May 14, 2008
Is The EUR/USD Due A Fall?
The EUR/USD has been creeping upwards for many months now but with the Supertrend turning red earlier this month on the daily chart it looks like we could see the EUR/USD fall back, at least in the short-term, and possibly retrace to the EMA (200) which is currently just under 1.5000.
For longer-term traders the EUR/USD is at a very interesting point, sitting right in the middle of two important levels - 1.5000 and 1.6000.
1.6000 acted as a strong resistance level last month when the EUR/USD touched this level but couldn't break through, so if this is broken we could see a continuation of the longer-term uptrend. First stop of course is to break the Supertrend which currently stands at 1.5771.
The 1.5000 level is just above the EMA (200) so this could also mark the start of a long-term downtrend if the price breaks through this level.
Of course all this is only of interest to you if you're a long-term trader. I personally am only interested in the current daily Supertrend, which turned red earlier this month and therefore ensured that I've only been looking for short positions on the 4 hour charts.
Incidentally there was another good crossover earlier today which yielded a very nice profit for half my position and I'm still running the other half as I write this post (more details of that in the weekly trading update this weekend). See my 4 hour trading strategy, available through my newsletter, for more details.
Elsewhere the Supertrend for the GBP/USD is still red on the daily chart as it has been since mid-March so I'm still only taking short positions on the 4 hour chart for this pair, whilst the USD/JPY, despite recently threatening to breach the Supertrend, is still in a strong bullish trend, and therefore I'm only taking long positions for this pair.