Currencies...

 EUR/USD from Sunday night's open of the FX market, the Euro with all time highs in short interest  just tested major resistance. One of two things were going to happen, a blast through resistance and a strong short squeeze or a failed test, which as I posted regarding the market yesterday, I leaned toward an initial "seeming" failure of the test which would embolden shorts- this is one of the classic short set ups, a break of support, a test of what becomes resistance and a failure of the test. This creates a low risk entry for shorts as their stop would be above resistance so you can see how it would draw more shorts in to the market. If the Euro breaks above resistance, all of the new shorts will have stops just above which will trigger a wave of buy to cover orders-increasing demand, which drives prices up and causes the more hardcore shorts to start encountering losses or covering to try to preserve profits, which leads to more upside. As I have explained many times, the entire concept of head fake moves like this are to create a snowball effect in momentum and it's the reason so many reversals start with a head fake move. The head fake move has allowed us to enter most of our positions at the best prices with the least risk, even though entering the position during the head fake move at the time seems counter-intuitive or risky, it is actually the least risky entry with the highest probabilities. Very often the correct move in the market is the move that our emotions are fighting against.

 The EUR/USD from regular hours open to close, that's 3 attempted tests with each weaker than the previous, from a short's perspective this is encouraging.


 The current market in the pair as of about 9:40 p.m.

However, since Friday, the up trend line remains intact, higher highs, higher lows. I'm sure I'm not the only one looking at this trendline, therefore I'd expect it to be broken to the downside, Wall Street knows what traders are watching and they have the proof in limit orders on the books. Even as a small trader I believe you should never put your orders on the books for professionals to see. The one time I used a stop on the books (on vacation), my stop in a long position was hit, it was also the low of the day and the stock took off from there. Pro traders have enough advantages, why freely give them more? Wouldn't you like to know exactly where smart money's entries and stops are?

 Euro 15 min chart has been mostly in line since trending higher, there was one negative divergence and a pullback the next day, today formed another negative divergence and even the gap up opening was a form of a head fake move, they clearly had the intention of selling in to the gap up, it's highly probable that orders on the books told them where the orders were and they used that information to their advantage. There was a mid-day positive sending the Euro higher, it ended approximately in line with price.

 As the short term charts are cloudy I often will return to the bigger picture to keep my bearings, The May 1 30 min negative divergence was quite strong and the following downtrend impressive, however we are now in a leading positive position with much of that momentum coming at the recent lows. As mentioned earlier, I find it hard to believe such a large divergence on a 30 min chart would be needed to create 5 days of upside in the Euro, the same could have been done in a few days on a 15 min. chart.

 The 5 min Euro negative on the open and negative at the 1:30 test of resistance, yet comparing relative points (green) shows the Euro is in line intraday (confirmation) rather than a worse negative position. Comparing the white relative points, the Euro was actually stronger at the 3 p.m. bounce than the 1:30 test, even though prices were lower. It just doesn't look like the type of distribution seen at a true selling event, it looks more contrived.


 $USD 1 min was leading positive at the gap down open, it went to a negative divergence at the intraday highs, the second positive divergence at 1:30 was much weaker than the opening divergence (compare at the two relative points marked in yellow). Also the intraday negative divergence around the 11:30 area saw a much higher 3C position than the ending position of 3C which saw prices nearly the same.

The $UD 15 min chart shows activity at May 15th, this is when I first noticed something was going on with the currencies, the 7th is an interesting date in equities, the 15th in currencies. The 15th saw a leading negative divergence in the USD and a leading positive in the Euro. Since the $USD topped around the 31st of May with a negative divergence and remain pretty much in line or trend confirmation. The bottom line is on the more important charts, there doesn't seem to be anything indicating the Euro won't move higher and the dollar lower which is market positive. On daily charts, the Euro is very negative and dollar still very positive, in line with the primary trend in stocks.