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.