Weekend Update

EURUSD - my plan was to hold my longs to & sell short @1.1450. Then buy the retracement to target 1.16 and if lucky 1.17 since above 1.1450 my target was 1.1685/1.1750. Well, I got incredibly lucky because when I checked prices early Monday morning, Euro was already trading above 1.1450 and so I held on till my original target. I was not there when the Euro spiked but I was pleased to find out it was @1.1714, the middle of my target but less please to have missed the short.

So what do I make of this spike. First and foremost, lots of shorts got burned and now that they are gone, the Euro's path of least resistance is likely down ( I got this idea from Gann). Second, we have 2 almost equal legs, an ABC retracement in Elliott Wave speak. The only way I will know that the downtrend has resumed is when we get a daily close below 1.0808. Then, 1.05 will be the next stop and parity below 1.05.

What if it is basing? After all, it is in a range for the last 5 months. It is possible, anything is possible. It can even bottom at 1.05 making a double bottom. One thing to note, is I have these spikes before trend changes but if it gets back above 1.1388, I will have to seriously consider trend change.

In the near term, it closed right at the ST uptrend with RSI @50, support level. So, I am looking for at least a 100 pips bounce to 1.1280-1.13.

GBPUSD - broke 1.5670-1.57 - the top of the ascending triangle - with a good looking bullish candle only to slam down along with the Euro producing a large weekly engulfing bearish candle and breaking a rising medium term (MT) uptrendline from May 4th. Therefore, I intend to sell the bounce to 1.5487 and max 1.55. Below 1.5331, my sell break area, paves the way to 1.52 & 1.5120/1.51.

AUDUSD broke thru the bottom of the descending triangle @0.7252 & then came back to retest it shy just 3 pips. As long as it is below 0.7252, it can still get to 0.70 and the RBA event next week could be the trigger. The only snag is the developing weekly RSI divergence. I hope this divergence kicks in @0.70 and if so should produce a rather large (300+ pips) bounce.

My previous week analysis was good and a retest was even better but my trading was simply crap, still trying to figure out why i did what i did.

USDCAD daily RSI divergence prevailed and I think the space between rising 21 and 50SMA is where price is likely to fall. For a start,  a close below 1.3143 - prior swing low and just below a rising ST uptrendline - will target 1.30/1.2951 area at the very least. Till then observe only as this pair is trading off crude oil price movements, as usual having strengthened the last 3 trading sessions while all other majors got trashed.

USDJPY went past and beyond all my expectations. I made some money shorting it but in hindsight i left much more on the table. C'est la vie. So far monthly resistance from 2003 and 2007 @124/125 is holding and this one was one violent break and a bounce. Now it is at a resistance and an uptrendline break point. Either it reverses here & falls below 120.64 or it rallies to 123. While I think a retest of the lows or at least halfway to it is probable I am a bit wary if this bounce and wonder if it actually goes to 123 first. Anyway, I have got my eyes on you Mr Yen, ready to short at any time.

Weekend Update on Majors

EURUSD broke out of inner range @1.1210/15 having made a W bottom and 1.1450 is the next stop. W bottom target is 1.16. Also for the 1st time over a year this pair closed above 200SMA. which is bullish although I am not sure this IS the change of trend. Nevertheless, 1.1450 resistance looms large with RSI getting overbought and is a perfect spot to take profits and short. But if euro gets past this level, then 1.1685/1.1750 should come next.

 I am long from 1.1210 with a little top up around 1.1275 holding to 1.1450


GBPUSD no meaningful change from last weeks analysis. Cable broke out of the ascending triangle but follow thru so far is weak with long daily wicks on both sides . I am long since last Tuesday but patience is wearing thin and now wondering if a test of 1.56 is in the cards.

AUDUSD what seemed to me like Eve and Adam double bottom more looks like descending triangle and a daily break of support @0.7252 will confirm downtrend continuation to target 0.7015/50 range.

USDCAD - last week I mentioned weekly RSI divergence. Well, no divergence till we get a reading below 70 first. Instead my alternative bullish scenario is in play and as expected such crosses as EURCAD and GBPCAD performed spectacularly.

USDJPY - I sold the break of the ST uptrendline @123.81 I mentioned in my last post and managed to accidentally close the position at 122 (annoying) but I will short it on any rebound especially if it gets to 123. Today it opened lower and is testing another rising uptrendline @121.67 and is within 121.54-120.64 support range. I think a test of 120.64 is a near term possibility.

Have a look at Nikkei chart: on a 4th test it closed below a support at 19K since last March. I will happily short it on any rebound.

Have a nice week

Weekend Update on Majors

EURUSD is in a range. The plan is to trade inside both smaller and larger ranges. The middle of the range is at 1.1000/17 area. A range low of 1.0808 has become very important and a break of which will resume downtrend to 1.5000 or lower.

GBPUSD is coiling within Ascending Triangle (Right Angle Triangle) and I am betting on upside breakout. Got a small long position from this Friday @1.5660 (talk about impatience?!). If it breaks upwards, then target is prior high at 1.5862/1.5920 area which happens to be Fib 50% retrace from last year high to this year low as well. 

If it breaks down below uptrendline (sub @1.5500 currently), then this pair targets 1.5200 first. 

Another target:  June 17 high to July 07 low is roughly 590pips long. Subtracting it from 1.5670 high arrives at a downside target of 1.5080.

AUDUSD monthly support @0.7250 held and below that the next monthly support @0.7000/15 is next. Weekly RSI is showing a nice divergence and I am willing to play the long side. I would like to buy @0.74285 and target 0.7585-0.7600. I also see a mini Eve and Adam Double Bottom on a daily chart is  which is encouraging as it showed up after 800+ pips fall since May 12th. This pattern is 180pips wide and from its neckline @0.7430, we arrive at a measured target of 0.7610.

USDCAD is the weakest and is highly correlated to crude oil. Latest weekly high came on RSI divergence and either a break below 1.30 or weekly RSI close below 70 will confirm the divergence to target 1.2779-2800 area, to begin with. On a daily chart, I am also waiting for a small uptrendline break to confirm retrace.

Aware that my analysis suggests bearish USD stance, I am willing to trade trend continuation on the long side if USDCAD breaks through trendline drawn from recent highs.If this pair weakens further, then I will also look at the cross currency play via EURCAD or GBPCAD.

USDJPY - last 3 weeks had long upper wicks, so some parties are definitely buying the yen. It is in a congested zone with many support ranges below. Currently I am watching a short term daily uptrendline for a break. On the other hand bearish engulfing candle a couple of days ago gave no follow thru and I will be watching to buy at its high should price reverse higher instead.

Good luck next week