Yesterday I talked about how there may be a clear direction soon regarding the EUR/USD pair, a highly volatile pair right now, and if volatility can result into direction, we can make a lot of money! This is a chart I was going to post yesterday but didn't find any use in it since it would not tell you anything regarding direction. But now I can and I'm really excited about it! Watching the Olympics last night reminded me of this pair, you guessed it, the women's downhill! I know this is probably the corniest and cheesiest Forex commentary you have ever read in the industry! But in the end it's all about the results that count. Great Olympians walk away with medals, us traders walk away with profit! OK, I'm getting too carried away with the Olympics sometimes. Where was I, ah, my chart,
There is some explanation to do on this chart. Where the green arrow is and the line upwards is where most articles and traders were speculating the pair was going to rebound and trade higher again. Guess what? It collapsed! Fell off the cliff, went downhill (Like the Olympics! ah nevermind) As I expected because it made no sense to me, the Euro zone is under a tremendous amount of pressure due to fear of defaulting credit ratings on some of it's members and the questionable value of the currency by it's main investors, and on top of that a strengthening US Dollar, due to those investors flocking to the safe haven of the US Dollar. The interesting thing is according to my trending line is that the pair is dropping faster then I expected, signaling clearer downtrend. Right now, my advice is to SELL, it probably will be trading in the 1.33 and below range by the beginning of next week. The RSI is in normal range.