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1.3000 was a psychological level for the EURUSD for the past 3 weeks. To be precise, a strong resistance can be found between 1.3026 – 1.3040. All that has changed since the start of European trading today.

Telltale consolidation gave early hints of continuation move

We can see that 1.3006 high was first reached on 16 July 2010. Since then, we had at least one attempt to breach this level in Week 29 followed by several early this week (week 30).

Did we get a clue that the market was finally going to go up? You bet! Price action over the past 2 days show us a horizontal consolidation at the resistance with ever tightening levels just hinted of an explosive move. The fact it did not weaken or paint a reversal pattern but instead stuck near the high just tells of the market’s inclination to go long.

Going forward, it would be logical for some kind of throwback action for late bulls to enter. The best place for look for this throwback is in fact 1.3000. At the same time, bears will still be looking for the move above 1.3000 to fail so any large movement below 1.3000 would be seen as failure.

Only registerd users (ie TerraSeeds Tflow® graduates) can view this post. Graduates please log in with your UID and password that you use for Forum. Find out how you can be part of our privileged trading community. Email forex@terraseeds.com

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The EURUSD’s rally has probably accelerated in the past 2 weeks based on trendline studies. This comes on the back of higher levels every week since Week 26 (late June).

Friday’s (23 July 2010) closing however has added some uncertainty so we will only know whether EURUSD will make continue its upward march next week. Why is this so?

By closing near to the same level as its opening at the head of the week, price seems to suggest that market sentiment is not that strong and could be undecided. Add to this observation, Tuesday’s action on 20 July 2010 was also a failed attempt to breach week 28 high at around 1.3000 made on Friday 16 July 2010. Put this together and we have a sideway week that has a failed attempt on the upside.

EURUSD rally steeper but week 29 made no progress

Going into next week, a few things might happen:

1. Another attempt on 1.3000.
2. A successful breach and we will have a continuation to the rally.
3. If not, bears will be emboldened to short in which case we might see a price coming back to the 22 July 2008 low at 1.2730.
4. From here on, ranging activity might set in until we know for sure where things are headed.

EURUSD is now inside a conflict zone between bulls and bears. That’s because there are two equally compelling setups that traders can look at based on the daily chart.

Bull and Bear point of view for the EURUSD

Bears will probably point out a resistance trendline that started in December 2009 (see long downward equidistant channel and red downward line). The red line is the place that bears will look to sell.

Bulls point out the inverted head and shoulder like chart pattern and its subsequent reversal and support at around 1.2465 (see horizontal blue line). Bulls will look to buy at this blue line.

Between this two views, a region has been defined. While scalpers can trade either way within this zone, swing traders or investors who want to take a longer view may want to wait till market shows hand.  If the blue line gives way, the picture becomes bearish. If the red line fails, a bullish picture prevails. The outcome may not be immediately visible if price gets caught and ‘ping-pongs’ in this zone.

Dear reader,

If there is something in trading which you SHOULD NOT MISS, this is it.

Professional traders are using it.  Fund managers and large institutional traders are religiously practicing it.

It’s so powerful that large funds and institutions spent much money to program it into their auto trading.

I shall not hold back this special concept anymore.

Concept covered in Tflow®:

In forex trading, always assume a support to remain as support or a resistance to remain as resistance until broken.
Breakout trade is usually dangerous due to many fake breaks. Such fake breaks are a function of multiple timeframe.

In a tweet (http://www.twitter.com/terraseeds.com) sent yesterday on 6 July, we said that EURUSD displays a bullish flag and also provided the resistance level too! I have to emphasize – we did it live and not on hindsight  We use the previous month high and equidistance channel as the resistance (which is also our profit target level).

Never did we assume that price will break above this resistance (unless we have a Tflow® trigger there). See chart below for illustration of trade

Put simple concepts into a trading strategy with Tflow®

Within expectation, price touched the month high resistance, our profit target reached. Once we hit our profit target, price started heading down.

The trade clocked +100 pips (on Tflow® trigger). That’s USD 1000 on 1 standard contract. USD 100 on 1 mini contract.

How did we do it?

Let me recap the concept:

1. Always assume support and resistance to hold unless broken fully
2. Trade safe and trade on high reward low risk by not trading breakout (which is what Tflow® does)
3. Confluence of levels are very important (confluence is also another important concept in Tflow®)

If you are interested to join our next Tflow® course, please do contact us at +65 6492 3196. Seats are limited.

I want to be motivating.

I want you to see what we are seeing, what we are thinking. Yes, the word is IMPART EXPERIENCE.

Trading is never an easy thing (but can you do it? Yes, the answer is YES)

I posted a very important post in the blog (important enough that it is only made available to Tflow® graduates).

This post (http://daytradeforex.terraseeds.com/2010/06/30/singapore-forex-trade-eurusd-shows-tflow®-pattern-in-h4-but-still-pending-trigger/) I call for a support in EURUSD (even though the sentiment was quite bearish for EURUSD at that time).

Indeed, price rebound from that point.

And we had our Tflow® trigger to point for an entry on the long side.

Tflow® signals and strategies are recurring – it will stand the test of time (and it has stood the test of time).

Here’s our entry and our predicted price target. By the way, all met!!

(p/s I always tell my students, Tflow® and trading is a skill. Master it and it stays with you forever. We are the facilitator to your success path)

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On 25 June, we had an exploding number for forex live hands on class. Overwhelming responses that we had to change our forex live trading to Singapore Management University.

Here, I taught students to do scalping, finetune all the way to 1 minute and 15 minute.

But most important, how to use scalping mentality to turn a scalping trade into a swing trade.

Indeed, price burst after our entry on EURUSD. We had a 100 pips profit in 2.5 hours.

Most important, we do not go against the dominating trend presented in D1.
With Tflow trigger presented guided with river, we are able to enter to our trade with a peace of mind.

We also religiously took our profit at each predicted target level.
Best of all, this was a low risk and a high reward trade. A 10 pips risk and 100 pips reward.

After 2 weeks of rallying, Monday and Tuesday price movement suggests that the party might just be over. This definitely appears to be the case if we inspect the daily chart where

1. no bullish reversal pattern has appeared
2. resistance has been met

However bulls might not have given up whereas bears might not dare to be totally assertive. Let’s see why.

When we switch to the 4-hour chart, a number of observations can be made:

1. Weeks 23 and 24 are positive weeks with higher highs and higher lows made. Week 24 closed with gains from the week’s open.
2. A bearish reversal could be considered with certainty only if this week closes negatively and below the low of last week (24). Such a condition has not revealed itself.
3. Therefore Bulls upon discovering a strong support will show themselves. It might show today because price is supported at yesterday’s low.


Bull and bear story in EURUSD

4. On the other hand, we noticed that most days in week 23 and 24 closed with positive gains leading to the overall weekly gains. Monday and Tuesday this week has already turned out to be big losers. Bears are encouraged by this. They are also encouraged by the regret shown on Monday (bull trap)
5. Late bears who has not joined yet would be afraid because of the steep down. Therefore a good short will only come after retracement. This could be anyway from Tuesday high to last Friday (18 June) high or the high on Monday (21 June).

Summary:

• Because of the price failure on Monday (21 June), bears have a case to make for bearish reversal. This is supported by the daily chart.
• Bull won’t give up yet because they have reasons to buy at support based on momentum, support and resistance levels in the past 2 weeks.
• The next two-three days will be interesting for the daytrader. The objective of the game? See if support or resistance is stronger and who is more motivated. Just don’t make up your mind yet.

Support and resistance for EURUSD; essential rules for trading the FX market

The long term view of EURUSD is still bearish and the current bullishness could be a good opportunity for a short entry!

The breakout from the daily down trendline shows some bullishness for EURUSD. While some bulls could be on a good entry, it is noted that yesterday’s high near 1.2150 happened near a level that is a classic “Support Turns Resistance”. This might hamper the bullish sentiments for the time being.

EURUSD Daily Chart

In the shorter term, there seem to be a resistance near 1.2150 level, as the 4 hourly chart reveals weakness and confusion via candles pattern

For any trade, we need to have triggers (most important in Tflow®!) Therefore, even though we see Dojis, this doesn’t mean we are shorting. We need to go to lower timeframe to wait for signal for an entry.

Note also that Price has broken up from the equi-distant channel (purple), thus, a near term support could be on the top of the channel) too.

Therefore, the short trade might not be easy – as price is trapped in a resistance and support zone.  The way to manage it is to fine tune in lower timeframe to minimise stops. That’s how we did it in Tflow®

A) Is EURUSD downtrend in an equidistant channel?
B) Is EURUSD reversing uptrend because of an inverted ‘head and shoulder’?

If your answer is ‘both of the above’, you may well be right!

For now, both Euro-bulls and bears have a story to tell. It is necessary to be patient. Buy only at support and sell only at resistance.

Do not play break out.

Bears should short EURUSD after a re-test of the upper boundary of the channel. Bulls should go long only after the neckline of the head and shoulder becomes established as support. Only time will tell who is right.

EURUSD prints mixed story; at resistance now

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One student asked me why I tweeted on EURUSD today based on one of the price actions trigger available in Tflow®. I tweeted this “$EURUSD M15 shows WR ^BN”.

Tflow® allows you to play in any direction – we do not need to care too much about the trend, although newbies are advised to take with the trend trade. We can trade any currency pair, any timeframe, any profile (scalping, swing or position).

Here’s EURUSD. See the very distinct support and resistance. This call for a range play and within the low and high point, the range is about 100 pips.  So how about getting 1oo pips in less than 3 hours. Sounds good…indeed it’s good.

That’s what Tflow® is capable of!

The EURUSD now has a support zone that had 2 precedents: late March and early April.

While the daily setup continues to be downtrend, bullish players may be hunting for reversal play on the lower timeframes.

Is that a bear trap for the Euro?

Many like to buy at low because if the trade is successful, such trade can provide a very high reward to risk ratio.

But in a strong downtrend, price can continue to fall and fall. This type of strategy is just like ‘catching a falling knife’.

Hey, wait. Tflow® has a systematic methodology to trade at the very high and very low. Yes, we like to buy when price falls but we aren’t catching a falling knife!

In EURUSD, there is a WR trigger in H4. But just purely looking at WR in H4 is catching a falling knife.

Fit in the River with 1234 trigger in lower timframe and we are able to catch a nice support price.  This is a trade with low risk high reward.

I will update next week on how this trade evolves.  Will write again!

The daily chart reveals a cautious bullish tone for the euro and the coming price action could determine its fate.

Last month, the bulls have made 2 attempts to break out of the long term down trend (trendline AA).

And this month, it made another successful breakout (trendline BB) and currently resting on this trendline.

The 3 attempts has made a likely triple bottom formation, which is a bullish reversal chart pattern.

Daily chart of EURUSD

On the 4 hourly chart, the euro is resting on both the trendline BB and the support/resistance line.

While there are strong confluences to support the euro now, there could be a possibility that Bears attempting to push it lower into the support zone.

4 Hourly Chart of Euro

In summary, while there is a possibility of Euro to dip into the support zone, there are strong confluences for euro to pick up a bullish moment at the current price level shown above.