6:45a GMT – Last Friday’s trade went off smoothly for 130 pips profit. We had a nice long 1h wick in our support zone; combine that with a nice bullish doji on the 30m charts (reported at the candlestick alert service) and we had a good reason to enter the trade, in the direction of the trend WITH candlestick confirmation. This is the essence of PipHut style trading.

Quick note to all those new to PipHut. Please read the FAQ for PipHut’s Signals and the Read Me: Using These Signals for more answers to common questions on PipHut. Just a reminder: PipHut does NOT use technical indicators for analysis/entries. If you read a comment about a technical indicator that is an individual PipHut community member using that indicator, not me :). Also, with the holiday and recent website changes I have been slow in getting back to some emails and forum posts. Sorry about that and I will definitely catch up with you this week! Enjoy today’s weekly and daily analysis below:

Weekly Outlook: Pair continues to be completely bullish on the daily and weekly charts. Price action has been constrained to a fairly narrow bullish channel since the beginning of 2009 when the price had a low of 1.2456 in March! In fact, in case there were any doubters of the technical aspects of this trend we were also rewarded with a very bullish looking hammer on the daily charts Friday of last week.

Daily Outlook: Given the strength of the daily trend and the bullish hammer on last Friday’s daily chart we will continue to look for dips to reset longs on going into Monday of this week. Nearest support I would look for a buy signal is the 1.5000-1.4980 support zone.

Trading Idea: Looking to buy a failure of the 1.50-1.4980 support zone, preferably with candlestick confirmation signals. Long targets from 1.4980 are 1.5015, 1.5050 and 1.5080.

(click to enlarge)

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Source: Forex Signals – EUR/USD What do last week’s moves mean?
Forex signals from: PipHut.com

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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Source: EUR/USD Weekly Outlook and Daily Signal
Forex signals from: PipHut.com

3:56a GMT – Here we are, about to start another week, almost at the end of July. Time really flies doesn’t it? Just a little reminder to everyone to take a little time out now and again to take a walk, spend some time with your family, do something fun just for yourself. Life is too quick for all business! Anyway, on to the signals!

I wanted to pull a weekly chart for us to look at as we enter this new week to get some perspective on the recent price action, which has seen the dollar lose a lot of strength in the past week and then range with Euro. As you can see from the chart below in 2005 the EUR/USD was just beginning its ascent to all time highs around 1.60 that we saw in late 2007 and early 2008. In the end of 2008 we saw an extremely large drop (over 3500 pips) in just 4 short months. This drop occured as extreme risk-aversion entered the market, investors took money out of the carry-trade and other investments and sought the relative safety of the US dollar. Since then it has been a story of risk-aversion as investors battle positive news with general market jitters and the desire for more risk.

Currently the pair is hovering just above the 50% retracement of the major drop in 2008, and also just below the declining trendline of the 9/21/08 and 12/14/08 highs. You can also see that the slow ss is just about to enter overbought on the weekly, while the RSI is slightly overbought at 60.8. It is for these technical reasons that I remain generally bearish, though I think the EUR/USD has a little bit of room to increase until we see a little more overbought levels. The big key is to watch economic news coming out of the US and Eurozone. Positive news will lend itself to more risk and a spike in the Euro.

(click to enlarge)

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Source: Forex Signals – EUR/USD Weekly Outlook
Forex signals from: PipHut.com

01:06 GMT – Part of being a successful trader is looking not only your own “comfort” chart time but also looking at the bigger picture as well. This week I chose to post my weekly chart analysis for EUR/USD, GBP/USD, USD/CHF and USD/JPY. I do the analysis on all the pairs I trade, and recommend you do the same for the “big picture” but don’t have time to post them all.

Want to see a different pair next week? Post your comments below!

EUR/USD: As you can see on the chart below the EUR/USD is still firmly in an uptrend unless a clean break of 1.5284 is made. EMA20 (green line) has been acting as good support for the pair since early 2007 and last week showed us a strong bounce of this support. A close this week above 1.58 would confirm the resumption of the uptrend and is likely. The last time the weekly charts looked as they do now was in late 2007 when the pair was in a 1.43-1.50 range, which ended up breaking to the upside off a bounce of the EMA20 and challenging 1.60. Look for a similar result in the coming weeks with a challenge of 1.70.

USD/JPY: I believe that since 6/07 the UJ pair has been in a good Elliot Wave model drop with the rally below 100 the last hoorah of the 5th leg. Whether we are in the 1st leg or the 3rd leg of the retracement is a matter of debate (what’s not in Forex? ;). Last week’s candlestick was bearish but did make a new high and showed decent buying pressure. I don’t believe the doji means much considering the pair has been in choppy trading for the past several weeks. I expect to see more gains this coming week, but this next week will help to show the direction of the pair. Also the RSI closed above 50 for the first time in almost a year. A concern is definitely the EMA30 which has provided resistance for the pair in the past and also the resistance at 106.35 (former weekly support). A close above 106.50 would clear the way for the EMA50 currently around 108.

The exponential moving averages are still aligned in a downtrend though the EMA10 has flipped up and if the retracement continues will soon cross the EMA20.

USD/CHF: Pair remains locked in a clear downtrend, is getting pushed down by the EMA20 resistance (solid resistance since 7/07) and its RSI has just bounced off of 50 to the downside after posting a bearish hidden divergence a few weeks back. Selling near the EMA20 looks like the best strategy though last week’s candlestick was a bearish engulfing so we may or may not get another opportunity on the weekly chart for awhile.

Major concern is that the pair is in the 2nd retracement leg of a 5-3 Elliot Wave model retracement (since the possible 5 wave drop beginning 7/07), meaning a third retracement to the 1.0750 area could occur before more losses.

GBP/USD: The GU pair continues in its bearish channel since the trend reversal on 11/07. Two weeks ago we had a bearish doji that was NOT confirmed by a bearish close under the previous candlestick. Instead we saw a wave of buying at the end of the week courtesy of the ECB comments about the Euro rate increase. Until we see a close above 2.02, though, the pair remains bearish. From the weekly chart below we can see the best strategy for the week will probably be to sell of channel tops.

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Source: Weekly Charts – EUR/USD poised for more gains
Forex signals from: PipHut.com