by Johan Kriek (jkriek@fxinstructor.com)

First of all, be fore I start with the Probability Study on the EUR/USD, I would like to thank all the people out there who have been following by Probability Study commentaries and articles here at Forex Factory and FXInstructor’s Blog

From today, only a select few will be able to post their articles at Forex Factory and therefore I suggest to all my followers to please use the following link in the future to obtain Probability Study and various other commentaries:

http://www.fxinstructor.com/eng/resources/commentaries.php

Once again, a big “thanks” to all traders out there whom have been emailing me and corresponding with me in the Live Trading Room at FXInstructor

Below follows an “in-depth” Probability Study on the EUR which will provide an outlook for the US session as well as the Asian session tomorrow:

On the chart above you can see a slightly compressed daily chart of the EUR/USD

Step 1: Identify the most active trend which from now on will be known as the Major Trend

Step 2: Identify the most active cycle within the Major Trend which is known as the Current Trend

Step 3: Move over to a 4 hour chart and identify the most active cycle. This new cycle is known as the 60 minute trend and is also the primary indicator of the Direction of Highest Probability

Lastly, I move to a 1 hour chart to have a closer look at the 60 minute trend as well as the 1 hour exponential Stochastic

Now that we know that the 60 minute trend is bullish, the direction of highest probability is bullish as well

The 1 hour Stochastic indicates where market rhythm is trending on the lower time frames and at this stage the 1 hour stochastic is bullish but also indicating a possible cross to the downside. Should a bearish cross be confirmed we will have a no trade zone and of course then I will stand aside

Should the 1 hour stochastic continue upwards, it will indicate that market rhythm is trending higher and then of course I will have a suitable bullish trading condition to execute my trading system within

The 60 minute trend support resides at 1.4230. If the latter support is violated then the direction of highest probability will be bearish

Therefore, if the 60 minute trend remains intact, we can expect a bullish probability for the US and Asian session but if it is violated, the bias will be short. All I have to do then is wait for a bearish 1 hour stochastic for a bearish trading condition

I hope this clears things up for you from a technical perspective and please email me if you have any questions or join our Live Trading Room to hear me speak about the Probability Study technique

Farewell and happy pipping to everyone at Forex Factory!

Johan Kriek