Archive For "October, 2009"

Today’s EURUSD Analysis: Short for yesterday was stopped out for a small loss yesterday as US GDP grew by 3.5% – more than expected and technically signaling an end to the US recession. There is still a lot of weakness in the US economy and much of that growth was driven by government programs/spending, but US stocks rallied nonetheless driving the EUR/USD past resistance levels. I talk about this a lot recently but you have to watch US stocks closely in this risk-appetite driven markets. Strong US stocks signal risk appetite which means the higher yielding Euro will perform better than the record-low interest rate USD will perform poorly. Yesterday was the strong day for US stock markets in 3 months – and the EUR/USD rallied over 100 pips.

Currently the pair is consolidating its gains in a tight 1.4820-1.4855 range which could make for a nice breakout.

Today’s Trading Idea and Signal: On the 4-hour chart we have a nice flagpole with a consolidation pattern forming in a flag pattern. Bias is to the upside. I will look to buy a sustained break of 1.4865 or, if the 60M candlestick is bullish buy near the bottom at 1.4820. Long targets would be 1.4895, 1.4925 and 1.4955. On a sustained break below 1.4815 my tendency would be to sell a rally for a re-challenge of 1.4750.

Have a great weekend all! I should have time this weekend to do some of the things I’ve been meaning to do with PipHut (candlestick article, update “How to Use PipHut’s Signals”, etc), and should be able to fix the loading problems some of our international users are having. Happy Pipping and have a Happy Halloween!

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10-29-09

4:46a GMT – The USD has made an amazing recovery against the Euro in recent days, and signals might point toward a continued recovery Thursday. We have two event risks with the EUR/USD we will have to watch closely to see how the market reacts: the US GDP in the afternoon and Germany’s unemployment rate in the morning. As always recently the USD is also heavily tied to the performance of US stocks – a recovery in US stocks will likely mean an increase in the EUR/USD as risk appetite creeps back into the market.

With over 300 pips dropped in 2 days we are at risk of a better correction in the pair, but we will continue to sell the trend and look to enter shorts on rallies and bearish candlestick signals near resistance.

Trading Idea: Prefer shorts under 1.4800 (first resistance at 1.4750) with targets at 1.4755, 1.4725 and 1.4680.

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10-27-09

5:38a GMT – The problem with trend reversal signals is that technically when you back out to a larger timeframe any “reversal” just looks like a minor correction in the overall trend. We have a similiar situation today with the EUR/USD as it approaches its daily trend support. You can see just the edge of it in the below chart (the thick blue light at the bottom right) currently at about 1.4725. The only real way to confirm a trend reversal is with fundamentals, and we have had the same mixed fundamental picture for awhile now. As the US economy gets better and interest rates are at an all time low the greenback has suffered against higher-yielding currencies as risk-appetite increased. For USD strength we either need bad US economic news or very bad Eurozone news (to show that the world economy is still struggling). Without changing fundamentals we are probably just seeing a price correction and some profit taking. Well yesterday we did get some bad news as US consumer confidence unexpectedly dropped below 50% (a slight increase had been forcasted) and home price index continued to contract. Today we have Germany’s consumer report and that could give us some direction in the EUR/USD short-term.

But since the short term 60M trend is down I will continue to look to sell rallies at resistance but I will set my target at that thick blue daily support as I expect congestion there.

Trading Idea: looking to sell a rally below the 1.4870 resistance area with short targets at 1.4835, 1.4800 and 1.4770. If 1.4870 is broken without signal look for a challenge of 1.4925.

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10-27-09

5:26a GMT – And boy did they come out swinging! The pair dropped over 200 pips yesterday (wow), the single largest move in a couple of months. The uptrend had been so calm recently you could almost feel the big break building up. Does this mean more volatility will return to the pair? We will have to wait and see, but it could mean we’ve reached a point where the dollar bulls won’t sit on the sideline any more and we might see some more range trading. Signals for Tuesday are mixed after the incredibly bullish day and I will look for good candlestick entry points near support and resistance, though I have a bearish leaning. Remember to always use good money management and never  trade more than you can afford to lose!

Trading Idea: Look for candlestick entries near support/resistance (red lines on 4h chart below). I will especially be looking for short opportunities near resistance at 1.4950 with short targets at 1.4915, 1.4880 and 1.4845.

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10-26-09

7:02a GMT – Welcome back for another week of trading PipHutters! The upgrades over the weekend went well – no major issues and everything seems to be working well. If I’ve been a little slow on responding to comments recently I apologize. There is a lot of things I’m working on right now for PipHut (while still trading myself!) and time seems to be a precious commodity. Luckily we have other traders here who can carry on the discussion!

We are coming off another good week last week, and the price for the EUR/USD is teetering on the recently-established 2009 high as the USD continues to show amazing weakness against the Euro. With a strong uptrend on the larger timeframes we will continue to look to buy dips, however cautious of a potential larger correction.

Trading Idea: Initially I’ll be looking above the 1.5000 area (38.2% retracement area) where we saw congestion last Friday, with long targets at 1.5030, 1.5055 and 1.5090. If 1.5000 is broken look for a challenge of 1.4970 and 1.4050.

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UPDATE: 16:42 GMT – Got it up and running again and everything looks normal. If you have any issues let me know, otherwise signals as normal on Monday!

PipHut will be down starting around 5:30p EST and go into the weekend! I’m going to upgrade some backend stuff (nothing you will notice) to prepare for the Signals Service and Forums coming out soon.

If all goes well (wish me luck) PipHut will be up and running by end-of-day on Saturday.

Thanks and see you next week!

10-23-09

5:55a GMT – Good pips off of yesterday’s signal. It’s finally Friday and it couldn’t have gotten here a day too soon! I usually play it conservative on Friday’s (don’t like being in a shaky trade over the weekend) and today is no exception. We saw a new high a few hours ago around 1.5060 – which took the form of a shooting star! Stocks and dollar are overbought and some profit taking that rallies the USD would not surprise me. Of course, a Euro rally wouldn’t surprise me either – not much surprises me any more! Aggressive traders can look to short this for some pips, but the general signal of this post we will continue to look for buying opportunities on dips as that is the direction of the overall trend. Conservative dip would be to 61.8% fibonacci retracement around 1.4950.

Trading Idea: Looking for bullish reversal signal above 1.4950 to get in another long with targets at 1.4985, 1.5020 and 1.5055.

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10-22-09

5:09a GMT – Kind of a long post today. A few quick housekeeping things and then onto today’s signal. First off a “thanks” to everyone who continues to drive the discussion here at PipHut. PipHut was always meant to be a community of traders and everyday it seems to feel more and more like a “community”. Don’t be afraid to jump into the discussion whether you are new or experienced – all viewpoints are welcome. I’m glad I can contribute to your growth as a trader but there are plenty of traders on PipHut and if everyone helps each other, then we all benefit. So thank you and keep up the good work!

A few site updates:

1) Signals Service the PipHut signals service continues to move forward with very impressive results. All signals are entry (so you get advanced notice of a trade – not a notice telling you the trade has already been entered). The pairs it is currently working for are EUR/USD, GBP/USD, USD/JPY, GBP/JPY, AUD/USD, USD/CHF, CHF/JPY and EUR/GBP. +300 pips yesterday :). Update: the signals service is NOT released yet if you are looking for it or emailed me about it! I’m looking for a mid-November release date.

2) Candlestick article – still in the works. Hopefully out by Sunday. I’m trying to make it more than just a “here is what a candlestick looks like” and give it much more useful and specific information. For example instead of “A doji has long top and bottom wicks and a skinny body” it would say “A doji has long top and bottom wicks, skinny body AND works best on EUR/USD and GBP/JPY when the piercing wick is at least 10 pips above….. etc. etc.” So much better, more actionable information.

3) New forums are coming. I love the discussion we have at the bottom of each signal and those will always continue, but there are some discussions that could continue day after day, need more space, etc. With a forum you can also build your own profile, start your own threads, etc. I know PipHut has forums already but, to be honest, they are not that user friendly and as such I haven’t made them a big part of the site. That is going to change.

Those are the big three things I’m working on at the moment. In the forums too I’ll be posting various indicators, EAs etc. as I know people like those. Thanks again to everyone who makes PipHut a community that people like to take part in.

OK, today’s signal! Netted 60 pips on the EUR/USD signal yesterday. It rose an additional 40 pips after that but I stuck to my trade plan and cashed out. I’m glad that some of you were able to profit off the GBP/JPY tip as well! Normally I don’t post my analysis for the other pairs I trade but that one was too juicy looking to pass up :). That’s what the Signals Service will be for!

Yesterday we saw the big psychological barrier at 1.5000 broken. Almost all analysis I read has the USD as oversold, but right now we don’t have any good technical reasons to go against the trend so we will continue to look for buying opportunities. We do have to be vigilant though because what we could be seeing is a false breakout of 1.5000 on the larger timeframe charts which would be a very bearish signal. But we haven’t seen that yet… Currently the pair has fallen back below 1.50 but is finding support at the 23.6% Fibonacci level of the day’s high/low.

Trading Idea: Looking for a bounce or a bullish candlestick signal around the 1.4950 area. If that area is broken then look for a challenge of 1.4900. Long targets from 1.4950 are 1.4985, 1. 5015 and 1.5045.

(click to enlarge)

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10-21-09

5:08a GMT – Not much happened with the EUR/USD yesterday overall. I did go long (as mentioned in my comments section of yesterday’s signal) after the hammer candlestick bounce at 17:00 on the 60M chart just above 1.4900 (which was the 61.8% fib retracement of the 1.4830 low) and one of our support levels. That was closed out for a small 30 pip profit at day’s end. While yesterday was a bit bearish if you back out to the 4h chart you can see the mid-term uptrend is still very much intact (I wouldn’t consider a major bearish move unless 1.4820 was broken) so I will be looking to buy on dips.

Trading Idea: First support level to look for dips is obviously the 1.4900-1.4870, with the next range of support between 1.4840-1.4820. From 1.4870 my long targets are 1.4900, 1.4930, 1.4960 and 1.4995.

On a side note the GBP/JPY has been consolidating in a tight 1.47-1.493 range since gaining 800 pips in about a week. Looks like it is due for a breakout when it leaves the range, and technically that appears to be leaning toward an upside breakout.

(click to enlarge)

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10-20-09

4:26a GMT – Well if you entered long at 1.4970 from my comments yesterday go ahead and close for a small profit now. Earlier signal at 1.4920 was never tripped as EUR/USD blasted through resistance on the 60M chart without flinching. I have to admit I am not real wild on buying the EUR/USD at this level. The pair has been very closely tied with US stocks, and those stocks remain overbought and are in need of profit-taking. However, with the Fed seeing no signs of easing back on the money printing it is feasible we will see continued USD weakness. Therefore, I have to go with the tried and true and continue trading with the trend, which means buying on dips near support.

Trading Idea: We have support at 1.4950 (23.6% fib), 1.4930 (38.2%) and above 1.4900 in the area of the 50% retracement and former support. Starting from 1.4900 we have targets at 1.4940, 1.4970 and 1.5000.

(click to enlarge)

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