Most major currency pairs have reached their respective oversold and overbought areas as indicated by both the W% Range and the Relative Strength Index; where it measures the weakness and strength of its prices in a given period of time frame. Video Support: http://youtu.be/2yLP4XE_B3s
This has been the norm of the market prices, thereafter an expected correction to the opposite direction shall be made. The RSI commonly known for its relative strength index as a technical tool, is quite effective, especially where a combination of divergences and convergences are created by the prices from time to time. This is where we could identify two opposing directional lines between the RSI and the prices on the chart either using any of the chart types.
FIG. 1 DAILY EURUSD CHART
In keeping our reports and Market view as simple as possible; the Daily EURUSD shown above is within a Downward Channel since May of 2011 with a few major corrections in October. The point of Price Reversal from both May and October would have the supporting analysis based from the Financial Futures which would not have been reflected above as the equivalent Volumes and Open Interest data are not included unlike the chart of the EURO Futures and USDX in Figures 2 & 3 below. See the comparison and pls. pay close attention to the distinctions also mentioned in our Trading video.
The Japanese candlestick bar is the most reliable tool amongst the other charting systems applied today. Due to its uniqueness in Japanese bar analysis and interpretation as compared with the Western Bar system below in Fig. 2. With these alone, you are actually applying at least a minimum of three to eight (3-8) technical methods of trading analysis. As we do have applied a few tech tools such as the MACD, RSI, VOI, and the 3-line MA Cross over indicators on the chart. A clearer explanation is also mentioned in our video report and analysis. For a complete report pls. visit http://www.megatrade101.com/ and watch our supporting video below.
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