Tuesday, May 24, 2011
Trend for 24th of May 2011
Today news from Europe was neutral and eur/usd rallied upwards. It is quite close to the first level of resistance. I am not doing anything with the pair at the time. It is still in a short term downtrend and the best strategy in downtrends is to sell rallies. So, look for reversal patterns in the pair and sell all rallies till the trend changes. Short term resistance is at 1.4140 and short term support at 1.4070.
Gbp/jpy pair is in a nice triangle pattern. Triangles can be used for both continuation of a trend or a reversal. The pattern that gbp/jpy is in looks bullish as we have a horizontal support line at with the high at 133.20 and low starting at 130.75. If the pair breaks up it can go as far as 136.00 level or even higher (137.00). I calculate the possible advance in the pair by adding the difference of high and low points to the most recent high (it is the size of a triangle). And I get 245 pips (possible journey upwards). We would land at 135.65 area if the pattern is fulfilled.
Silver is in a very similar situation. It has been in its present range around two weeks and it might be willing to go one way or another now. I tend to think it will be upwards. At least the pattern looks bullish for me. Minimum target is 40 bucks per ounce. That’s where the commodity might face more serious resistance (if it breaks from its’ triangular pattern in the nearest future). It can also reach its’ highest high that was made on the 25th of April. Let us wait and see. Be aware of data from Great Britain tomorrow at 8:30 GMT (Gross Domestic Product). See you tomorrow.
Read my previous post:
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.