Archive For "August, 2009"

8-17-09

5:25a GMT – Welcome back fellow piphutters! I hope you had an excellent weekend! As I mentioned last week in last week’s signals I was traveling on Thursday and Friday to the beautiful city of Denver, Colorado. Now I’m back for more! Mid-term the pair is extremely volatile with many traders getting kicked out of their positions on wild swings. Starting with the daily chart the EUR/USD is resting on major daily trend support dating back to May of this year, however it is not oversold at all on the dailies. On the hourly charts the pair is skipping off of support around 1.4140 as the pair is also skimming 30 (oversold) on the 60M chart. While the mid-term may be mixed, in the near future I am looking for a return down to 1.4100.

Trading Idea: Looking to sell near resistance currently around 1.4200 for a retest of 1.4100. Tight stops.

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8-13-09

5:19 GMT – As discussed in yesterday’s signal and as expected the rate decision was to hold steady for now, but the Fed did say that the end of quantitative easing (basically printing money to inject into the US economy) is on the horizon. Since then the pair was held under resistance at 1.4250 (the 50% fib retracement of 8/7-8/12). The Slow stochastic jumped into overbought territory and is just flipping south on the 4-hour chart while the RSI has cooled off from oversold levels and is about mid-level right now. My bias is down as I think risk-aversion will eventually enter back into the market as trader’s realize a government-driven recovery is only so good. Note to everyone: I will be travelling tomorrow and Friday so no signals! But see you again on Monday :).

Trading Idea: Looking to sell near resistance, nearest is 1.4250. If that is broken look for a challenge of 1.4300. Short targets at 1.4165, 1.4115 and eventually 1.4055.

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8-12-09

6:26a GMT – I’m out of the game for Tuesday’s trading (but will still give you my analysis and forex signal) as there is a major event risk with the FOMC rate decision. No rate change is expected but any comments about inflation, future rate decisions, etc. could cause some waves. And in these event risks the markets thin out considerably so a few big players can move the currency and make it “whipsaw”. Overall though not much happened on Monday with the pair never breaking through support about 1.4100 and never returning to challenge resistance at 1.4215. We did sell on yesterday’s signal around 1.4150 which we then later closed for a small profit.

Trading Idea: Be very careful of the event risk! I do not trade during major news events as the market is too unpredictable. However, rate decision aside I would look to sell a break of 1.4100 (sell entry at 1.4095) for an eventual challenge of 1.4000.

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8-11-09

4:34a GMT – Before today’s forex signal I just want to share some exciting news with everyone: I’ve started work on a comprehensive analysis of various trading models. I’m running analysis on 10-20 different trading systems for the past year on 4 major currency pairs. I have my own trading system, but I’d like some objective data on other systems as well. I’m analyzing most of the basics (RSI cross-overs, slow stoch flips, momentum, moving averages, and some combinations of the various indicators as well) but if anyone has a system they are pretty excited about feel free to post it below and I’ll look at including it in the study as well. Probably will take a few weeks at least to run all the tests I want to run, but it is exciting nonetheless!

We didn’t say much action yesterday as Friday’s forex signals were not entered due to the event risk. I choose not to trade news as the forex markets become very choppy and unpredictable. The net result though is that we saw a major drop in the Euro as the dollar gained strength on very positive payroll and employment data. The rally looks real as it was extended yesterday and we now have fundamentals to apparently back it up.

Trading Idea: I will look to sell on rallies, possibly near first resistance at 1.4215, which is also the 38.2% pullback of 1.438-1.410. Short targets down to 1.4015.

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8-07-09

FOREX SIGNALS UPDATE, 15:14 GMT: Job losses slowed tremendously and unemployment tapered off this month, great news for the US economy. Pair is too volatile for a good money management trade right now. Will probably wait for calmer waters on Monday to resume trading.

4:26a GMT – I bought at 1.4340 yesterday on yesterday’s forex signals as the pair dipped into oversold on the 60M RSI and the slow stoch dipped below 20. A bullish reversal doji also appeared on the 60M chart. There was a brief rally to 1.4370 before it met resistance and sunk back down (where I closed at 1.4360 for a small gain). I still favor the long, and will look to reset for a challenge of 1.4440, but will wait for Friday’s event risk to pass (US Non-Farm Payrolls).

Trading Idea: Will look to reset above 1.4340 after the Non-Farm Payrolls event risk has passed and calmed down. If the market remains ill-liquid I will remain sidelined until next week.

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8-6-09

4:07a GMT – Hard to ask for a better setup than yesterday’s forex signals – support entry was hit at 1.4360 and then confirmed with a textbook bullish reversal doji. Pair rose to hit second target within 5 hours for 85 pip gain. Techincal outlook remains the same as I will look to reset my longs again above support at 1.4350.

Trading Idea: Looking to reset long on dip to support area around 1.4350/60. Longs favored to 1.4395, 1.4445 and eventually 1.4525.

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8-5-09

5:04a GMT – Sell signal was triggered and was about 20 pips in the profit before it reversed and was stopped out (I use tight stops). After a day of a relatively tight range today’s forex signal is to buy dips. A glance at the 60M, 4-hour and daily charts will quickly tell you the pair is bullish in the short-term, the RSI has cooled off from overbought levels and the slow stoch is actually positive on the 4-hour (though is about to roll bearish on the daily charts). All and all, I am a trend trader so I will look to stay with the bullish trend and go long on a dip to support.

Trading Idea: Nearest support is above 1.4360 and I will look for an opportunity to go long here. Targets at 1.4400, 1.4445, and 1.4525.

(click to enlarge)

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8-4-09

3:03a GMT – Good thing I didn’t go with my gut yesterday! Forex signals were indeed very mixed and we ended up with a large break to the upside, over 200 pips almost to 1.4450. Pair is now oversold on the RSI for the 60M and 4H charts, rolling over from overbought on the 4-hour slow stochastic, nearing 70 on the daily RSI and overbought on the daily slow stoch. So signals are starting to stack in the overbought direction, but that is also normal in a trending market.

Trading Idea: Instead of guessing the direction I will look to buy a break of the current tight range resistance above 1.4455 and sell a break of support around 1.4385. Above 1.4450 look for 1.4495 and 1.4545. Below 1.4385 look for 1.4350, 1.4305 and 1.4205.

(click to enlarge)

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8-3-09

5:41a GMT – Friday’s entry signal was tripped at 1.4150 and hit the first target at 1.4105 for 45 pips but then quickly reversed and stopped out at break-even. Shortly after we saw a massive jump in Euro strength to around 1.4275 – since then we have seen both highs and lows above and below this number. Slow stoch is giving a buy signal on 60 min charts and a sell signal on 4h. RSI is overbought on both charts and daily has the price action at major trendline resistance dating back to 2008. If this resistance is broken it will open up the way for a restest of 1.4700.

Trading Idea: My inclination would be to sell at 1.4300, which is major resistance, but markets are mixed and direction is not clear. I will wait for a more clear signal.

(click to enlarge)

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