I hope everyone had a wonderful holiday season and wish you a profitable, healthy 2008! I haven’t posted recently due to time constraints but there are exciting changes coming to my website and I will share details soon.

Today’s setup is a little different than the ascending / descending channels I normally trade. I rarely use indicators but occasionally I will use a MACD indicator to look for divergence ahead of a major support or resistance barrier. EUR/USD is currently trading near the significant resistance barrier of $1.4523 and the MACD is showing negative divergence meaning the market is making higher highs, but the MACD trend is showing lower lows.

This could mean the market doesn’t have the strength to punch through the $1.4523 barrier and gives us a “magic eight ball” view of what may occur.

Normally, I would short the market on a reversal candle with this setup but today I’m going to wait for the U.S. Durable Good and Consumer Confidence data. I’d like to see a bearish bounce off $1.4523 before getting short EUR again.

Best of luck today and I look forward to trading with all of you in 2008!

::Ryan