this range.
As an active forex trader and Chief
Currency Analyst for InterbankFX.com I do write for a number of sites all over
the web and I am happy to say that I will be posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it
out for reading later.
Forex
trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for Interbank FX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
The EUR/USD continues to struggle as prices trade in a tight range. This price action reflects the confusion in the market and suggests that a more nimble, short term approach is merited. Defining where the range is being established needs nothing more than a healthy respect for psychological levels and a Fibonacci Retracement.
The sell off that I used to draw the Fibonacci Retracement on the daily chart spans the high of October 27, 2011 to the low of January 13, 2012. The move lower has projected the upside resistance that the pair will have to overcome in order to transition from the downtrend and the current chop to an uptrend which has not happened.
Do not make the error in assuming that a broken downtrend is immediately an uptrend. There are signs both technically and fundamentally that point to congestion in the near-term. This makes the current “Fibonacci Sandwich” between the 23.6% and 38.2% Retracement levels.
Let’s also not forget that with the 1.3000 to 1.3050 area acting as support and the 1.3200 to 1.3220 creating a 20 pip ceiling, major and minor psychological levels are also in play.
Past performance is not indicative of future results
The lack of an organized follow-through makes for difficult longer-term entries in the EUR/USD. Despite what seems a good run of bullish sentiment and momentum the angle of the 34EMA Wave has yet to reach a “twelve to two o’clock” angle and confirm an uptrend. Look to the shorter-term intraday time frames to stay nimble as volatility is likely to remain higher in this range.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner