The Euro Currency looked as thought it was trading in an intra-day sideways channel after installing the new weekly high at 1.4773. The EC 5-minute recap chart (below) clearly illustrates the whip sawing of today's action. The question that comes to mind tonight is will we see the Euro Currency bust above the top level of the concentrated volume are (green rectangle between 1.4653 & 1.4751) and make a serious run at 1.4844? Well, the EC weekly chart (below) shows that technically there is nothing standing in the way of the next cycle high (1.4844). I would also like to point out that the high of 1.4844 is well within the weekly volatility range. Based on the last 558 weeks of weekly data the Euro Currency trades outside a 2% volatility range nearly 48% of the time. Therefore it is possible that we see the Euro Currency run right through 1.4806, which is the 2% volatility range from the weekly low of 1.4514._ The EC daily chart (below) shows that the area around the 5-day moving average (red - 1.4696) might be the place the bulls regroup at and then make the last weekly push. The question for currency traders tonight is whether a trader wants to be long or short. If a currency trader want to step in front of this bus the break below the 24-bar moving average (blue) on the EC 60-minute chart (below) would have been my first idea, but because the Euro Currency has already broke through this area then we must look for the next potential idea. If the Euro currency made a short-term pull back in the vicinity of the 4-bar and 24-bar moving averages on the 60-minute chart (above) then a trader might use that area for a short-term diving board. In this scenario I wouldn't consider this potential trading idea if the Euro Currency tests the area around the 5-day moving average (1.4696) before retesting the two intra-day moving averages on the 60-minute chart. If a currency trader is looking for a long play then the area around the 5-day moving average (1.4696) might be a good jumping off point, with a break below this average by x amount of ticks might be a technical cue to step out. A currency trader could also wait and see if the Euro Currency can climb back above the 24-bar moving average on the 60-minute chart as a trigger to step into a long position. In this scenario a trader could place a stop x amount of ticks below this average to help manage a short position._ Once again, these are technical ideas on how a currency trader might try and navigate the technical structure of the Euro Currency tonight or on Friday. Remember, trading is not for the meek or garden-variety-investor, but for those individual who, "Dare to Trade."_ If you like the analysis simply send me a private message and I will send them to you daily. Opinions expressed are subject to change without notice. I make no promises or guarantees implied or otherwise that utilizing this trade report will result in profits or limited losses. You should carefully consider whether trading commodities is right for you in light of your financial condition. Remember, there is significant risk of financial loss when trading futures and options.
Looking back at the The Euro Currency Technical Outlook for Friday September 18, 2009. My intention here is to offer non system traders a perspective on one part of the trading process, which is in the preparation. Before ever placing a trade I like to create potential trading ideas from seeing what the market might look like at some point in the future and how a currency trader might utilize the information to navigate the market. In Friday's Technical I wrote. If a currency trader want to step in front of this bus the a break below the 24-bar moving average (blue) on the EC 60-minute chart would have been my first idea, but because the Euro Currency has already run through this area then we must looking for the next potential idea. If the Euro currency made a short-term pull back in the vicinity of the 4-bar and 24-bar moving averages on the 60-minute chart then a trader might use that area for a short-term diving board. In this scenario I wouldn't consider this potential trading idea if the Euro Currency tests the area around the 5-day moving average (1.4696) before retesting the two intra-day moving averages on the 60-minute chart. If a currency trader is looking for a long play then the area around the 5-day moving average (1.4696) might be a good jumping off point, with a break below this average by x amount of ticks as a technical cue to step out. A currency trader could also wait and see if the Euro Currency can climb back above the 24-bar moving average on the 60-minute chart as a trigger to step into a long position. In this scenario a trader could place a stop x amount of ticks below this average to help manage a short position. Now, let's take a look at both the 5 and 60 minute charts after Friday's action. Once agin, the above technical ideas were based on potential market movement the night before, so when you're reading the report and comparing it to the charts, remember these ideas were based on movements that hadn't yet occurred. This is the first part of the trading process for me, which is in effect the battle plan. Remember, for me creating ideas based on potential market movement helps in executing of a trading plan rather then reacting to the market like a chicken with its' head cut-off. This is a perfect point to bring to the forefront, which is why I always write in almost every technical outlook I post, the importance of being flexible. Remember, trading for me is about the ablility to make adjustments to the analysis. My motto, traders trade and do not to invest (talking futures). So, if you have any questions or would like to discuss the anlysis further drop me a private message. I do write daily commentaries and outlooks for the currency futures market and if you act fast you might get tomorrow's report tonight. Thanks and goodluck and good hunting. There is significant risk of financial loss when trading futures and past performance is not indicative of future results. .