Thursday, September 4, 2008

EUR/USD Daily chart Failed Hammer pattern

The hammer pattern that on 3rd September is a failed pattern.The price broke the hammer HP of 1.4523 and touched 1.4544. But could not sustain the break out and fell below the break out point signalling a false break out.The price retraced and broke below the LP of hammer1.4384. Ten pips below is a good place to short the market. The daily chart is given for illustration.This another example of MACD positive divergence which did not get a trigger signal by a real break out from hammer HPLevel.Some time pattern failure give better set ups and opportunity for entry point.Lowest Price reached after the break down is 1.4222 and closed below the break down level indicating dollar stength and EUR weakness.The days sentiment is buying of USD and selling of EUR. Strategy is to short EUR/USD pair on rallies or stand aside.Muraleedharan

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