Yesterday Recap

Daily Outlook: Here we are finally at 1.3700 (after 3 days of waiting) and, unfortunately the price has drifted so far that the technical picture is not as short term bearish as it once was. The price broke through the hourly falling trend resistance yesterday (a bullish sign) but left the daily trend resistance intact (a bearish sign) which is the top blue trend line on the graph below. We have also had two consecutive days of higher highs and higher lows. Toss the bullish candlesticks we’ve had the past few weeks on the weekly charts and their is ample reason to be looking for longs. Which leads me to my strategy to close out the week: given the mixed signals as to the trend I will continue to look for short confirmation candles at 1.3700 and (more importantly) at the daily resistance of 1.3740. But I will also be on the lookout for long opportunities in a return to 1.3625 support.

Trading Idea: It is Friday and we do have USD news (check the forex calendar for more details) coming out at 13:30 GMT so conservative trades are my preferred route today. Primary trade is a short in the area of falling trend resistance around 1.3740, with targets at 1.3710, 1.3680 and 1.3645 OR a long in the vicinity of 1.3625 support with candlestick confirmation. Bull targets from there are 1.3650, 1.3680 and 1.3710. A more aggressive trade (not my cup of tea on Fridays) would be a short at 1.3700 with targets down to 1.3600.

Happy trading today PipHutters and thanks for being such a great community to work with!

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Source: Forex Signals – EUR/USD Week of Mixed Signals
Forex signals from: PipHut.com

Yesterday Recap:

Daily Outlook: Despite the large up and down swing the daily outlook didn’t change a bit – the pair continues to consolidate in a tight triangle pattern with the overall downtrend still intact. I will look for a false breakout to occur to the topside, possibly even challenge the stronger falling trend resistance on the daily charts (you can just see the top of it – its the top blue line) currently around 1.3700.

Trading Idea: Not as aggressive today as we are running out of room to maneuver in this pattern. Primary trade is a short on a signal under 1.3700 resistance, with targets at 1.3670, 1.3640, 1.3605 and eventually 1.3560. Secondary trade is a bearish break of 1.3620 support could trigger a run to the trend support again (currently at 1.3570).

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Source: Forex Signals – EUR/USD Breakout Trade
Forex signals from: PipHut.com

Yesterday Recap:

Daily Outlook: Luckily there are some interesting times ahead for our favorite pair and a lot of different trading scenarios today! As you can see on the 4-hour chart (now to the upper right and with a pretty watermark when you click on it) the pair is forming a triangle consolidation pattern. This consolidation is a perfect example of how technicals mirror the fundamental world:  the market is trying to figure out how to deal with the Greek (and Portugal, and Spain, and….) issue. If Greece defaults because it can’t fund its debt, to what extent will the EU step in? And then if Portugal defaults, will the monetary fractures in Europe be too deep to fix? I can’t blame the Germans for not wanting to finance Greece’s bad planning.

Trading Idea: I’ve got quite a few options laid out on the day. First I can look to range trade between the bands (i.e. sell falling trend resistance currently at 1.3685  and buy at the rising support currently at 1.3550). Second option is to wait for the market to provide a hint and sell/buy a breakout (sell if 1.3650 is broken and buy if 1.3700 is broken). Third option, and the most aggressive by far, is to take advantage of the mini consolidation pattern forming on the 30m and 1hr charts currently (see second chart down on right hand side). As you can see we’ve had a nice tight range pattern within the overall triangle between 1.3585- 1.3615.  The aggressive trade would be to buy an upside break of this pattern’s resistance (1.3620) and to sell a break of the support (1.3580). Warning on the aggressive trade: it is riskier and I wouldn’t try if if you don’t know what you are doing! Also given the positioning the upside is slightly favored and has more room to move for an upside break.

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Source: Forex Signals – EUR/USD Breakout Showdown Looming
Forex signals from: PipHut.com

Daily Outlook: The pair continues to consolidate in the1.3750-1.3450 range, coming closer and closer to our key falling trend resistance dating back to early December 2009. The last time this resistance was tested (January 13th) the pair flirted with the resistance a few times before ultimately plummeting over 900 pips. Also reinforcing the bearish picture is that bulls were unable to sustain their new rally, failing to make a new high on the day or even sustain their gains (in fact the day ended as a bearish candle with a long bearish wick).

Trading Idea: I will look to sell a challenge of this trend resistance line, currently between 1.3700-1.3730. From 1.3730 the short targets are 1.3700, 1.3665, 1.3625 and 1.3595.

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Source: Forex Signals – EUR/USD Slowly Approaching Key Resistance
Forex signals from: PipHut.com

Spurring the risk-taking was a speech by the French President offering support for France and saying, resolutely but still lacking any detail, that Europe was ready to support Greece with billions in aid. This sort of “blank check” support could drive risk taking (and the Euro) in the short term but any sign of dissension out of Germany should send the pair back to the depths.

Daily Outlook: short term outlook is bullish, longer-term outlook is bearish. A glance at the daily chart will show that the pair has been in a free fall since early December – a drop of almost 2000 pips since the Dec 3 high of 1.5400. We at PipHut have been selling all the way down and booking great pips as a result, but with the short-term picture a little murkier I will be going with the more conservative trades while still looking to fade rallies. The most obvious point of resistance is the falling trend resistance on the daily charts (connect Dec 3, 2009 high and Jan 14 high) that has not been broken in 2010.

Trading Idea: I will be looking in the resistance zone just below that falling trend line, between 1.3730-1.3750. Short targets from 1.3750 are 1.3715, 1.3680, 1.3650 and 1.3625. A much more aggressive move would be to look for a long in the 1.3585-1.3565 support zone to capitalize on short term bull trend, with longs targeting up to a re-challenge 1.3700.

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Source: Forex Signals – EUR/USD Caution Ahead
Forex signals from: PipHut.com

3:38a GMT – I was doing a lot of work on the upcoming PipHut features today so I didn’t chat in the forums much (sorry if I missed anything) but the bears were out in full force yesterday. The daily falling resistance was never reached but I did enter into a short on a triple candlestick confirmation that was hard to ignore. On the 30m chart, or anyone checking the Candlestick Alerts (have you bookmarked that yet??), we had a bearish doji, a bearish shooting star followed by ANOTHER shooting star just below 1.3700 resistance. Here’s an image of what the candlestick alerts showed you:

The times listed are the OPEN times of the candle in GMT. I covered on the bullish hammer (which the CAS also showed) a few hours later for about 70 pips per lot, though the pair continued to drop for about 50+ pips after that.

Daily Outlook: Currently the pair has bounced off of the 61.8% fibonacci retracement of 1.3550 (retracement of March 2nd low to March 3rd high) and is drifting upward in search of bears. It is Friday and markets have been volatile this week so no shame in taking the day off, but I will look for some very specific setups to trade. If the conditions are not met I will stay out of the markets.

Note on Calendar: Non-Farms Payroll data and unemployment data comes out today. I’m primarily a technical trader so I believe that data is baked into the charts BUT I still avoid the markets during the release of big news and realize that any major deviance from expectations can cause a shift in the technical picture. Unemployment is expected to be 9.8% (up from 9.7%) and NFP is expected to come in at -25k (from -20k last period). Any major change from these numbers and I will let the charts settle before jumping back in.

Trading Idea: First setup I’m looking for is for the pair to drift, small candle by small candle up, to 1.3630 resistance and give me a long wick extinction candle that just touches resistance. From 1.3630 short targets will be 1.3600, 1.3575 and 1.3550. Second trade is if  1.3600 holds and the pair makes a sharp break of 1.3540, I will look for targets of 1.3510, 1.3480 and 1.3450. For aggressive traders the pair just displayed a bearish shooting star an hour ago on the 1h charts.

Happy pipping and have a great weekend!

(click to enlarge)

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Source: Forex Signals – EUR/USD Triple Confirmation Trade
Forex signals from: PipHut.com

4:17a GMT – Euro bulls were able to extend the rally past 1.3700 resistance yesterday. I had a small position much lower down on a bearish doji that was stopped on a very tight stop and did not enter at 1.3700 as their was no candlestick signal to confirm the trade. The Greek worries were set aside for a bit yesterday as risk sentiment improved and the US dollar sank accordingly. Greece is just the tip of the iceberg however, with problems in Portugal, Italy and Spain (PIGS for short) on the horizon. EU is in a bind because aiding Greece is in their best interests in the short-term but long-term how will they respond if one of the other PIGS countries needs help?

Daily Outlook: I’ve posted a possible weekly scenario below for everyone to look at, and circled the double dojis that give me pause and make me concerned this bullish sentiment could continue for a few more days. The pair is still capped by a falling trend resistance on the daily chart however.

Trading Idea: I will play it cautious today as the short-term trend exposes itself. No need to risk my capital on a 50/50 toss. The primary trade I will look for is a short near falling trend resistance (falling blue line below on 1h chart) which is around 1.3800. 1.3800 is also resistance from mid-February. From 1.3800 at 1.3765, 1.3730 and 1.3700. If you are feeling aggressive a long in the 1.3600 area offers a good shot at jumping back up, but I will not be taking that trade.

(click to enlarge)

Weekly Chart with Bullish Dojis:

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Source: Forex Signals – EUR/USD Bulls Extend the Rally
Forex signals from: PipHut.com

5:14a GMT -Yesterday’s primary trade, a sell off of 1.3580 held on the initial touch to put pips in our pockets but bulls eventually bullied (you like that? :) there way back up to 1.3650. In all it was a very volatile day with 6-8 candles over 50 pips in length alone. This increase in volatility actually steers me toward a ranging forecast, however, as volatility usually tightens before a major *pop*, like the quiet before a storm.

Daily Outlook: 1.3450 support has been tested three times on three separate days and has held firm each time. Firm might actually be an understatement – every time the support has been touched the pair has raced upward 200 pips! More concerning for the bears though is the two massive dojis on the weekly chart with the now forming bullish hammer. Each time that support holds it makes a retracement more likely as bears may decide to wait for a better entry price higher up as I am now doing. Last hour we had a shooting star on the 1h near 1.3650 resistance but I no longer feel great about getting a good risk/reward from this level so I will hold off, waiting for a shorting opportunity closer to 1.3700.

Trading Idea: Still looking to short as the primary trade, with candlestick confirmation int he 1.3700 area. Targets at 1.3675, 1.3650, 1.3615 and 1.3580. The battle at 1.3580 will be interesting though, and aggressive bull traders will be looking for longs in this 1.3580-1.3550 on a retracement.

(click to enlarge)

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Source: Forex Signals – EUR/USD Volatile Markets
Forex signals from: PipHut.com

4:04a GMT – Shooting stars led the way yesterday with a great one occurring right before our big drop on the 10:00 gmt candle (1h, did you see it on the candlestick alert system?) It occurred a bit low but the trade was valid for a few reasons: 1) it was higher than the previous 14 candles, lending credibility to it, 2) the tip of it just touched our 1.3650 resistance which has been on the charts for days now, and 3) 1.3700 offered a great resistance level to hide a stop-loss behind. The best stop-losses are such that if it is reached then the technical picture of the pair changes. With 1.3700 if it was breached I would no longer be bearish on the pair. Luckily the large stop loss was more than made up for with the massive 200 pip drop and though I didn’t capture all of that I captured enough ;).

Daily Outlook: We are in a bit of a range right now, between 1.3700 and 1.3450 and a break of either level will give us some indication of the short-term direction of the pair. We are in longer-term downtrend, for certain, but the double-dojis on the weekly chart give me enough reason to respect the 1.3450 support for now. A good break of this level would invalidate those dojis, however, and open up a run at 1.3380 and 1.3300.

Trading Idea: First selling area is in short-term key resistance of 1.3580 which held yesterday’s eventual rally and is also the 61.8% resistance of the big drop. I will look for short signals in this area with targets at 1.3555, 1.3520 and 1.3480.

(click to enlarge)

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Source: Forex Signals – EUR/USD Shooting Stars Over Range
Forex signals from: PipHut.com

6:14a GMT – Happy March PipHutters! Time really does seem to fly these days. I was trying not to enter the markets last Friday – end of week, end of month, Greek crisis all added up to more risk than I generally tolerate. So I listed my (preferred) conservative trade as being in the 1.3650-1.3700 resistance zone WITH candlestick confirmation on top of it. I didn’t expect either condition to be hit but with 5 hours left to go in Friday trading we saw a 100 pip bullish move into the conservative territory, capped by a bearish shooting star at 16:30 that popped up on the candlestick alerts (30m). Long story short I took the short position knowing my losses would be limited with 1.3700 capping potential gains and gained a quick 50 pips on the signal going into the weekend.

Daily Outlook: Double-doji on the weekly chart is enough to give me pause. A break above 1.3700 would be a bullish sign for further correction up to 1.3850 and higher (1.42 territory). Fundamentally traders are weighing the bad news in Europe (the Greek problem – and Portugal, Spain and Italy looming) against bad news in the US (soft housing data, unemployment, etc) and trying to figure out how much risk they are willing to tolerate. In the short-term the Greek fallout has really shaken traders and I think that will trump US concerns (meaning USD strength). Technically I will remain bearish under 1.3700 and will look to take another short in that vicinity.

Trading Idea: Looking for short with candlestick confirmation in the 1.3700 vicinity. Short targets at 1.3675, 1.3650, 1.3615 and 1.3585. A sustain break above 1.3700 immediately puts 1.3750 and 1.3790 in my sights.

(click to enlarge)

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Source: Forex Signals – EUR/USD Strong Resistance
Forex signals from: PipHut.com