This is a video summary of the Live Forex Trading Room session on October 10, 2007.

Today’s Summary, by Sunil Mangwani:

Not much of a day today, but lets go over a couple of things that we’ve been following since yesterday.

The EUR/JPY, since yesterday’s recap and close of the session, we mentioned a 1-2-3 Formation on which we went Long. We have a set of rules and a system for trading the 1-2-3 Formation. It is a classical pullback formation - a continuation pattern in the beginning of a new trend. We use a combination of Fibonacci Expansions and Fans for our confirmation.

We went into our Long trade at the break of a certain level which is a standard entry point we use in our room. We closed off the trade at the 161% Fibonacci Expansion level, which also coincides with a fan level. This was an excellent trade of about 120 points, and the sort of setups we really enjoy looking at, as they are generally stress free and confident. Having faith in your systems is very important.

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EUR/USD Technical View

After it started to move lower in Tuesday’s Asian session the pair bounced back up before it got close to the 1.4000 round number and it pushed higher ever since and is now trading above 1.4130 and it seems that we might see it make a weekly high later on today. Looking for possible resistance we have to pay attention to the 1.4175 area which is the .50 % Fib of the last leg down, this level is the only significant resistance until the YTD high at 1.4300. At this time one can safely say that the bullish momentum is increasing and the pair has a great probability that will move further north.

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This is a video summary of the Live Forex Trading Room session on October 8, 2007.

Today’s Summary, by Sunil Mangwani:

Besides the trades that we execute, these recaps are becoming more and more important for the procedures which we use to analyze the trade, and the different tools we have in our toolbox to correctly assess the situation and make a good trade. Lets go over the different procedures we follow which hopefully culminate in a profit.

On the GBP/JPY, 1h charts, what we were looking for is a Hidden Bullish Divergence - waiting for price to come and find support at a Fibonacci Fan level. When it did so, we went Long on this pair, and managed to capture some profit on the upmove. This was a decent trade, but he point is that we identify a situation and use our tools to let price give us a confirmation.

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EUR/USD Technical View

Euro resumed last weeks overall down trend on Monday, it slowly moved lower until it got close to Friday’s low at 1.4037 and it slipped a few points lower in Today’s Asian session. Although it broke under the 1.4060 support line until we see a breach of the 1.4000 round number it is safe to say that this move is just part of a retracement, and the 1.4000 area should be a good place to see whether the bulls have any more strength or not, if its the later the next support level is at 1.3930 followed closely by the 1.3850 previous highs. Conversely a bounce of the 1.4000 round number will bring new long positions that will most likely push the pair higher perhaps they will be strong enough so that we can see a new record high above the current YTD high at 1.4300.

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This is a video summary of the Live Forex Trading Room session on October 8, 2007.

Today’s Summary, by Sunil Mangwani:

Mondays are usually slow days and don’t really have too much movement. We are still waiting for the dust to settle from the opening of the trading week, and this time doesn’t usually give immediate trades.

Lets have a look at a couple of intraday setups that did fit into our desired patterns for an entry. We don’t enter into a trade until we see a technical pattern - something which conforms to our techniques, and lets us formulate a trading plan:

• Where to enter
• Where to exit
• Where we would take partial profits
• The amount of risk we will accept
• … and so on

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This is a video summary of the Live Forex Trading Room session on October 5, 2007.

Today’s Summary, by Sunil Mangwani:

The first Friday of the month always has big fundamentals, along with NFP (non-farm payrolls) data, setting the tone for the month. On that day, generally price moves in a range until the release of the economic data, and then you do get a lot of movement. A lot of folks wait to trade this data - should you or shouldn’t you? That is the question.

Normally we do not advise trading such news unless you have a very good broker that can fill you in with minimal spread, which can be very difficult to find.

Is it worth trading the NFP? Can we find some method that makes trading this important news release palatable? At the release of the data, we do not go into a trade to catch those big 150-200 point spikes - we wait for the dust to settle. Being technical traders, we rely on technical patterns. Call it coincidence, or technical trading at its best - either way you look at it, this could be one way you could look at trading the NFP data.

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EUR/USD Technical View

The pair got rejected by the 1.4300 number when markets opened last Sunday and following that we witnessed a decent drop until it hit the 1.4060 support line on Thursday, on Friday there was a quick move south after the NFP numbers got out but the US dollar lacked strength and it closed the day down against most of the other currencies. Next couple of days will help us get a more clearer understanding of the direction the pair is headed, either we’ll continue this weeks south move and aim for the 1.3930 support and main bearish target or the pair will recover and start moving towards the current YTD high at 1.4300 and perhaps higher. If the US dollar doesn’t start getting some support the EurUsd might continue its march north and 1.45 will become a point of reference for bullish traders.

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EUR/USD Technical View

Although yesterday afternoon we witnessed some small moves the pair is basically trading at the exact same place where it was yesterday when the commentary was written. On Thursday euro tested the 1.4060 support line and then bounced back up to trade above the 1.4100 round number, it has been a down week so far and we have to wait for the US session later on today to see if the downside movement has some momentum or if the 1.4060 support will hold. A failure to break below the above mentioned level can signal the end of the retracement and bulls might decide to open fresh longs and push the pair higher, making another attempt to establish new highs above the current YTD high at 1.4300.

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This is a video summary of the Live Forex Trading Room session on October 4, 2007.

Today’s Summary, by Nader Moustafa:

Today was a medium volatility day, with few trades taken. However, our main focus and concern today were the market setups that we see forming.

We will start with GBP/USD. So far as we have been saying for a good while now, there is an uptrend in progress, and just as we expected yesterday, a retracement retested the 61.8% fib level at 2.0266. Prices went to 2.0280 before continuing to retest the 78.6% level, before reaching a high of 2.0426.

So far we are expecting even further upmove, as prices are subscribing back to the middle channel of our daily uptrend line. However, we are expecting some sort of retracement from the 78.6% level, or a little higher, back down to the trendline, and then will re-assess the whole situation.

We also see a potential Bearish Divergence forming on the daily charts, with higher highs on the price, and lower highs on the stochastics. It might take some time to materialize, or might simply be beached as the stochastics curl upwards, disqualifying our Divergence setup. However, if this happens, then the breach of the 76.4% level and a close above would trigger our next Long position, with targets around 2.0605 and 2.0675, respectively.

On the same pair, on 4h charts, we have another development occurring. An interception downtrend is taking out the highs, and if breached, we will be continuing in the uptrend we have been building. So far we have a conflict with the daily charts - we are seeing several interleaving Bullish Divergences on the 4h charts, and we could be seeing prices moving to the upside.

On the EUR/USD we have a somewhat similar situation on the daily chart. In our long term view, we are seeing an upmove taking place thus far, however it has been peaking around the 1.4280 level. A Fibonacci Retracement plotted to cover the entire upmove from 1.3360 to 1.4280 gives us significant levels around the 23.6% level of 1.4063.

If prices continues the move upwards, the probability of making the highs at a target, or even a newer high, would be valid targets, especially from an Elliot Wave perspective. We are probably looking at a Wave 5 in the making. If this view proves valid, we are looking at a target of 1.5000 so far. It won’t happen this week, and probably not next week.

Lastly, on the GBP/JPY, after a few weeks of brief range trading, we are just breaching the 50% Fibonacci Retracement level of the whole downmove from 251.09 down to 219.24. The 61.8% level is inbound as it is approaching us from above at 238.92. Although its a fib level, its a lot more important than that - its a very important resistance and support level for a good while now. Breaching this level would not be an easy task.

We do expect some retracement back to the 50% level for some momentum, and it should give the Stochastics a chance to relax, as they are seriously overbought right now. That could be our next long entry on this pair.
Enjoy the video!

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EUR/USD Technical View

Euro lost some more ground on Wednesday, after it broke under the 1.4200 support line the pair tried briefly to move higher but the 1.4200 level turned into resistance after that the pair slowly started to move lower and has tested the next support level the 1.4100 round number. So far in today’s trading hours we are trading just around the 1.4100 level and the pair doesn’t seem to have that much momentum; the next support is at the 1.4060 and below that there is nothing on our charts until the previous YTD high at 1.3930. Conversely if the euro gathers some strength this area might be a good place for the bullish traders to start opening new trades and pushing the pair back up towards the YTD high at 1.4300. The markets are still at the moment because almost everyone is waiting for the ECB to announce the interest rate later today.

Resistance Levels

• 1.4300 YTD High
• 1.4200- round number

Support Levels

• 1.3930 – September 13th high
• 1.3850 – July 24th High
• 1.3680 – April 27th High
• 1.3550 – June 5th High

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