~~~~~The elements of the development of the trend

 05 June 2012 12: 50 GMT It is the first trading week in June, and the Forex and CFD markets are geared up to develop new summer trends. Today we will review the trend for both the EURUSD and USOil (WTI) by applying our building blocks of trend development skills to 30 minute charts. Ultimately, our objective is to find the strongest market trends available for trading, while avoiding those that lack specific direction.
EURUSD
USD based currency pairs still appear to be some of the strongest trending peers in the market. Focusing on the EURUSD, the pair has decliend as much as 285 pips from its Block 1 high at 1.2617. This move culminated in a fresh low for June pictured below at 1.2332... This weeks price action however opened up moving against the trend. Our Current Price Block, has a high in place at 1.2541. Traders are watching todays price action specifically to see if our trend can continue to create new lows. If not, this may send a message that our downtrend is at least temporarily on pause.

USOIL
Momentum is USOil (WTI) has also been affected by the recent USD strength. USOil has declined as much $10.97 a barrel lower from the April 29th at 92.16 high. This move is a drastic one with price falling out almost 12% to our Current Block low at $81.19. Over all, momentum is pointed strongly to the downside with lower highs and lower lows being formed in Block 1, Block 2, and our Current Price Block... Trend traders will look specifically look for this weakness to continue. Any pullbacks in price can be seen as an oportunity to enter fresh sell entries.

Using the analysis above, my preference is to continue to find opportunities to sell the EURUSD and USOIL. Breakout traders will look to sell the EURUSD on the creation of a new low under 1.2287. Temporary USOil retracements may also be sold, creating entries on swings using a momentum oscillator such as MACD.
-Written by Walker England, Trading Instructor
To contact Walker, email WEngland@FXCM.com. Follow me on Twitter at @WEnglandFX.
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DailyFX providesforex newson the economic reports and political events that influence the currency market. Learncurrency tradingwith a free practice account and charts from FXCM.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
05 June 2012 12: 50 GMT

The Building Blocks of Trend Development 05.29

29 May 2012 13:58 GMT Moving into the fourth final week of May, the Forex market has seen a series of charts consolidate and others create new trends. For the month, our primary focus has been in pairing weak pairs such as the Euro with strong safe haven currencies such as the USD and JPY. Today we will focus on these existing trends and newly created ones, using our building block analysis method. Finding continued strength in the market will allow us to focus on specific pairs for the remainder of the current trading week and the new month ahead.
JPY pairs have been our primary focus for finding strong trends throughout May and for good reason.The EURJPY in particular has declined 277 pips from its Block 1 high at 102.12 created on May 22nd. Pictured below we can see this move lower into Block 2. Currently the May 24th Block 2 low is acting as support on the EURJPY at 99.35. This week however price has temporarily stalled, neither creating a new low or fresh high. This movement can be treated simillarly to trading an inside bar. Traders can await a breakout in the direction of the trend , unders support, prior to placing fresh entries.
EURJPY
EURCAD
The selloff of Euro pairs has also shifted to traditional commodity currencies such as the CAD. The EURCAD is trading as much as 249 pips lower from its Block 1 high established on May 21th . This pair is new on our radar and fresh off a . Over all, momentum is gaining towards the downside with lower highs and lower lows being formed in both Block 1 and Block 2. Currently, price is ensuring that a new down block will be created. Price has created a fresh low on the EURCAD earlier today,on May 29th at 1.2813. As weakness prevails on the EURCAD, traders may look for opportunities to sell into continued weakness.

Using the analysis above, my preference is to continue to find opportunities to sell Euro pairs. This bias holds true on the creation of three down blocks on the EURCAD currency pair. As well, trend traders will look for the EURJPY to break new lows under.