Eur/usd - The Correction Still Taking Place But The Structure Still Favorable

Discussion in 'Trading' started by hevaystos, Jul 28, 2011.

  1. hevaystos


    We were expecting the end of the current correction, but it seems that we were too early. The prospected up-breakout, which was our main reason to tell that a correction has run its course, over a declining resistance line of a falling wedge decline proved to be just a whipsaw. Actually, the Euro failed to close decisively over this line, and instead of signaling a beginning of a new up-leg, it formed a “possible” (because we don’t know yet the weekly close price) bearish candle pattern. Briefly, the trigger signal didn’t materialized yet.

    But come on, the pair still lies over a broken major declining white line, the shape of the current corrections indicates that the odds still in the favors of “just a pullback move in the bull market”, the moving average (50 and 200-week EMAs) still taking a bullish shape, the RSI still hovering over its Bull Support Level and the pair still being surrounded by two parallel rising lines (see yellow lines).

    In brief, long-term bull traders should regard this correction as a serious manifestation against their position “only” after a decisive down-breakout below the rising lower yellow line. And only a decisive up-breakout over the “possible” wedge pattern would signals a beginning of a new up-leg to the opposite side of the rising channel.

    Ramy Rashad, CMT