Eur/Usd August 31 Forex Trading Recap


The Eur/Usd move 88 pips from market open at 9:00 am until it’s peak at 1:00 pm est time. That is not that big of a move today but you could have entered for a short profit. After the pair reversed around the1.4300 area.

We have been experiencing range trading conditions since July 15th when the pair crossed over to 1.4050 since that date the range has been 1.4050 to 1.4450 exactly 400 pip range. Now the pair is not always moving the full 400 pips. There is a smaller tighter range within the 400 pip range. The smaller range is 1.4400 to 1.4200 which is exactly half of that at 200 pips.

Recap of the current range that we are in.

4hr Chart *note clicking on the charts will show information about our charting system


so if you look at the above chart you can see that we crossed over the 1.4050 mark on that day and that is when we entered the range. After crossing the price moved to 1.4300 and reversed to challenge the 1.4050 area and at that point went right back up to to 1.4448 the current resistance level.

The 1.4450 level was challenged several times and that indicates that it is a strong resistance level. However the pair did not break that level so we now have a range which the pair is operating in. The next move was that the price went right back down to challenge the 1.4050 area again. But that support level held and now the price went back up this time only to the 1.4400 level.

So I hope that you can see there were several trading opportunities during this range. Now the range is getting smaller because the pair is moving in a 200 pip range.

so if you look at the above chart you can see that we crossed over the 1.4050 mark on that day and that is when we entered the range. After crossing the price moved to 1.4300 and reversed to challenge the 1.4050 area and at that point went right back up to to 1.4448 the current resistance level.

The 1.4450 level was challenged several times and that indicates that it is a strong resistance level. However the pair did not break that level so we now have a range which the pair is operating in. The next move was that the price went right back down to challenge the 1.4050 area again. But that support level held and now the price went back up this time only to the 1.4400 level.

So I hope that you can see there were several trading opportunities during this range. Now the range is getting smaller because the pair is moving in a 200 pip range.

Now I am going to introduce a diagnal trendline to show the there is an ascending triangle forming. Chart patterns are critical in trading and I recommend all the chart patterns. This is an ascending triangle and when you see an ascending triangle there that usually indicates that the price will break up through the channel. That is not always the case but percentages are bullish. A great place to learn chart patters is Chart Patterns.com

Trade Setup:

In the past two months you can see the great range trading opportunites that have been available. Now the range is getting smaller and smaller and we are getting ready for a breakout. In addition to that there is alot of news going on this week so check Yohay’s Eur/Usd Outlook to stay on top of the news, you don’t want to get caught off guard when a big news release comes out.

This is a simple setup: what I will do to trade this is watch the triangle. If the price goes through to the upside I will go long. I am not going to trade this off of a bounce at 1.4000 because I will wait for the price to break through the lower triangle if that is the way the market decides to go. If the price goes through to the downside I will enter short.

That is it.

Practice good money management and keep tight stops. I am going to place my stops at 30 pips either way. I have targets of 1.4200 to the downside and 1.4450 and 1.4640 to the upside.

Notice however that even if we break the triangle we are still in the range trading range between the green lines I showed earlier. For any real breakout we need to get outside of that range. There is been slow movement in the pair which may be indicated by lower volume which was written about at forexblog.org

I hope this has been useful to you. If so let me know I contact me and let me hear your comments below.

Thanks,

Casey

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Casey Stubbs is the founder of Winners Edge Trading, which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets.

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