Majors Reverse

Good morning forex traders. Most of the majors have reversed and gave the reversal signal with a candlestick yesterday.

Further bad Japanese data is fueling the concern that Japan is heading for a recession. We must not forget that the US concerns for a recession is still very much a focus. The sub prime mortage crisis overshadowed the US Trade deficit.

The very oversold Euro has shown a degree of strength with some buying after the technicals showed a reversal. Yesterday this pair sank further and if aggressive traders are looking for long positions here then look for an entry that requires minimal stops. Remember, although this pair is oversold it is still against the trend.

The Sterling is not looking too healthy. It's recent collapse of the trend line and support level on the weekly time frame could be a fake breakout but needs to be watched for a possible further decline in the near future. Convergence is prominent but this might suggest only a minor pullback. If the pair continues to decline then the next big support zone is 1.8500.



Source: ESignal. Weekly Pound Dollar Advanced Get Chart.

The Dollar Index may help with the confirmation of the Euro and the other majors reversals. The weekly forex chart below shows the Index in a long term downtrend with a reversal to the resistance trendline.


Source: ESignal. Weekly Advanced Get Dollar Index Chart.

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Below is todays pivot points for the major currencies.


Source: Dynamic Trader Forex Toolkit.


Good trading.

Forex Analyst
Javid Shaik