Site Meter The Lawyer Trader: Eur/Usd: Reversal or False Breakout

Monday, March 16, 2009

Eur/Usd: Reversal or False Breakout

The stock markets are continuing there 4-day rally and the Eur/Usd is following suit. There's been some weakness in the dollar after the substantial gains in the indexes and the Eur/Usd is beginning to look like a potential reversal in trend in coming. Here's an hourly chart that shows the current uptrend:
So what's the game plan now? Well, you can either sit on the side line and wait for the follow through or take a little nibble and buy on a small dip with the intentions of adding to the position if the pair continues up. This will be one heck of a shorting opportunity (go long the dollar) if this move ends up being a false breakout, but I'm not going to fade the break in anticipation...I just don't feel like I have a great grasp on the markets at the moment and I need to see a little price action to get my bearings. We'll see how it turns out.

Good luck out there.

TLT

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