Forex Blog - Currency Trading Online

Webinars

Free Registeration for:

Monday session
Wednesday session
Thursday session

ForeXecutor

Free ForeXecutor Demo Account

Forex Chart Analysis: Descending Channels

Blog & Emails

In today’s forex chart analysis I am looking at trading the descending channel seen on the EURUSD hourly chart. The channel has been broken once last week but for the most part has held up rather nicely. Traders normally look at channels for break out and Range trades. This channel is in a pretty well defined downward daily trend that began last year in early December. Early January saw a slight pull back in the downward move. The trend resumed the week of Jan 22nd and has yet to see any retracements. Unless today closes above 1.3897 then today will be the sixth day in a row with lower highs and lower lows.

That pattern tells me two things. The trend is fixing itself even more and that there may well be a slight pull back coming. Profit taking could be seen on a failure to close below 1.3873. A failure to r break and close above the top channel line will also cause further weight on the pair. Shorts with a stop 15 or twenty points above the top channel line would be a smart move to the bottom channel line. Longs on a test of 1.3876 accompanied by a failure there with a stop 15 or 20 points below targeting 1.4000 would also be a great short term play.

Comments

+/-

Write comment

Name:

Email:

Website:

Title:

UBBCode:

[b]

[i]

[u]

[url]

[quote]

[code]

[img]

Security Image

Please input the anti-spam code that you can read in the image.

Powered by !JoomlaComment 3.26

< Prev		Next >

*Risk Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Hypothetical versus Live Results: Always assume that results shown in articles on this blog are hypothetical results. If they are not hypothetical results, they will be clearly and un mistakenly identified as "live account" results. Otherwise all studies, script analysis, trading strategy analysis and other results are HYPOTHETICAL RESULTS and not traded on a live account.

** “Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particularly trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk. Variables such as the ability to adhere to a particular trading program in spite of trading losses as well as maintaining adequate liquidity are material points which can adversely affect actual real trading results.”