My commentary will resume Tuesday May 25

I will be on vacation until Tuesday May 25.

EUR/USD: Standing Aside

30 minute chart: I will look to go short if i get a break and retest of 21 EMA (yellow).

4 hour chart: Price met resistance at 61.8% retracement level and stochastics seem to be headed down. I don't like to short unless stochastics crosses below 80. With a break and retest of 21 EMA on 30 minute chart that should happen. If I take this trade I will post with target.

EUR/USD: Short @1.3490

I decided to short here. I noticed the bearish divergences (price making higher high indicator failing to make higher high) in the OSMA and stochastics. Initial Target 1.3445. I will then sell half my position and move stop to break even.

EUR/USD: Standing Aside

I got out before target on last trade and it cost me 10 pips. I became fearful of a reversal when I noticed the bullish divergence (price made new low, stochastics failed to make new low) developing in stochastics M30 (see chart). Since I broke one of my rules I did visit the accountability terminal located on this blog. Price did reverse back to 1.3488 only to go right to my target. I am standing aside for now. I want to see a break and retest of the 1.3436 level (white horizontal line depicted on chart) before i go short again. I would also like to see stochastics finish bull cycle on H4 and M30.

EUR/USD: Closed 1.3455 +30 pips

EUR/USD: Short @ 1.3485 target 1.3445

EUR/USD: Weekly Technical Outlook

The EU clearly broke the neckline of the head and shoulders pattern discussed in previous posts on Friday. Price is retesting that neckline and should continue to move down if that level holds as resistance. I am looking to short on the retest of the neckline and weekly PP with a target of 1.3445. Quick 40 pips or so. I want to wait and see how price behaves around that 1.3440/30 area since that area acted as such strong resistance previously. A break of that area I will be looking to short again. My overall target on this trade will be that cluster of support depicted on daily chart 1.3340/50 area (50% fib level, 21 and 50 SMA's).

EUR/USD: Ascending channel still intact

Price still seems like it is topping here, but I am maintaining my bullish bias since the ascending channel remained intact this morning. Price retraced to 50% fib level depicted on chart H4. With a break and retest of 0.0 fib level - 1.3720 overall target would be 1.3955 which is the 161.8 fib extension. May go long if price pulls back to 1.3570 area and look to exit at 1.3690. Will wait for break and retest of 0.0 level to initiate another long position. Will be looking to go short with a break and retest of bottom trend line of ascending channel.

EUR/USD: Head and Shoulders

A break of the neckline here would trigger some selling in the Euro. I am still standing aside.

EUR/USD: German preliminary GDP

German preliminary GDP accounts for the value of all goods and services produced by the economy. Important things to note about this indicator:

- Relevance = high
- Germany accounts for large part of Euro-zone
- Number greater than forecast is bullish for EUR/USD
- Most comprehensive measure of economic activity and economy’s condition
- Release Schedule: Quarterly, 45 days after the quarter ends

EUR/USD: Chasing the trade

I was face with a tough decision when I awoke this morning. Price bounced of the double bottom depicted on M30 chart and approached the 21 SMA (yellow). When I noticed I missed the entry I planned on I was disappointed. “What a nice double bottom that is,” I was saying to myself. What concerned me was that price had to breakthrough a great deal of resistance (21, 50, and 200 SMA’s) at that point. Moreover, the risk reward wasn’t nearly as good at that entry point as it would have been off of that double bottom. I then began to ask myself if I should “chase this trade.” Well, I maintained my discipline and decided not to take this trade. Chasing trades has cost me a lot of money and I have learned through experience not to do it. I must admit, it was painful to watch my well planed trade unfold in front of my eyes as I thought about how much my P/L would have increased with that hundred pips. But I’m sure if I got back into the habit of chasing trades it would cost me in the long run. I am watching that 1.3720 area closely. A break and retest of that area I will be looking long. I may consider a short if that area seems to be holding as resistance.

EUR/USD: PPI data

PPI data reflects changes in the prices that manufacturers and wholesalers pay for services during different stages of production. If PPI data indicates inflation, then the American consumer will be paying more for good at the retail level. Important things to not about this indicator:

- Relevance = high
- A small pickup in inflation may be bullish for the dollar because this will push U.S. short-term interest rates higher.
- Release Schedule: 8:30 AM (EST); monthly

EUR/USD: Will ascending channel hold?

I got nervous today after watching that bearish divergence (price making higher high, indicator failing to make higher high) form in H4 stochastics. I locked in 3 pips and moved my stop up. Well, I'm glad I did. Currently, the EU is getting pounded after breaking through the 1.3550 support area. Price is currently approaching weekly PP and trend ling that was acting as resistance since December of 08'. I am watching that cluster of support (weekly PP, trend line, 50% fib level, and bottom trend line of ascending channel) closely. If all of that is broken through and retested I will obviously be looking to go short. If this cluster acts as support, I will take another long position. The daily chart is looking bearish at the moment, as evidenced by possible double top and stochastics just turning below 80.

EUR/USD: Closed +3 pips after moving stop up

I am going to stand aside for right now until I feel more comfortable with things.

EUR/USD: long @ 1.3611