Peter Bain Forex Trading Commentary for Friday July 21, 2006

Forexmentor.com Forex Trading Price Action

The euro has been retracing to the 2682 level, which is a resistance area on the daily chart. It just happens to also be the expected high for today - M4. I am still of the firm belief that we are witnessing yet another rally in this overall downtrend for the euro. I'm not claiming to be any sort of genius. I am simply following the Big Dogswho, as at last Friday, were extremely net short that currency. Let's wait and see what their position looks like today, when the new numbers come out at 3:30 pm ET. We also want to pay attention to where they're at with the US dollar, especially now that Bernanke is sounding dovish all of a sudden. I wish he'd make up his mind one way or the other, and stick with it. Or, maybe he should just be quiet for a while. We'll talk more about COT (commitments of traders) next week. Should be fun.

See today's chart at: www.forexmentor.com/campaign/jul2106a.gif

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