Finally some action in the EURUSD last night:
The pending BUY-STOP trade which was just touched and activated the night before stopped out with a $121.50 loss. The SELL-STOP which I had placed below what I thought was a fairly important support line tripped, but the EURUSD had ended it's free fall by then, and this order is currently sitting at -$2.90.
In order to make up the losses suffered during the week, the EURUSD would have to fall a long way. I should also adjust trailing stop settings and think about turning BreakEven off in my robot. That's if I'm convinced it will continue to fall, that is.
The large blue box shown in the chart above highlights most of the weeks price action. It was very choppy, indicating uncertainty.
The price jumped above resistance at 1.32273, indicated by the top yellow line, did a little dance for a few days, and then crashed down below the same line last night (Friday night here in Australia).
I drew some trend lines (shown in orange). Aren't they pretty? I'm never sure where trend lines should go, but it appeared that there were enough points in the prices to construct them, not that they ended up meaning much after lasts nights fall.
Also shown on this chart are two thin lines, red and orange, representing a simple 100 period moving average. The red line is set to PRICE_HIGH, and the orange to PRICE_LOW. Note how the large price bar on Friday appears to fall through both of these levels. It's almost as if it knew they were there ;)
Where will the price go from here? I think it's set to fall further. If there's any terrific news from Greece over the weekend, this may prove to be incorrect, but several charts do seem to support a further fall.
Here is the EURUSD daily chart, presented in refreshing white, with a simple 100 & 200 period moving average plotted. 100 in red, 200 in blue:
Note the price action has retraced up to the 100 period simple moving average (red line), and has appeared to have bounced off it.
Here's the daily charts of the EURUSD and several other currency pairs with Bollinger Bands. 2 standard deviations are indicated by the upper and lower solid lines, 1 standard deviation is indicated by the dotted lines. 20 period simple moving average is the middle line.
If you're still with me and haven't fallen asleep yet, you'll notice that the price action started to consolidate and now reverse in each of these currencies, and has fallen below (or above in the case of USDCAD) the 1st standard deviation (dotted) line.
This 1st standard deviation line can sometimes be used to show trend direction and strength. You'll notice that price action has remained between 1st & 2nd standard deviation bars quite consistently on GBPUSD, AUDUSD, and USDCAD, indicating trend strength, and has now slipped below (above) the 1st standard deviation line. This is a strong indication of a change.
GBPUSD and AUDUSD have actually been in decline for a few days already.
But wait, there's more! Let's throw a contrarian indicator in here just to make ourselves unsure and remove any sense of clarity and hesitant about place any trades. It's the Forex way!
Here is the daily EURUSD Ichimoku Kinko Hyo chart.
I'm not great at reading these, but apparently the price has entered "the cloud", and this is supposedly an area of resistance. It has pierced quite far into the cloud, and if it emerges out the other side, indicates a possible price continuation (upwards).
One more - orders with Oanda, usually used as a contrarian indicator.
This shows that traders with Oanda are short EURUSD 53.72%, which means we should be long.
Overall, the EURUSD daily 100 period moving average bounce and Bollinger Band information from 3 other currency pairs is strong evidence of a continued move lower. But as always, watch out.
Because I get easily confused by technical analysis, I'm currently trying out a "break-out" strategy that doesn't require so much technical know-how. It instead relies upon looking for periods of price consolidation, and placing trades above and below. Currently it looks like a small consolidation is forming on the EURUSD 1 hr chart (the small blue box on the 1st chart of this post).
If this consolidation extends come Monday, I will place some trades above and below this area. With Greece happening, I imagine the price will drop immediately on market open, though.
A larger area of consolidation is highlighted between the two yellow lines on the 1st chart. If the price continues between these lines, I'd be looking to place some SELL-STOP trades below 1.30.
