FOREX TRADING

Just When? US Dollar Reversal and Breakout a Matter of Time

Fundamental Outlook for US Dollar: Neutral

- US Gross Domestic Product numbers show worst drop in 27 years
- Dollar slipped on S&P rallies through earlier-week trading
- Months of consolidation could foreshadow US Dollar breakdown

The US Dollar ended the week lower versus foreign counterparts, but it failed to break below key range-lows in spite of sharp S&P rallies and fairly disappointing domestic economic developments. The highly-anticipated US Gross Domestic Product showed that the economy contracted less than expected in the 2nd quarter of the year, but remarkable downward revisions to earlier figures clearly dampened optimism on growth. Government data showed that the economy saw its worst quarter-on-quarter performance in 27 years in Q1. The slower (more…)

Just open the 4 hourly chart and choose whatever currency you want.
Put the Bollinger Band (20) indicator and be sure that its center line is appearing.
Describe 2 valid lower points OR 2 valid higher points in the Bollinger Band and drop a line from the first to the second line; it will be our break line.

Now as a candle closes above (more…)

This pattern shows two converging trendlines (support levels & resistance levels) and is (1) a bearisch formation that usually forms during a currency pair downtrend as a continuation pattern (downtrend will continue) or (2) a bullish formation that usually forms during a currency pair uptrend as a continuation pattern. (uptrend will continue)

This pattern is confirmed when the currency pair price breaks out of the symmetrical triangle formation (1) to the downside and closes below the lower support trendline in order to continue the downtrend or (2) to the upside and closes above the upper resistance trendline in order to continue the uptrend.

What does a Symmetrical Triangle Formation look like?

The symmetrical triangle is marked by two important trend lines. At its top, there is a line of resistance where traders are willing to sell the currency pair. This resistance line communicates the fact that bearish currency traders are over time willing to pay lower and lower prices for the currency pair indicating a possible break out to the downside.

At it’s bottom, the support line communicates the fact that bullish currency traders are over time willing to pay higher and higher prices for the currency pair indicating a possible break out to the upside.

How to trade this pattern?

For it’s best prediction, an established trend should exist, either a strong down or a strong uptrend. Once the currency pair breaks out the symmetrical triangle, most likely, the price will continue it’s previous trend.

Trade the breakout!

Chart example

Please note how the previous trend is an uptrend, once it breaks out the symmetrical triangle, it’s uptrend continue!