Thursday, 23 June 2011

EUR/USD Breaks Lower From Trend Channel

Hourly candlestick chart. The market has broken downwards from the recent trend channel, parallel to the channel that began in late May. Why does the EUR/USD hourly chart form such clear trend lines and other clear patterns such as the recent head and shoulders?? I don't think anybody knows, but I'm sure glad it does. I have observed in the past that application of Elliott Wave theory works best when markets get hyper emotional... perhaps other forms of technical analysis work better on more emotional markets also. The EUR/USD has certainly been the most emotion charged of the major markets in recent times. I could speculate and theorise until the cows come home on why markets show clearer patterns when they're extra emotional, but I should try to express those thoughts clearly before publishing them here. I'd be delighted to discuss the topic at length if I ever happen to meet you in a pub....

Gold Since The Beginning Of May

Hourly candlestick chart beginning at the start of May. Since the bottom on May 5 the market has traded in an upwards corrective trend channel. The corrective nature of the rally implies that we should see a move below the May lows. Today the market appears to have completed a false break above the trend line formed from the May peak, raising the odds that a new trend lower has begun.    

AUD/USD Bounces Down From Trend Line

Daily candlestick chart shows that the market has bounced lower from the down trend line, raising the odds for another test of the top of the previous trading channel.

ASX 200 Tests Trend Channel Break

Earlier in June the ASX SPI 200 broke below the trend channel that had contained market action for the past year. This week's high looks to be a re-test and rejection of the lower trend channel line, raising the odds for another move lower.

GBP/USD Breaks Downwards From Trend Channel

Hourly candlestick chart shows that the GBP/USD shows that the market has broken downwards from the corrective trend channel.

The daily chart shows a bearish cross of the 18 and 40 day moving averages, in addition to the break of the up trend line formed from the 2010 lows, shown previously here