Friday, April 2, 2010

Forex Fridays

Starting with the big picture, prices are in a clear uptrend, although they are approaching important technical support. The EMAs are in a bullish configuration, but the 10 and 20 day EMAs have recently turned lower. Prices are also below the 10 and 20 day EMA, which will pull prices lower going forward. The MACD is about to give a sell-signal. Also note the degree to which money has flowed out of the security (the A/D line at the bottom).

In the last few weeks we've had several large gaps higher (very bullish) and several gaps lower (bearish). The real question to ask about this chart is this: is the last gap higher an exhaustion gap -- the last hurrah of the bulls?

Last Wednesday we had a big gap higher (A) followed by an island reversal (B). Prices gapped lower for two days (C) and then gapped lower again (D). Note that prices are generally in a lower trending orientation right now.