Weekend Update

EURUSD - as expected 1.1450 held & pushed this trade 170pips in my favour by end Friday.
On weekly charts (see inset), price is getting squeezed between 21 & 50SMAs, so either bulls or bears will give in very soon. I am bearish because: a) there is a potential weekly double top continuation pattern (the "M" pattern) and b) the week ended with engulfing bearish candle or rail road tracks candlestick pattern. So, I am waiting for the ST trendline break on a daily chart to short more but also aware that there are 3 important support levels in this 1.12-1.10 congested range and it is important to see a follow thru when the uptrendline breaks. I also do not want to see this pair back above 1.1460 because then 1.16 maybe the next upside target.

GBPUSD - last week I said above 1.55 will test the bottom of the uptrendline at 1.56. I was on the sidelines and did not short this pair. It needs to get below 1.55 and more importantly below 1.5450. Only then will I have confidence about its potential decline. Till then, there is nothing to do here.

  AUDUSD - the weekly inside bar worked and this pair went higher. What now? There are reasons for both bull and bear cases. I am bearish bc so far there are more reasons to be bearish
Bull: broke thru 3 month downtrendline but now it has to hold above it. Previous breaks led to retests of the broken downtrendline and to pauses in this downtrend. Daily close above 0.7264 will lead to 0.7340/70 resistance range.
Bear: a) tweezer top, b) previously only when price closed above daily 50SMA did it lead to a pause in the downtrend and with both SMAs firmly pointing downwards, it is not looking good for bulls, c) in this year long downtrend, whenever RSI fell back below 50, the downtrend had resumed and such a close below 50 looks very imminent to me.  In terms of price levels only when this pair closes below 0.7100 at least in H4 TF will I know that the downtrend will have resumed.

USDCAD - it bounced off 50SMA and is in back in the range.So nothing to do here

USDJPY - I will try shorts at 121 and 121.50/70 resistance area. Below 118.34 should target prior low at 116.15

Good Luck

Weekend Update

EURUSD - last week was another reminder for me of having Plan B at all times. Then I won't get caught with my pants down. My such alternative scenario was weekly 21SMA pushing the price back to 50SMA and when it happened I was not surprised.

On Monday the Euro retested 1.1206 resistance where I went short. The next day it initially went down (naturally I thought!!!) but then came back up to close flat. Now, that got me worried a bit.The next day my SL @1.1244 - the high of the tall red bar from 2nd September - got hit (also see H4 time frame for clearer pic). Tall bars are relatively reliable as short term trend change indicators. So when last Thursday the Euro closed above the high of the tall red bar and back above 200SMA that a test of the nearest swing high @1.1337 and/or the bottom of the uptrendline was imminent, imo.

Having lost money on the short, I did not make money on the long side either because I did not get the right setup. In hindsight, as is always, I should have been bolder.

What is next for this pair? See the chart for commentary.

GBPUSD bounced perfectly from 1.5167 support to my target of 1.5331, a resistance. I got lucky by not shorting as it was 55 pips away from 1.5331 at the close of the day, and I did not expect it to get to my target at 6am in the morning and did not have my sell limit order in place.

Anyhow, the impulsive way it moved cutting thru resistance and H4 (TF) 21/50SMA was enough indication that 1.54/1.5440 was the next target area. My buy limit @1.5335 was missed by 3 pips :(. Close but no champagne!

AUDUSD - not much to add. It also bounced off oversold levels and is testing 0.71/0.7120 resistance area. Daily 21SMA is also right above. But we have got a very good looking weekly inside bar. Previous inside bars failed but also those that did not led this pair higher. So either 0.7163 (the high of the last down bar) holds or it will climb up to 0.7215/52.

USDCAD has been a pain in the ar.e, to be honest with you but it finally seems ready for a breakout. Daily chart is showing a tightening triangle. In this case I would expect a continuation up move but just in case ready to short on a break lower.

USDJPY - see the pic

Good luck.

P.S. I wanted to share a good strategy of mine that works best in H4 time frame.

Weekend Update

EURUSD rallied the min 100pips I expected reaching 1.1332 as both rising 21SMA & ST uptrendline held but falling 200SMA pushed this pair down from Wednesday onward. My base case that I highlighted over the last couple updates, is that it is going to 1.05 at the very least. Once it closes below 1.08, I believe it will be a fast trip to 1.05 as all those who bought at this level will have to quickly unwind their positions. Shorts burned as it went above 1.1450 and below 1.08 longs will get burned. Shake 'em all before moving in it is intended direction. 

On fundamental front, Draghi wants the Euro down while US economy seems stronger as the Fed talking up a rate rise, which is USD bullish. However, i do wonder what will the Euro do if equity markets tank again.

From technical standpoint, the pair is now below 1.12 and 1.10 and 1.089 are the next stops. As simple as that. I will short if it makes a new low on Monday or  bounces back to 1.12. 

One pattern I like to trade is the squeeze between two SMAs. One such squeeze happened between 21/200SMAs last week, another is in the process between 21/50 on a weekly chart. So there is a possibility that a weekly 21SMA pushes the price back to 50SMA. There price gets rejected again and goes to my 1.05 target or lower or it hangs around it for some time and the trend changes as a result. Why? Because I noticed a noteworthy pattern regarding a intermediate/ major trend change in EURUSD on weekly charts. The trend seems to reverse when price is stuck between these two SMAs over at least 6 weeks. In the last 2 cases (Sep-Oct 2012 and Jun-Jul 2014), the pair was hugging 50SMA before turning for good.

GBPUSD did not bounce to my sell level but at least performed as expected after breaking 1.5331 support. So far it fell 9 days in a row and is currently sitting @1.5170 support. It either bounces right here or off 1.5120/00 range. Obvious short level is 1.5330 resistance. My bias is to buy at these support levels to profit from bounces BUT I am not bullish this pair especially below 1.50. On weekly charts, 2 large engulfing bearish candles already made a new swing low. Therefore, longs beware.

AUDUSD is a sick pair. It reached my 0.70 level and went further below. In the mean time no sign of weekly RSI divergence extering its influence. The next monthly target is 0.6760/85 level. A bounce back to 0.70 or 0.71 (shaded area) is a sell.

USDCAD is another weak commodity currency. It could not even rally in tandem with Oil and gave more ground instead. The short term uptrendline that it broke midweek gave no follow thru and price stalled at intraday support. I got suspicious and bailed out and so far I am happy I did. I am long @1.3238 targeting prior or hew highs but I will be watching the intraday support at 1.3116 in case it decides to finally dive back to 1.30. I do wonder however if I should be buying 1.3116 support instead of shorting its break.

USDJPY reversed from the underside of the broken uptrendline. The break of 120.64 support and then a retest of then 120.64 resistance gave  excellent shorting opportunities. Now it is in 119/118.50 support range. I will short more at 118.32 or 120.24/64 range above. If it gets back above 120.64, then 121.50 is likely the next target.

Good luck

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

Setups I am watching

Hope you all had a nice weekend and recharged your batteries for this week. I hope this week brings us a lot of pips and points :)

News out of China are not conducive to risk at all. Just a quick look at Hang Seng index confirms a downtrend break and it currently is sitting at a support.So better hold at 22440. Accordingly, Ozzie and New Zealand Dollars are also having rough time  

AUDUSD Weekly

 Daily

4 hourly

NZDUSD Daily

USDJPY Daily

 4 hourly

AUDJPY Daily

 4 hourly

 EURJPY 4 hourly

Finally Dax30 - German export powerhouse is showing signs of exhaustion....no wonder given what is happening to Hang Seng. Get the chute ready?

Good luck

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