Thursday, 26 July 2012

EUR/USD breaks above trend line drawn from January, June, and mid-July lows

Combine this with with Gold and Silver both pressuring nearby overhead trend lines, and perhaps a period of USD weakness is commencing, or a period of consolidation. Upside breaks from all three would add confidence, until then the odds of a false break here remain elevated.

DAX close to breaking lower from bearish continuation flag

At the moment I believe that as Europe's markets go, so go all the world's markets ie. Europe is leading. The German DAX is the bellwether European market, and following the decline from the March peak has been forming a bearish flag continuation pattern. The market is close to testing for a break lower.

Gold's triangle continues to develop

Often such obvious patterns will conclude in a fake out break out, and the pattern will morph in to something else. That said, you've gotta trade what is on the chart in front of your eyes, not what might possibly maybe perhaps appear some time in the future. So if it fits your plan, you'd trade the breakout, and manage the risk.

Something to keep in the back of your mind... I posted in June that in almost all years since 1999, buying Gold in June or July and holding til end of year has been profitable. How would I use that info? For me it's an input in to how much trading capital I could risk. Given that the current chart pattern could go either way, I could trade the breakout in either direction, but risk more on the long side due to the seasonal pattern. What's your plan?

Silver still tracking trend line lower

Silver is still tracking the trend line lower, though there's not much in it... a move above last night's high would break the trend line.