Trend Following: Chart OVERLAY ANALYSIS: EUR GBP USD.5 31

MEGATRADE101.COM: At first glance, the upward trend has been defined after breaking away from the consolidation and thereafter rallied to its high. However, the volatility of price action hear the highs have reflected a "Tug of War" between bull & bear players as prices went in both directions several times. And currently the Dow Jones-FXCM USDOLLAR reflected two(2) DARK CLOUD clusters indicating a negative (bear) signal. Such clusters could be a combination of two or three candle-bars reflecting contrary closing prices to say the least. But these bars can be negated with an overall pattern formation in this case, a FLAG-UP; where prices are resting or trading at the lower trendline support. In comparison, such rising pattern combined with the diverging Relative Strength Index (RSI) would indicate that the bearish signal with prices at the lower band of the trend would probably hold to breaking the support. But remember, that the Major Trend is still intact and only if a heavy fundamental would contradict this trend that would lead the prices to move lower. For now with the current market conditions,the only two fundamentals weighing in the market place is the tappering-off by the FED from its QE policy which gives that uncertainty amongst traders and investors. Meanwhile, a sentive sentiment-based market would hold stronger until such time price action says otherwise. Therefore, identifying divergences with a combination of chart patterns and price action can be favorable within certain time frames. An effective analysis made on an executed trade that remains and sustains market vulnerability will be one of the best tools applied while trading the currency market in particular. And this figure represents that consistency over the period of market exposure. Our focus was the initial 0.8350 breaking pivotal price point heading towards the 0.8450 secondary resistance which was reflected on the daily charts. However, the same would hold true for its correction lower when it declines. The weekly EURGBP shown here is reflective of our current positions both long on the way higher. Which most traders may or may not agree as risk events and other relative fundamentals risk factors may prevent this rally. As most traders and analyst have been very negative on the EURUSD, and we are no exemption. Nearing the end of the months trading would remain a consideration if and whenever the crosses would retain its market sentiments and Euphoria for the USD rally. But despite of the overwhelming negative vibes from the Euro market, we were able to stay unbias and looked at the probable high potential of return with the EURGBP cross rate. With that said, the continuing strength of the USDx trader'sentiments driving a Eurphoria still exist while at the same time waiting for the ECB President M Draghi to make is comments. Nevertheless, after digesting all probability the only probable set-back would be that the market would find some comfort after the day's trading. This is when most price action would pause until the next risk event s takes place. For now, the 0.8590 serves as the primary resistance for the EURGBP cross. As for the USD Index, currently attempting another break of the week's high of 84.37 basis point market sentiments remain strong with other traders now reluctant to trade through this bull market. With volumes and fresh initiatives to push further; the extensions can go beyond the 0.8620 and trade between its previous high @0.8705/10. email: [email protected] Follw us on Twitter @megatrade101