The 1-2-3 chart pattern

Hosted by: Sunil Mangwani

Date: Fri, Aug 14, 2009, 13:00

A chart pattern is a distinct price formation that creates a trading signal, or a sign of anticipated price movements. Chartists use these patterns to identify current trends and reversals and to set buy and sell signals.

Among the different chart patterns, the 123 pattern is a considered to be an effective and successful pattern.

When the 123 pattern occurs at the end of a trend, it is a strong indication of a change in trend. Since price always moves in waves, this pattern can also be found within a trend and within a trading range.

But one must understand the advantages and drawbacks for any trading technique.

Implementing the technique in the live markets is the crucial part and one must have a trading plan defining the precise entry, stop and exit levels.

Learn how to identify this pattern and set the precise trading parameters of entry, exit and stop levels.

Click here to join the webinar.

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EUR/USD - Continued EUR Weakness?

The EUR lost more ground yesterday dropping below support at 1.4160. That level has now become upside resistance.

A drop below the recent swing lows just above 1.4100 indicates another swing lower and a target of 1.4040. Further support is at 1.4000.

A push above 1.4170 will try to test recent swing highs at 1.4220. Target beyond this on a further rise is 1.4320.

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USD/JPY

The pair is continuing to fall in early trading today after a strong up move on Friday.

Support is likely around the 50% retracement level of Friday's move at 96.40. 96.00 and 95.80 are support levels beyond.

Resistance on the upside is likely to be seen by 97.20, 97.50 and 97.80. A break above 97.80 is not highly likely today, but indicates another swing higher over the next couple days.

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Forex trading analysis by Forexpros.com - Written by Corey Mitchell

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