Monday, August 24, 2009

Expect a drop in EUR/USD this week.

I was going to draw a pretty chart on this one, but since this is mainly a fundamental trade over the week, it really doesn't make sense to add any indicator on this one. The pair? EUR/USD. I've been mainly watching closely the cor-relationship between this pair and Wall Street (DJIA index). Generally speaking, DOW up, EUR/USD up, with a few fake-outs here and there, but that's not important currently since this is a momentum trade.
Now I really wish I could do an overlay and show the DJIA and EUR/USD on one chart but I don't have the tools to do that. (or if anyone does, please let me know) so for now I'll try to indicate it with these two;

Click on the chart for a bigger image and

As you can see, if these 2 images were to be on top of each other (or shown simulations) you would recognize the pattern quickly. Since Wall-Street has been stalling (strong indicator today) expect also a drop in EUR/USD, to 1.4250 as the first target and T2 @ 1.4175.

Will follow up on this...

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