EUR/USD is trapped within convoluted serial bullish divergence

02:23 GMT EUR/USD at 1.3795

Forex Traders are witnessing quite an extension which upon exhaustion could face a violent breakdown. The other side of this story is serial bullish divergence which is dizzying to the best of analysts. The trend is always your friend, even a short term trend, and they too can become extended – but serial divergence (hidden) is lethal and can slice and dice the best of strategists and traders. See my road map below with a long trade Entry and Market Movement Alert

Resistances: 1.3780-94, 1.3814-24/31, 1.3867/73-97, 1.3909-39 -3985, 1.4223/29/1.4518

Supports: 1.3759-21, 1.3713/00, 1.3697-81, 1.3669-53, 1.3604

Forex Market Timing Alerts

Forex Traders may consider the following forex signal for price action:

Wednesday May 20, 2009 02:20 GMT for 1.5 hours with moderate price action

Thursday May 21, 2009 07:30-08:10 GMT for 3 hours with strong price action

Thursday May 21, 2009 14:50- 15100 GMT for 1.75 hours with moderate to strong price action

EUR/USD Long Position Opportunities:

I prefer to enter long on a pullback to mid-low 3700’s as stated above at first and second level supports. My stop will need to be in the 3650 level and my profit targets will be T1 at low 3800’s listed above, second level resistance, then T2 at 3900 down to 3870 levels, and T3 at 4000 and above. Unfortunately I do not feel comfortable printing a breakout trade – but will prefer to enter at the pull back entry level listed above. I am expecting 3818-30 to offer resistance for this pullback – but serial divergence is dangerous and unstable in its standard state – which we are in for certain as we speak. I hope to be here for the 8am GMT Market Timing Alert. Trade the map, and should you enter a breakout above 3851 – run low margin and follow the map.

Stay Alert for Fundamental news that could cause a whipsaw.

Britt Maras – Senior Currency Strategist

This entry was posted on Wednesday, May 20th, 2009 at 10:24 pm and is filed under Trading Signals & Strategies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.