Most pairs went on a rally after last news from last Thursday and Friday, and have been charging hard ever since. Tonight there is yet more news from the US, which will either push everything higher, or reverse them, at least for a bit.
There's some signs of the current trend stalling, which is perhaps isn't as noticeable on EURUSD as it is on some other pairs, such as the often correlated AUDUSD. It's also interesting to watch EURAUD.
Below we see the EURUSD chart with it's current trend in orange. But the yellow line represents yesterdays high, and price hasn't quite pushed through it yet.
EURUSD 1 hour chart
Here is the AUDUSD chart which has failed to reach yesterdays high and looks to be descending. If it breaks the yellow support line, I'd be dubious if EURUSD rally will continue tonight. If it does, there may be erratic price action first.
AUDUSD 1 hour chart
Finally here is the EURUAD chart. We can clearly see price has failed to go past the yellow resistance line twice already and it's preparing for another test. If it fails, it will suggest the EURO has no strength left, and we'd expect to see EURUSD fall.
EURAUD 1 hour chart
There's several other clues, such as a strengthening USDCAD, RSI divergence on the 1 hour charts across several pairs, and dubious volume readings (not shown). All of this information is showing that traders are starting to doubt the US announcing QE3 tonight. We'll see how it plays out.
I currently have a small short AUDUSD trade and long USDCAD trade on demo accounts active. However I also have an ongoing long EURUSD trade from last week which is safely in profit and has a trailing stop set to lock in profit should it drop.
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Update:
Well, a bit of volatility, but EURUSD & AUDUSD resumed their uptrend. The nasty spike would have made trading difficult. EURAUD bounced off resistance is trading lower in a continuing consolidation pattern, suggesting EURO and AUD are about even right now, whereas USD is losing value.
EURUSD 1 hour chart
