Summary of the Week ending 30 July 2010
An uneventful week for me. My trades were all not triggered. All the pairs moved opposite to what I projected them to be.
Let me now try to review and project for the coming week.
I am expecting the EURUSD to reverse last week as there is a doji formed on the weekly chart occurs just at the top of a very strong uptrend for the past 5 – 6 weeks. I am actually looking to trade the reversal but the EURUSD seems to start to consolidate at around 1.2950 - 1.3045 and have tried numerous time to closed above 1.3000 but failed to do so.
It eventually closed above 1.3000 maybe due to the news release of the German Unemployment Rate. The price start to test and managed to break the next level of resistance, but seems not to be able to close the day above the resistance for the last 2 days of trading of the week. It closed the week at 1.3050.
EURUSD created higher high after a Head and Shoulders bullish reversal formation was detected since end Jun and early Jul 2010. The EURUSD have now taken out resistance and also the 61.8% Fibonacci retracement at 1.3000 and is now aiming for 1.3090.
A clear RSI divergence could be seen. The price is creating a higher highs while the RSI is creating lower lows from 15 Jul 2010. A reversal in price is to be set in the making.
I am actually looking at 2 areas where there could be opportunity to sell. An aggressive selling area will be at the break of around 1.2940 - 1.2960. A long wick bearish candle could be seen on the last day of the trading week. This could signal a possible reversal of the EURUSD after a strong up trend.
A more conservative and more profitable entry will be at the failure of breaking the 76.4% Fibonacci retracement at 1.3262. I will look for proper candlestick pattern that signal reversal before I would recommend an entry value.
These two trades recommendation is still inline with my overall long term bearish outlook for the EURUSD.
Have a nice weekend....