Analysis 073009

Charts Thursday, July 30, 2009

Currency Pair : EUR/USD

Hourly 4-Hour

Comment:

Elliott Wave:

Price was unable to penetrate the resistance to a new high and a correction is now in process. Wave 2 can retrace 100% of wave 1, but not go past the origin of wave 1.

Indicators (RSI & MACD):

Nice divergence between wave III and V on the 1 hour chart, further evidence of a temporary top.

Fundaments/News:

Today’s unemployment claims of 584K were higher than expected.

Reference Charts:

Comment:

SP500 is continuing its way up and gold is not following. The 1000 psychological resistance is coming up for the SP500. It will probably take it out

Elliott Wave Alternates:

Comment: If we have a failed 5th, or truncated 5th wave a market reversal will take place. We see such a pattern in reverse on the USDCHF, however it is more probable that we are in a wave 2 of 5 and will see more upside. 1.3738 needs to be broken to be bearish.

Best Alternate:

Hourly

Trading:

Ideal Elliott Wave Pattern:		Ideal Trading Plan: Enter the trade at the 61.8% retrace 1.4012 of 1.3833 to 1.4303. 3 lots with targets 1.41., 1.42, 1.43. Move stops each time a target is hit. Stop is at 1.3833. Always trade with a stop.
		Money Management: Never risk more than 3% per trade in the same direction. 3 trades in the same direction should add up to a 3% total of your funds available.

Traders Wisdom of the Day:

Plan your trade and trade your plan

Disclaimer:

All rights reserved. Anything on this letter may be distributed, copied or otherwise used if a reference to http://forexworlduk.blogspot.com/ is given and the author is given credit. This newsletter gives a trade setup for use of the author. This is not trading advice and the author shall not be responsible for trading losses if the reader decides to trade upon the information herein. Although the author is very thorough, nothing is for sure in life and these trade setups are by no means perfect or guaranteed. Losses will occur and as a trader you need to use sound money management techniques to overcome losses. Trading, especially currency trading , can cause huge losses and on a margined account, losses can be greater than the account balance.