11-16-09
5:14a GMT – Welcome back for another week! I hope everyone had a nice, relaxing weekend. As mentioned on Friday I stayed on the sidelines for the day, however anyone who entered at the 1.4930 resistance did hit their first target, but since then we have seen further EURUSD gains that pulled the pair into the 1.4970 area. I’m going to change it up a little this week and start with a weekly outlook (with the regular daily signal underneath).
Weekly Outlook: As I frequently mention larger timeframe charts yield more reliable signals to enter trades. Too often (and I am as guilty of this as anyone) we become comfortable in our “home” timeframe of 4h, 1h, 30m (or less for some traders) and forget that our timeframe is just a part of the larger forces driving the market. Hopefully with this weekly outlook we can take a step back from our “home” timeframes and view the larger currents under the EUR/USD.
Most noticeably on the chart below (daily) we can see that the EUR/USD has been in a clear uptrend channel for months now. In fact, you can continue backing out and see that the pair has really been in an uptrend since October of 2008 (though we did see dramatic volatility around that period as well). If you back out to the monthly chart we see that the uptrend has actually been going strong since 2001! What does that mean for us, the lonely day traders of the markets? Basically if we had entered longs instead of shorts on almost any trade we had a higher chance of success – it is the difference between swimming with the current and swimming against the current. And in the past 6 months especially the bull-current has been STRONG.
Where is the pair going? Well if the trend holds, then ‘up’ is the easy answer. However we did see some selling pressure last week and last week’s candlestick even resembles a weak shooting star on the charts – meaning we could see more weakness heading into this week. I say it is a “weak” candlestick though because it doesn’t appear at the very top of the uptrend (so it is not an extinction candle) – in fact the peak of the star doesn’t even pierce resistance above 1.5060. The reason the dollar has been so weak (and subsequently the EUR/USD so bullish) is because of the carry trade – US interest rates are at historic lows and the Fed has made it clear that it intends to keep them that way. Because most of the economic news coming out is generally positive big money (banks, hedge funds, etc.) have shorted the dollar to collect the interest they get with it against higher yielding pairs such as the Euro. Until we see a fundamental change in either a) interest rate outlook, b) economic outlook, or c) major profit taking then there is no solid reason for me to call a top yet. Therefore, as much as I would like to be bearish in the pair I remain bullish and think that any losses will be capped by the blue trend support currently around 1.4750.
On a side note on the chart below we can see that volatility in the pair is actually down quite a bit to an average true range of 100 pips per day (from 200 pips per day range in April 2009). Usually when there is a strong trend like this volatility does decrease, but this could also set us up for a major breakout.
(click to enlarge)
Daily Outlook: So I’m bullish on the week. But where does that leave us today? We saw some profit-taking last week – but EUR/USD losses were limited late Friday as the pair rallied back up above 1.4900. In the short-term I am looking for a drop to the trend support around 1.4800, and I am a bit bearish below last week’s top of 1.5050. Therefore I will look to sell on a rally below 1.5050, preferably around 1.5015.
Trading Idea: Look for shorts below 1.5050 with targets (from 1.5015) at 1.4980, 1.4950, 1.4915 and 1.4880. Above 1.5015 look for a re-challenge of 1.5050.
(click to enlarge)
Site Update: Quick site update for you. I mentioned that I was looking to launch something exciting for you this week and while I did get it completed and ready to go I have not had time to write an article on the best way to use it. Basically you probably recall I’ve had quite a few people ask for a candlestick article, which I’ve been putting off a little because there are a lot of decent candlestick articles already existing out there. So I wanted to do something different. Something more useful for you besides just another article. More news on what exactly that is tomorrow…
Also there has been quite a lot of interest in economic news recently. Thanks to Ed for periodically posting economic news for everyone to read, but I’ve gone a step further and added an economic calendar to PipHut. You find that here. There are a lot of great features on the calendar including if you click any event you can see more details about that event, you can see the forecast and previous results and you can see the general importance of the news. Check it out!
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November 16, 2009 at 06:44
You said that EU could reach around 5050,and we should entry Sell below 5050.Is that mean we can entry Buy hopefully it’ll really reach at least 5015 before we entry Sell?
November 16, 2009 at 08:51
why would you do that ?
it might reach 1.5050 but if its not and goes only to 1.5000 ???
1. you will have a loss on your long trade because it will not reach your TP
2. your entry order at 1.5015 will not get hit
you end up with 1 loosing trade and miss your short trade ….
Thats one scenario if it goes 1.5000 and goes back down :/ it might goes pass 1.5050 :D or drops down from where it is nou :D heheh
November 16, 2009 at 07:02
Mark, I like the weekly update! I gives you a better idea!
Thank you very much!
I love you site
:)
November 16, 2009 at 07:39
Mark,
I appreciate the weekly update, as well. Also, I am happy that you have added the economic calendar/information. It is good to have all here on this great site.
November 16, 2009 at 08:01
thanks mark for your hard work
November 16, 2009 at 08:41
Dammmn :) weekly outlook + daily signal looks great !
And economic calendar is great to ! Thank you !!!
November 16, 2009 at 08:57
mark, glad to see that you’ve added economic calendar coz that’s vital in timing the trade. maybe later on you could add comments on gold and S&P since they have much influence on EU these days.
anyway, after having followed you almost a year, i find that your analysis/signal has been the most precise and easy to follow.
i learned a lot from you..thanks mark.
November 16, 2009 at 09:31
Thanks Mark for the weekly outlook and the economic calender. How can I confirm that a resistance is not broken? Is it by price piercing through it and closing below it on 1hr time frame? And since resistance is a zone, how do we confirm an exact level we have watch out for?
November 16, 2009 at 14:37
Which resistance are you looking at? Might be easier to answer if I could see it.
November 16, 2009 at 14:54
I am looking at resistance at 1.5060, assuming price reaches up to that how can I confirm that it is not broken?
November 16, 2009 at 15:09
Got it. It always depends on how aggressive/conservative you want to be. The more aggressive then the more false signals you will fall for but the more conservative the more signals you will miss out on (or get a worse entry price).
For example, if you are very aggressive then a close above resistance on the 15m charts might be enough for you. If you are very conservative then it might take a close above on the 4h or even the daily charts (note I’m talking about a close, not a wick or high).
Personally I like to be somewhere in the middle of the aggressive/conservative spectrum so I usually look for a close on the 60m charts. Sometimes 4h.
November 16, 2009 at 15:38
Does it then mean that if the price misses to pierce that level by a pip or more we can wait for another candlestick to pierce it? And by many much pip show it close above it on H1 tf before one could say it has been broken? I am asking all these because right now I have another scenario on another pair. Thanks.
November 16, 2009 at 15:49
It all depends on the setup, the volatility, how strong the resistance is, etc.
What pair/level are you looking at?
November 16, 2009 at 15:55
The cable(gbpusd). I have a resistance drawn around 1.6760 and 1.6780, and price has just pierced the first resistance
November 16, 2009 at 16:03
Hmm I wish I had a hard and fast answer for you here but how many pips above a close must happen is really a matter of how strong you think that resistance is.
My personal analysis of cable doesn’t have strong resistance until closer to 1.6800.
November 16, 2009 at 10:53
There is a nice shooting star on the 4 hour chart (7am gmt candle closing in 8min @ 11am). It didnt reach marks entry point but i think ill enter on this candle
November 16, 2009 at 12:46
Nick are you still short?
November 16, 2009 at 12:52
Yes nothing changed that much yet.. theres news in 30min thou so be careful
November 16, 2009 at 13:15
Hey guys, are you ready to Step Up?
Mark is giving us a full meal
thanks Mark.
November 16, 2009 at 13:19
so u guys going short now? before going long after it? i mean is what mark indicated happening now?
November 16, 2009 at 13:45
Anyone know what the difference between the “core retail sales” and “retail sales” report? Im trying to figure out if the outcome was positive for USD or negative, im guessing possitive but, im not sure.
November 16, 2009 at 14:21
Markus,
Just go to Mark’s Currency Calendar and open the little blue cross box ( its all the way to right ). There you can get more detail of the news event. Also, its good refresh the calendar to get an update of the news event.
November 16, 2009 at 14:24
yeah, ok, thanx. But, where is it? Cant see it
November 16, 2009 at 14:28
Never mind i found a link in Marks txt.
November 16, 2009 at 14:35
It also in the drop down in the Forex Tools tab at the top of the page. Great Currency Calendar IMO.
November 16, 2009 at 14:33
Mark has a hyper link to it in his commentary. But here is the addy…..
http://piphut.com/forex-tools/forex-calendar/
November 16, 2009 at 15:53
Mark, first i wish to preface my remarks with an appreciation for the work and effort you place here.
But i must wonder if these changes are all good. PipHut was a great site before because of it’s simple theme.. ONE high probability trade per period and only that info directly relevant to execution and management of that trade.
i’m not so sure that the recent changes are for the better.. “watering” down that beautiful simplicity with such things as “econo calendar” etc that many or most cannot interpret and not DIRECTLY germane to the execution of call.i can get an econo calender anywhere.
November 16, 2009 at 16:26
Alvin, thanks for your input.
I have added new tools to PipHut (pivot calculator, economic calendar, etc.), no arguing that, but I see these as more of convenience factors for the PipHut community. Sometimes I forget to mention certain economic news/event risks and I want to make members aware of these events. With these “extras” I see them more as they are here if you need them, but the signal is still the signal.
To be fair also I still offer the same daily signal I always have and, if anything, I think that signal has gotten a little more clear, more refined recently than it used to be (especially with the FAQ and How To articles)
That being said I definitely don’t want PipHut’s message to become “crowded” or “watered down” and I’ll have to re-evaluate to make sure that is not happening. Perhaps a bit more prominence for the signal itself on the page?
November 16, 2009 at 16:43
Hi Mark,
In my opinion the signal is not independent of the sentences that go with it. For my own past experience I guess that if any trader (specially newbies) goes and see a “proeminent” signal on the page they will not read the setup and will just enter the signal into their broker service. One of the most important things I’ve learned in Piphut is that is not the price, but the candlestick formation the most important signal to enter a trade. Therefore I think that they are very well together!
Regards, Nuno
November 16, 2009 at 16:43
We have to also remember that there are Piphutters with different levels of experience and whether some information is on the site or not is useful might depend on the Piphutter. I, for one, find this information very useful and helpful because as a new trader I really didn’t know where to find this information or when I did find the information, I didn’t know if it was reliable. I feel more confident in using the things found on the Piphut site. I also like the fact that I have one less website to navigate too to find related information.
November 16, 2009 at 17:39
Can someone explain what just happened?
November 16, 2009 at 17:42
Fred Bernanke’s speech
November 16, 2009 at 17:54
I was long @ 1.4945, sl @ 1.4910 was not aware of such speech
November 16, 2009 at 18:06
It was actually listed on the economic calendar Mark linked us to today.
November 16, 2009 at 17:48
Bernanke is speaking about the economy, u werent long were u? Im not sure what he is saying though.
Gonna stay out of this for a bit until it settles down.
November 16, 2009 at 17:52
Seems to me if you trade on the news it’s like jumping in a pond full of piranhas. ;-)
November 16, 2009 at 17:58
Agreed. Hungry piranhas that eat stop-losses for breakfast :). I avoid big news like the plague for my day trades. It’s darn near impossible to get a decent risk/reward ratio.
November 16, 2009 at 18:17
Why was gbpusd not affected by that event?
November 16, 2009 at 18:42
It was just not as much. EURUSD dropped 100 pips, GBPUSD dropped 30.
November 16, 2009 at 17:53
there´s an issue with calendar display? or its just my pc?
November 16, 2009 at 17:59
What’s the issue? Try maximizing your browser. If that doesn’t work what is the resolution of your monitor?
November 16, 2009 at 19:05
doesnt work, my resolution is 800×600
November 16, 2009 at 19:16
At the moment the minimum resolution the calendar will display correctly for is 1024×768. I don’t have a quick fix for that at the moment but will look into it. Sorry :(.
Maybe it’s time to get that new monitor you’ve been wanting :).
November 16, 2009 at 19:17
ok, thanks for reply
November 16, 2009 at 17:57
Looong speach, im having trubble understanding it all. wish he would just give a thumbs up or down, hehe.
November 16, 2009 at 18:01
Getting to that time of year when sudden violent ccy fluctuations can be common.
November 16, 2009 at 18:43
Its more volotime at certain times of year?
November 16, 2009 at 18:44
*volatile (sry)
November 16, 2009 at 18:49
Mark
Thx for the eco calendar. Your’s are the only one that I know of that contained more detail. I will surely not be looking at the others in future. I thought a sl of 50 will suffice. I forgot about the speech and made food for the family ….. and … I was at a good wicket… flip!!!!
November 16, 2009 at 18:51
Hi Mark,
Another tool you might want to consider adding “Forex Market Hours”. I find it very useful. Maybe other would too?
Just a thought. Thanks!
November 16, 2009 at 19:39
All I want is one high probability CALL per day (per pair) with S/R’s, and any heads up on the occasional fundie/news that may be significant for that trade on that day. The rest is noise to me. Too much extraneous analysis and i start to freeze up and stop taking trades because i don’t know how to assimilate its significance to THIS current trade. “paralysis by analysis” Just my opinion.
November 16, 2009 at 19:46
Alvin, I would recommend all you look at then is the “Trading Idea” – just 2 sentences with Support and Resistance. For a little more in-depth you could read the “Daily Analysis” – 4 sentences.
November 16, 2009 at 19:50
Just to clear up any possible confusion too – the “weekly outlook” piece at the top is a ONCE a week thing for Monday morning, not every day. Every other day will just be the regular daily signal.
November 16, 2009 at 20:02
Thanks Mark for the time spent in your analysis and huge effort to put this site up!
November 16, 2009 at 20:04
:)
November 16, 2009 at 20:36
Me thinks you speak for the majority David! ;)
November 16, 2009 at 20:46
Mark all the work you do is great ! I think every one apresheate it and all those new ” toys ” are usefull :)
instead of jumping from one website to another we get it all here :)
If some one doesent know how to use them can ask how and i think there will always be one who will help … if its still to complex for some one then DONT USE THEM :D hehehe
ohh by the way entry order was missed for 0.5 pip hahahahah
November 16, 2009 at 20:53
i mean i place two orders one exactly at 1.5015 and one more a bit higer …
So any ideas will it build a base on top of 1.4950 and continiue to go up or down ?
November 16, 2009 at 21:46
I have questions…
Gold, how high can it go, whos buying at these prices? Must go down soon, no?
And isnt the USD and Gold connected more or less, so if gold goes up, so must the USD, Or am i wrong? (Im thinking about the federal reserve, i think)
November 16, 2009 at 22:07
gold up, USD down (so EUR/USD goes up). This is because gold is generally seen as an inflation hedge. So if the dollar is doing poorly or forecasted to do poorly people will put money into gold to balance out their portfolios.
gold and AUD/USD have the best correlation. From 2002-2005 US gold prices and the Aussie had a 90+% correlation.
November 17, 2009 at 04:35
Good info!! thks
November 16, 2009 at 22:53
K, Thanx for answer both of u. That explains alot.
I have another one…
When the S&P500 goes down USD goes up, but not necesarely the other way around. This is your experience as well right?
When USD is doing porely Gold is up. Is Gold likely to go down when USD is moving up again?
And Is there anytihng that effects the EUR in a similar way?
Hope i dont bother u guys too much with this stuff, im just curious.
November 16, 2009 at 22:03
Normally gold up and USD down, some think gold is going to 1300 with corrections along the way, the timeframe would be any ones guess
November 17, 2009 at 04:57
Hallo Mark
Thank you for a great site!
Today I have an question about the gbp/usd?
On the hourly graph, I see a perfect shooting star??!!
Do you think it is now a good time to sell the gbp??
Beacause of that shooting star?
Thank you Mark
November 17, 2009 at 15:18
Take a look at the AUDUSD. is that not a hammer on 1 hour chart at 7.00 am NY time?