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A Great Reversal? Print
Written by Site admin   
Saturday, 04 July 2020 10:05

In the last newsletter the US$ featured. The big question was, is this a Great Reversal taking place as we watch the charts unfold.

It all takes time of course, and we will only know the answer when, and if, it does in fact collapse. We may have to wait some time!

When the US Dollar falls, the Euro tends to rise. It's an inverse relationship that is never perfect but does create opportunities for traders. As the US Dollar was topping, the Euro was bottoming, bounded by those red lines that pick out support and resistance zones from way back.

Everything has a life cycle and markets are no

exception as Stan Weinstein taught us. Price action can stay for a long time in accumulation at bottoms and in distribution at potential tops. This stage 2 up trend in the EURUSD mirrors the stage 3 down trend in the Dollar.

Is it all over now for the dollar collapse and Euro rally? Switching from the macro view to micro, the four-hourly chart reveals greater detail and a pattern that's developing.

The classic head and shoulders has been a valid pattern since the beginnings of trading and charting and, like all setups, some work out and some fail. Either way, there is likely to be a tradable setup.

Price action could well now drop away from that possible right shoulder and pierce the neckline. If so, traders would expect a stage 3 down trend that could run all the way back down, almost to where the stage 2 up trend started. Was there an earlier entry setup?

Drop down to the 30 minute charts which present numerous day trading opportunities across the major currencies.

The top, and subsequent candles, created a Catapult FBR setup, all fully revealed in the new course, Great Reversals. Time and again this pattern so often leads to an explosive reversal, it's too good to miss.

This gave a low risk entry, the only ones worth taking, which has given part intra-day profits of 61 pips. The remainder of the position will stay on, which will become the foundation of a larger sell position, if the daily chart neckline gives way.

The new course, Great Reversals, Trends, Ranges and Setups is now available by clicking this link.

 

From the blog

The Bi-polar zigzag

It's all about China (again)

Plus, don't miss the discount ends Tuesday

The stock and currency markets have been locked in a bi-polar zig zag. It's the China trade talks, or lack of them, that powers the market. It zigs up when ever the mood music is good, then zags down again into depression as the two sides appear as intractable as ever. And that's what just happened this week as the doom intensified:

Read more...

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