Euro sets new highs

There can only be one story today and that is the Euro setting a new all time high yesterday after breaking out of a triple top. As mentioned previously here and also here the Euro still looks bullish.

At this point emotions can easily take over and we all pile in buying the Euro when what actually takes place immediately after you place your buy order is you witness the Euro head straight back in the opposite direction. This is what is referred to as a fake breakout as many of you who have had training from me will know.

A fake breakout is when price breaks out of a range / support / resistance etc. Following the breakout it reverses and heads back to where it came from leaving many traders upset while holding on to a loss.

Right now on the Euro we do not know if this is a fake breakout. You only have to turn on the tv and listen to speculators but we avoid listening to these so called experts. The way to filter out the fake breakout is to use our entry stop loss technique (EST). This will provide you with a good indication but it is not the holy grail in filters. It is however an excellent tool to use in situations like this one.

Resistance on Euro Dollar is 1.6000 as represented by MOB on the chart below. BOB will aid in a bullish stance here.


Chart courtesy of Advanced Get. Data provided by eSignal.

Take note of todays chart as you will see we are actually in a long term range in an upward trend. If we start breaking through supports then this chart should be used for longer term analysis including reversal points.

No update for tomorrow. Next update will be on Tuesday morning.

Forex Analysts
Javid Shaik & Anne Chapman