EUR/USD Bearish Trend Is Not Exhausted Yet

Well, so much about a correction being about to begin. EUR/USD made a ninety pips drop in the past four hours alone, broke below all supports and fell below 1.2600. Frankly, I was expecting that it might fall, but not that much. I think we can safely conclude that the bearish EUR/USD trend is definitely not exhausted yet. The way I see it, the next target should be at least 1.2500, although the way things are going, it might break even below that level. The question is just how much lower it can go, because correction really should begin sooner or later.

We Should Expect Some Correction

After one day of consolidation EUR/USD formed an inverted hammer candlestick pattern in the four hour filter chart and headed up. That was to be expected after it reached its target at 1.2700 and broke even below that level, reaching 1.2660. There is a very strong support in this zone, so a pullback was, as I mentioned, natural. Personally, I think correction is beginning with target 1.2730, perhaps even 1.2800. Time will tell whether the trend is exhausted, but for the moment at least I intend to start buying while keeping an eye out for any signals that it might start descending again.

Apple, what happened?

No, really, what happened? You released what you claimed to be the best new smartphone on the market and then things started going from bad to worse. First your software update intended to fix an already buggy operating system only disabled the cellphone service on an untold number of devices, so you were forced to pull the update, which has never happened before, even though that is not your first time when an update you release causes more problems than it fixes. And as if that is not enough, then it turns out your phones bend when people keep them in their pockets and start conforming to their body shape. I suppose that with a little more work you could have made it an actual feature of your new phone, as long as said phone did not break when people attempted to bend it back into its proper shape. You did patent a method to make bendable screens of flexible glass after all.

On the bright side, no battery has exploded yet to burn someone, which did happen with iPhone 5.

EUR/USD Dropped Below 1.2700

As I have been predicting for quite a while now, EUR/USD reached the 1.2700 level after it broke below the support at 1.2800. And not only did it reach 1.2700 but it even broke below that level. That doji candlestick in the daily filter chart had the expected results, despite my doubts.

Now the question is what happens next? Will this pair continue on its way down or will we see a reversal? Personally I think that there will be a correction, but once that is over, EUR/USD will continue descending, although I think it is a little too early to tell what the next target will be.

We’ll Just Have to Wait

After the movement to the upside yesterday EUR/USD returned to its previous levels. I confess I am a little disappointed, especially considering that it appears that it is now back in consolidation mode. Frankly, at this point I feel far too uncertain to make any sort of predictions. I will have to wait for a proper signal before I make any decisions. That said, the doji candlestick in the daily filter chart might be an indication that EUR/USD will continue its descent if it breaks below the support at 1.2810, but at this point the trend appears to be exhausted, so I am not sure how reliable that signal is.

EUR/USD Might Be Heading Up

Despite my predictions that EUR/USD will continue falling it appears that this pair is indeed quite oversold. I admit I am a little disappointed. The pair could not break below the support level at 1.2800, a marubozu candlestick formed in the daily filter chart and EUR/USD slowly started climbing, so it looks like we are headed for some correction before the pair continues on its way to 1.2700. Personally, I think the target is 1.2950, perhaps even 1.3100, although the long-term trend still remains bearish so I will wait for the end of the correction and I will short again.

Trading Trend Vs Trading Range

I have noticed that most people are comfortable trading either trend or range, but rarely both at the same time. Each has its own pros and cons and both approaches to trading are equally valid, but require different strategies. Trading trend requires more long-term positions and a certain amount of patience and stubbornness, while trading range requires a more flexible and adaptable strategy and quick reflexes. Personally, I feel more comfortable trading the trend. How about you? Do you prefer trading trend or range?

Impulsiveness Is One of the Trader’s Worst Enemies

Several years of experience have taught me that making impulsive decisions can be one of the trader’s worst mistakes. I admit that it can be really difficult to just sit and wait for the opportune moment to place an order and some people do so out of sheer impatience. Sometimes you place an order for the sake of placing an order, sometimes you close the order too early or too late because you couldn’t contain yourself. Either way, more often than not everything goes down the drain.

So I think it is really crucial to teach yourself patience and the ability to suppress any urge to enter (or indeed leave) the market just for the sake of doing so.

Yellen’s Speech Certainly Had An Effect

FED’s Janet Yellen’s speech yesterday certainly had the expected effect on the market. EUR/USD fell over a hundred pips and broke below the support level at 1.2860. I shorted at the very beginning of the drop, so thank you so much, Yellen! Congratulations to everyone who managed to short on time as well. EUR/USD is in a pullback at the moment and I intend to wait it out before I short again, because I believe that once it ends, EUR/USD will continue its descent with target 1.2750 – 1.2700. I keep wondering, however, whether it will break below that level or we will see a more long-term correction.

We’ll Have to Wait for Yellen’s Speech

Unsurprisingly the EUR/USD consolidation still continues. The market is exceedingly calm, but that is like the calm before the storm. You can be quite certain that after FED’s Janet Yellen speech later tonight the market will become far more volatile. I do not know about you, but I, personally, will sit quietly and wait for Yellen’s speech. I think it is unwise to trade right before such an event – not only because the market is so exceedingly calm but also because we do not know the effect Yellen’s speech will have on it. In these cases the most prudent strategy is to sit and wait.

EUR/USD’s Consolidation Continues

Yesterday I was hoping that the marubozu candlestick in the daily filter chart was a clear indication that EUR/USD would continue its descent, but as it turned out its effect was minimal and the consolidation continued. So I drew both trend lines of the bearish trend and when I did this I realized that it has headed for the upper trend line. I think that once it reaches it we will have to pay close attention and wait for any signals that indicate another drop, because I believe once that happens, it will head for the lower trend line, where, coincidentally, is also the support level at 1.2700. Of course, we’ll most likely have to wait for FED tomorow for these developments.

EUR/USD Will Continue Its Descent

EUR/USD began climbing on Friday despite my expectation that it would head south and for a (long) moment there I was concerned that I might have been wrong about my prediction it would continue falling, but when it formed that black marubozu candlestick in the daily filter chart I became quite convinced that I had not been wrong after all. The trend is still very much bearish. That said, I think we might see some range before it really does continue its descent to 1.2750 – 1.2700, so I will not begin selling again until I see a clear break below the support level at 1.2860.

MasterCard Will Have to Stop Charging Cross Border Fees After All

The top court in the European Union supported the European Commission’s decision from 2007 to ban MasterCard from charging cross border fees with the motive that such fees harmed competition. This ruling come after MasterCard appealed the judgement by General Court in Luxembourg (that is EU’s second-highest court) back in 2012 which too supported the Commission’s decision. The current judgement cannot be appealed because it is binding.

Naturally, MasterCard are unhappy about it and are expressing their disappointment, but on the other hand they have been complying with the Commission’s decision for years now while the court case was still pending and they will just have to continue doing so in the foreseeable future.

Personally, I am pleased. This is a big win for the European consumers who had to pay unfairly high (and more importantly hidden) fees and it is also big win for MasterCard’s smallest competitors, who had to deal with unfair competition.

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EUR/USD Is Climbing

The doji candlestick that formed yesterday in the 4 hour filter chart did indeed signify a reversal, although I still believe it is only temporarily. EUR/USD is headed for 1.2980, which is a resistance level. Should it break above that resistance level the target will likely be 1.3000. However, I think that once it reaches 1.3000 (IF it reaches 1.3000) it will begin its descent again. Personally, I think it is a little too early for a more long-term correction, but then again, everything is possible. We will have to wait and see.

EUR/USD Might Climb a Little

I just came home, took a look at the EUR/USD chart and I noticed that there is a doji formed in the four hour filter. Now, a doji does not necessarily signal a reversal and I believe the trend is still very much bearish, but I think we might see some pullback or consolidation before EUR/USD continues on its way down. It will likely reach 1.2935 or even 1.3000 (if it breaks above the resistance at 1.2935). Either way, I doubt such a pullback will last for a long time. Personally, I will use the opportunity to sell again once it has climbed enough.

EUR/USD Is Sleeping

You could say that EUR/USD is sleeping after EUR ECB’s Mario Draghi’s press conference. It was all very exciting and I congratulate everyone who managed to profit from the situation. Personally, I do not recommend doing anything at the moment, before we have seen a clear signal that the price will start climbing (we should see some temporary pullback at least) or it will head for 1.2700 – a support level visible in the monthly filter chart. I am quite convinced it will reach that target sooner or later, but the question is whether it will fall even lower. Time will tell.

The EUR/USD Is Headed For 1.2700

EUR ECB’s Draghi’s press conference certainly had a big impact on the market. I admit that part of me was hoping it would have the opposite effect and the EUR would bounce back, but apparently that was too much to hope for. It fell so hard that what we observed was the proverbial “falling knife”. It was both a little scary and exhilarating to watch. I am pleased though, because despite my hopes that it’d bounce back, I had the good sense to short right before the press conference. As for the future – I think the EUR/USD is headed for 1.2700 where there’s a support level visible on the monthly filter.

Draghi’s Press Conference Will Be Held Later Today

EUR ECB’s Mario Draghi’s  press conference will be held later today. The EUR has been descending rapidly for months now and the events in Ukraine seemed to have an even more detrimental effect on the situation. For a while now it seemed like nothing could stop its descent, there was no support it couldn’t break below.We will have to wait and see how Draghi’s press conference will affect the market – whether the EUR will bounce back at least temporarily, or will this cause it to descend even lower. Personally, I will be watching intently.

USD/JPY Is About to Break Above The Resistance Level

After months and months of correction USD/JPY finally headed north, forming what looks like a nice and clearly defined impulse wave pattern. The price has almost reached the previous two year high at 105.425, which serves as a resistance level. There will likely be some correction before it breaks above the resistance. I think that once it does it will head further north, with target 106.80 – 106.90, perhaps even higher. Personally, I will wait for it to break above the resistance and then I will start buying again.

EUR/USD Will Test Support at 1.3100

Despite the pullback yesterday EUR/USD slowly continues its descent. I think it will likely test the support at 1.3100. That said, I do not believe it will actually break below that level. The bearish trend is exhausted and there is clear divergence on the momentum indicator. A more long-term correction might begin soon with initial target 1.3190, maybe even 1.3200. However, if EUR/USD does break below the support at 1.3100 it might continue on its way down to 1.3000 though by looking at the monthly filter I am willing to hazard a guess that it may go even lower.

Some Pullback Should’ve Been Expected

Considering that the EUR/USD pair is so oversold we should have expected some pullback. So, naturally, two dojis formed in the 4 hour filter chart and the price began climbing earlier today although it we did see a further drop after the market opened last night. Now, the question is whether these two dojis in the 4 hour filter chart are a signal for the beginning for a more long-term correction or the pullback we are observing right now is only temporarily and once it is done EUR/USD will start descending again.