Forex Trading: August 2010

Sunday, August 29, 2010

Last week opened with a 60 pip or so gap to the downside.

The gap was covered then price took a dive again and most of the week was spent around .88 to .885

The last 12 hours saw a 140 pip move up making the weekly candle a bullish engulphing candle.

Again cases can be made for either upside or downside bias.

To the upside we have positve swap, a bullish engulphing candle, a weekly channel up and strong momentum up on lower time frames.

Bears will note strong resistance levels around .92 to .94 as well as the channel down on the daily.

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This is not a recommendation to trade.

Last week's candle was a busy one!

Price opened and retraced the previous candle by around 50% before slamming down again to cover the monthly open gap.

The bulls showed strength around .8950 support level.

Some things to note about the above chart:

-The strong weekly channel up. (bullish)

-The two pin bars on the daily charts which suggest to me that if an uptrend takes hold prices of .9200 should be easily achievable. (bullish)

-The decending slope of the recent peaks on the weekly. (bearish)

-Previous weekly candle bearish.

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This is not a recommendation to trade.

Price gained another 130 pips last week.

Movement has been strong to the upside for several weeks.

Price is still creeping up to the resistance levels discussed last week.

It seems likely that we will see alot of movement if price does hit those levels.

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This is not a recommendation to trade.

Last weeks action was contained in a 170 pip range ending with a close near the top of the range.

Another month has also closed and it has ended with a bullish candle.

A glance at the monthly shows that price is only 350pips from 2009 and 2010 highs of around .9400

Those previous highs may be met with strong resistance. Watch price action for clues.

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This is not a recommendation to trade.