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.

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Closed Caption:

today's May 31st
and welcome back to make the grade 11
video presentation
when the foreign exchange market
eventually
we are at the crossroads between the
dollar's undergoing a corrective phase
this current be we could show here that
prices at the 8305 local
this working at the know we're
trendline support where
50 percent for Bernard she retracement
has been established here with
and indicator of a red line
fraum
a high that 84 96
97 on this level where
the prices on the day be here
was established at 8436
as indicated on the information data
located on the left hand side of your
screen but that's a matter of the recap
from that consulate they should period
from
April to
the first week of May before the break
out the
8305 level here
the opening price levels
of the dollar has been opening
with the price gap and continued hired
to that particular hi
of 84 49
at this level however
as you could see here that the two
configurations
of a too dark cloud formation
have given a negative signal for the US
dollar to move lower
after a string of good reports
in general thus far US economic
indicators have
are concerned and currently
with this corrective face back to the
price level
here at the fifty percent
for binocular will at $82.95 has been
touched and the driving force for the
dollar to move
in continue higher within that same
channel
may still be strong depending on the
volumes in the outcome
of momentum gathered throughout
the NEX consecutive weeks to follow
and as you could see here on the
it hourly shot
where we have indicated that it is
working at the lower band of the trend
line support
that we have drawn in para lo
with the previous top trendline
that serve us assistance
however this gripper sense the
to dark cloud formations
and drop to it low
here and for that reason that
uncertainty with regards
to the fed's tapering off
with their monitor cue the monetary
policy
have made this decline
a little more dramatic than normal
although fifty percent above the Fermi
much into a
retracement level is quite normal for
the market
to react where certain
the prevails now we also made
a comparison where we speculated
on the you're a pound cross rates
more of a long where it broke out
of its levels here
in comparison with the
though Jones FXCM US Dollar Index
which is on your right hand side
and the
Europe and cross rate on your left hand
side
which is shown here or reflected
us a line graph as compared to
a Japanese Campbell candlestick here
where it is currently working at the
10 07:51 support level
where the 10 07:40 is a critical price
although mesure same thing with the
US dollar the
though Jones FXCM US dollar
is still within racing channel at this
time
of the isley the to a dark cloud
formations
are reflected here
a swell although this is more
in relation with the dow and also
thus far as the
line chart for the Europol cross-strait
you could see that that is actually
also a selling
divergence which we also explaining our
previews
articles and market view analysis
that contradicting tops
relative strength index as a combined
tools to show some indications of how
the next market movement would be
making as one of the best tools
as we combine although here we also
combined
a they've been archie
fan formation on the racing
fan outlook that we may
where the possibility for
a drop to the previous low let's see if
we can get it here
love this particular 10:07 15 price
level
although the low here that was
established currently
what's that 10 07:33 which is not
too far off from the more important
psychological price level support
of then 740
on the US dollar
F axiom dollar index
compared with the stochastics
combined with the relative strength
index
the widening gap between the ours
I and the stochastics what eventually
converge
with in the pricing channel indicating
that any particular
the moment is simply a
temporada correction although it may be
large as far as point values concerned
although the strength of the Euro
compared with the Europol the in itself
has gained more
the relative to the
pounce movement or cables movement from
last night
let me show you exactly what we mean
what we have here is the
euro/dollar the beach charts
where we will have to adjust a little so
it will not be too overdramatic this for
us price movement is concerned
relatively
because here you could see that
the same assembling
bar formation of the opposite bullish
this that of dark cloud it's the morning
cloud formation
where engulfing bar haz
preceded over the previous the Klein
so us with this indicating that
buyers have been the become more
aggressive
where moment of having priest on this
level
during the 28th
%uh may comparing it with the
to see if we can get this one here where
the Pearl
a swell thats adjust the increments here
making it more of a double bottom
formation
penetrating the
previews moving average
on the 29th when it accelerated
and this is because of where the US
dollar moved lower
however comparing that we used to have
a second low for long position here
although at this present time we have
decided to keep our first position
at the levels above your point 8440
level
where prices have moved higher
in conjunction with the movement of
the euro in itself
from a low of let's see if we can get it
one point with the
36 this levels me
and currently working at the high right
now
at one point 30 sixty
whether the power would hold steady
in the continuation of the euro
would move lot a high near compared with
the
US dollar at this
goltz we could see the the three
consecutive high price of
the Europol cross-strait at 0.35 died 27
hats become the resistance
are the primary resistance level where
when you extend double top
here that's why every time the prices
move up
a meets that particular
hi I'll zero-point 85 thank the six
profit-taking takes place
short-covering takes place
that's why pullbacks on a daily
or the session to session basis this
possible
however as long as the price is still
moves
above the 0.2 8564 level
and once the spend its late which we
anticipate
the pending now on a continuing
US dollar declining
the Europol crossroad will continue to
move higher
and reflecting on the weekly basis
this chart the simply indicates
at triangle formation here
that broke higher on the resistance
on the first initial try as we have
shown you on the daily basis here
which broke on the
May 21st
of course this is due to the
most of the
market squeeze between
the rally and the decline of the US
dollar
which proved to be more of
a buyer's market
before the decline of the US dollar
and discontinuation here also supports
a an ascending triangle a smaller
sending private group
compared to the weekly where r
Lisa now the price of $0
point 85
62 is being held
at bay and waiting for so fresh
incentives
to move higher although like we have
baby mentioned that it this still within
the rising channel where this trend line
supports
the up trend
and the rally of the Euro
cross rate Europe out cross rate
as this has been a reinforced trend
ever since it had started way back an
January 6
2013
and this hasn't stopped for now
as the reinforced red
this thing bill being fueled by
a short the plane on the US dollar
however will find out whether this push
would be
until the end of this month which is
almost there
and a follow-through for the first week
all
the new month by June
so as far as the technicals are
concerned
when prices do move slightly higher to
this price level
although we're looking at a possible
higher higher than
86 35 initially
although there may be a
once you project the relative strength
index at that price level there maybe
a corresponding pressure on a short
selling though virgins
that would be created this was the
technical is concerned
however that particular moment will
still be
the target were it would be on the
channel formation
downwards and the midterm
outlook but for now we remain positive
and hopefully that this analysis
and support for the outlook for the
Europol the smallest the US Dollar Index
would provide some insights to your
trading thank you very much and have a
pleasant day