1. On the EUR/USD we can see at its high yesterday it ran into a strong resistance line and has pulled back. The interesting thisg here is that if the EUR/USD finishes lower today it will form a negative RSI 3 divergence right after it bottomed with a positive RSI 3 divergence which is very rare. Because of this I think the institutions will rally the EUR/USD higher to break the forming divergence. If the EUR/USD finishes lower today then we will be switching from buy to sell tomorrow. At this time it is best to tighten your stops and look for an upward bias today in the Euro.
 |
| Add caption |
2. Looking at the USD Futures today since what the USD is going to do is paramount to deciding what trades to place. Yesterday the USD had a steep selloff midday which caused the USD to pierce important support levels but notice the bottom tail of yesterday's candle did not reach our lowest support level. While it is possible we are seeing a 1-2-3 reversal pattern here I still think it is quite possible there will be further downside as the day progresses. There is also the inverse head and shoulders pattern here to consider and also a positive RSI 3 divergence which is also forming. If the US Futures trade above the top red line at 97.98 then switching to USD long will be sent out.
 |
| Add caption |
3. On the GBP/USD we see yesterday the price did not quite make it to our target price and today is pulling back thus far this morning. The price is now supported by the lower arm of the triangle which has formed and there is additional support on the horizontal line at 1.3100. Depending if the USD Futures trade above the prior noted resistance will dictake what happens here with the GBP/USD. It should bounce off the lower triangle arm and head to the upper arm at 1.3250. I will update as things progress.
 |
| Add caption |
Sponsored by
LegacyFX
