EURUSD

More & more bears on the way up.

Bulls don't want to give up so easily

Doing my best with my pocket change .

MERNIN

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The market is liken to a fashion show. Every month, the fashion industry focuses on a particular colour, certain dress designs, hair styles and etc. Likewise for the markets, every so often, the market gets bored of old themes and goes looking for new themes. So what is the current forex fashion for the month? It is the FED hinting of tapering or reducing the bond purchases. This implies a bullish USD biasness. As we can see for the last week, all major pairs trending lower against the USD. EUR GBP AUD NZD CHF CAD JPY. You name it.

The fundamental direction of EURUSD is still to the downside. Euro as a whole is in recession, Greece is not out of the woods yet, ECB just cut interest rate to historic low of 0.50%. So the recent uptrend got many novice traders puzzled. Why is EURUSD trending up when Europe is still in such a mess? The answer? There are several main reasons, I shall list one. In the absence of negative news, currency pairs tend to trend up. You see.

When there is no negative news, there are no macro fundamental factors for big players to sell and push the currency down. EURUSD cannot be push down by 1 or 2 players. It requires the concerted efforts of many large players coming together at the same time to push EURUSD down. It is easier to get 2 large banks to conspire together and push a currency down for 50pips. However, how on earth do you get 10, 20 or 50 large banks and hedge funds to short EURUSD together for 500pips? Simple. When there are bad news and really really bad news. Such as the possibility and rumors of a Greece default. That is like a smoke signal for the large players to join hands and sell EURUSD simultaneously. With ECB lowering interest rate to 0.50%, that again, has become the smoke signal for the market players to continue their selling of EURUSD.

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SHORT EURUSD 1.3030-50
SL 30-40pips
TP1 1.2870
TP2 1.2750

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Yeah, worst place to short if a bear.

Haha you're doing good

Let me know when you're done

Once I see 1,34 . Not anytime soon.

Eur H1 is trying to go long for now.............

My 5 second chart is bearish.................... no bullish oh no bearish again and now bullish .....................................

TP hit 1.29740.

15 more minutes for the US retail sales numbers. That should help it go somewhere? I heard that the numbers are hypothesized to be good. But then again.. time will tell for sure.

Good pips. I'll stay clear for now til :30 when there will be so many bear traps, you'd think it's hunting season opened.

Sold 0.03 Lots EURUSD 1.29854 SL 1.29999 TP 1.28

Fasten your seatbelt and prepare to enjoy the ride....ETA 5 min.

There is a valid point with that Mar-Dec '2010 chart... (reminder: market climbed 2000 pips during the following 4 months). It does clearly remind that whatever a trader perceives as bearish or bullish - success is determined by strong preparation and anticipation both ways - not by forecasting (though it's fun entertainment). Our job is to build the scenarios and weigh their odds, determine the action points and then act upon price reactions within them. We only need to know where one scenario grows odds, as well as where that one invalidates - and passes the turn to the other one. Important thing is to be prepared, armed and open-minded both ways, at all times. Market is a force of nature and can surprise at any given time - "unexpected" is its primary fuel.

However - though the picture then vs now seems similar (just the 2010 chart being longer) - it's still quite different, so FWIW, a few personal thoughts on that chart... just my take on what I see and how I perceive the mechanics of the market - so take it for what it is.


1) in 2010, the 4280->2870 was one continuous multiweek downtrend. It never flipped to the upside, eg never ran the bear stops nor attracted enough new bulls. Biggest retrace was a slight touch of 38%, didn't even tag 50%. Left too many bears in - not much fuel for another extended down move -> hence rally from a fresh LL, ~100 pips under the previous 2970. Picture was indeed VERY bearish at that new low anywhere at/under 1.29 and trend WAS cleary down with all MA's / indicators / TL's pointing to the downside - BUT, it had been an obvious trend, for weeks and weeks already - market just ran out of fuel and completed the single downtrend at that slight lower low.

In contrast - current market finished the 1st multiweek downtrend from 3700 as it double-bottomed at 2750, squeezed 400 pips higher, retracing by 50%. In essence, it already established a new multiweek uptrend - took out many bears longer term and shorter term, attracted quite anough bulls, especially inside the last few weeks. But, the fresh uptrend is still only a correction inside a now multi-month down move from 3700 - until proven otherwise. So over the latest months, we've had 2 distinct multiweek trends, together forming a 1-2 or an A-B move (to each their own) - so, very likely that the 3rd impulse is underway, having already begun.

2) in 2010, you could construct a multi-month pattern - and most traders did - which was an upwards sloping H&S, with a smaller right shoulder. The sloped neckline already broke along price breaking 3000 and the previous low of ~2970. Lot more bears stepped in, in addition to the already full-house of bears, as the pattern break was obvious. Again - continuous 2-month downtrend obvious, obvious large pattern break drawing in more shorts... no bulls. No fuel. Market effectively faked the breakdown, reversed the H&S pattern into a long and extended multi-month upleg.

In contrast - current right shoulder is building up - market makers are eyeing towards the completion of this right shoulder and the H&S pattern, with the neckline break (at roughly 1.27-1.28) in mind, which everybody everywhere can see, and thus it becomes the main action zone... market just needs to go there. There's no real fuel upside until the pattern's complete - maybe breaks down as well, with swing/position accounts having turned mostly short by then. Market needs to complete the pattern, break the neckline - eg fill the tank - and then it has great, fueled odds for a sustained, multi-month trend higher.

Here we go! wopiiii

Begining of the road to 1.2750.

This.

2917/18 may provide some bounce
2913 too