Forex Traders Confront Trend Resistances with Potential for Exhaustive Consolidation or Reversal

Tuesday May 26^th 23:37 GMT EUR/USD at 1.3991

The serial bullish divergence described in our last forecast with the defined long trade entry performed to our T2 target level near 1.4000. We suggested being alert for fundamental news that may allow a whipsaw and with luck – the market received it with news on lackluster demand for Treasurys and a rise in the 10 Year yield: Clearly that offered some fuel for the serial divergence which can be so lethal.

Currently the pair is leaving forex traders lofted with indecision but I feel we have some key price points and required price action to offer us a bearish forecast and short sale opportunity. If it rises above 1.4013-24 — I prefer selling into resistance nearing the 1.4069-89/1.4117 level.

Resistances: immediate at 1.4007-15/24, 4055-69, 4077-89 and then 1.4113-24

Supports: immediate at 1.2982-75, 1.3957-47, 1.3854/36 and then 1.3790

These values, on both sides, have a rather steep slope but are likely to offer reaction.

Market Timing Alerts: Exclusive Primary Movement Timing Program (PMTP)

Forex Traders may consider the following Price Action Alerts for the EUR/USD:

Wednesday May 27, 2009

01:40 – 02:15 GMT for 1 hour with moderate price action price action

07:20 – 07:50 GMT for 2.15 hours with strong price action

14:30 GMT for 3 hours with strong price action

Forex Traders may consider this trade opportunity for the EUR/USD:

Prefer to sell a rise to resistance at 1.4067-89 with a stop at 1.41399 or less.

With no rise above 4029-59, may elect to sell a break of support in the level 1.3967 BUT any false break and rebound back towards 1.3999 MUST be capped at 1.4009 and stopped to wait for reloop of rise to preferred sell level: Reject back to below 1.389 with NEW resistance formed at 1.3889/97 level may offer the bear break downward

Should the secondary sell, the break of 3967 prevail and 3999ish cap, then indeed the bear move should accelerate below 3947/55 as long as NEW resistance is set at that level. A straight bust of 1.3944 is desired for this trade.

T1 target is 1.3863, T2 at 1.3805, and T3 at 1.3749.

Britt Maras – Senior Currency Strategist

This entry was posted on Tuesday, May 26th, 2009 at 7:38 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.