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Currencies EUR USD News Top Trade Idea For August 10th, 2014 – EUR/USD

fx harmonicsAs most Christian dominated countries especially in Europe are in a vacations mood for the August holidays and following the ‘Assumption of Mary’ school break next week, the debt crisis in the euro zone may not be as carefree as to enjoy the holidays so will the effect of the crisis re-emerge?

Talking about the current economic situation in Europe as it remains disappointing, rumors has it that the EU is still poorer than it was seven years ago. How could this be? Well let’s take the subject of investment which most often than not is a politically appealing theme since even historically, low long-term interest rates did in many occasions provide opportunities to finance new ventures. However,  this may have been misconstrued by generations of those who have run or are running governments today thinking that it will always be a wise decision to just keep pouring money into public infrastructure projects amid auspicious market conditions. It’s evident; a vicious cycle is at play.

As the old adage goes; ‘the proof is in the pudding’, last week the EUR/USD recorded its’ yearly low of 1.3366 right after US announcement on it’s GDP that has exceeded all expectations. Additionally, EU economic releases that ended Friday, managed to fuel the disappointment to an already weak sentiment. If the negative EU economic headline persists, the question of whether Quantitative Easing (QE) needs to be implemented in the future could just be another so called solution the ‘big boys’ in politics would be suggesting once again. It’s imperative to consider possible catalysts for the week ahead considering heavy EU data that have been scheduled including retails sales, Markit retail and the German factory orders.

C:\Users\Kenny Maria\Desktop\EUR USD 1hr W pattern 100814.png

From a total Harmonics standpoint, a ‘W’ pattern as seen above is expected to be very close to completion so this may signal a downward move from D to E when market opens Monday. In saying that, it would probably be wiser to wait until prices trade below the 1.3400 level for an ideal short entry if one fancies riding the downward move. The Fibonacci retracement levels for both B & C point have met some essential ratios in order to meet the criteria for it being a Harmonic ‘W’ pattern. In terms of trend for the EUR, it does look like sentiments favor the downside at least based on longer time frames like the 4hr and the daily and prices seem to be under the 200 MA too. This adds up to the confirmation that the bears may make it a little challenging for prices to totally climb up to the Bulls territory.

Happy Pipping !

About Kenny Simon

kennysimonKenny Simon is an FX aficionado with specific interests in the principles of Geometric trading and hence he incorporates the use of Harmonic chart patterns analysis as his preferred trading methodology. His involvement as a trader initially as well as a FX Coach till date, has rewarded him with a fast growing community of Harmonic traders globally. The conceptualization of FX Harmonics is meant to launch itself as a hub offering quality education to traders of all levels in order for anyone to learn to earn consistently from trading online.  Kenny also believes in the importance of a practically sound Trade Plan whilst managing ones psychology, money and risks to be able to squeeze the best out of the financial markets for High Probability, Low Risk trade opportunities.