It is the first trading week in June, and the Forex and CFD markets are geared up to develop new summer trends. Today we will review the trend for both the EURUSD and USOil (WTI) by applying our building blocks of trend development skills to 30minute charts. Ultimately, our objective is to find the strongest market trends available for trading, while avoiding those that lack specific direction.
EURUSD
USD based currency pairs still appear to be some of the strongest trending pairs in the market. Focusing on the EURUSD, the pair has decliend as much as 285 pips from its Block 1 high at 1.2617. This move culminated in a fresh low for June pictured below at 1.2332.. This weeks price action however opened up moving against the trend . Our Current Price Block, has a high in place at 1.2541. Traders are watching todays price action specifically to see if our trend can continue to create new lows. If not, this may send a message that our downtrend is at least temporarily on pause.
USOIL
Momentum on USOil (WTI) has also been affected by the recent USD strength. USOil has declined as much $10.97 a barrel lower from the April 29th high at 92.16. This move is a drastic on with price falling out almost 12% to our Current Block low at $81.19. Over all ,momentum is pointed strongly to the downside with lower highs and lower lows being formed in Block 1, Block 2, and our Current Price Block.. Trend traders will look specifically look for this weakness to continue. Any pullbacks in price can be seen as an oportunity to enter fresh sell entries.
Using the analysis above, my preference is to continue to find opportunities to sell the EURUSD and USOIL. Breakout traders will look to sell the EURUSD on the creation of a new low under 1.2287. Temporary USOil retracements may also be sold, creating entries on swings using a momentum oscillator such as MACD.
---Written by Walker England, Trading Instructor
To contact Walker, email WEngland@FXCM.com . Follow me on Twitter at @WEnglandFX.
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