Tagged "bulls"

Slow day yesterday – in the markets and in the forums. The pair only moved 15 pips from open to close, and it was one of the least volatile days in recent history moving less than 100 pips from high to low. Traders didn’t have much to talk about either with not trades being entered!

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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3-4-10

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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12-28-09

6:14a GMT – I hope everyone had a relaxing few days off last week! This is generally the slowest week of the year before the New Year, and I know many of you are still out for the week on vacation, but the markets are open so the signals will continue! We finally saw a breath of life out of the bulls last week as the EURUSD managed to close on a high note, climbing above 1.4400 and almost piercing the 23.6% fibonacci retracement resistance from 12/3-12/22 at 1.4330. Price also managed to break the downtrend resistance we’ve had since December 3rd.

Daily Outlook: So what does this all mean? Well, if we were in a long-term downtrend for all of 2009 I would let this go and continue selling, but given the thin markets and the fact that we have actually been in a strong uptrend all of 2009 these are enough bullish signals to make me a believer – I looking to buy on dips today.

Trading Idea: I’m looking first for bullish signals near support at 1.4320 and, if that gets broken, I’ll look above 1.4275. From 1.4275 targets are 1.4315, 1.4345, 1.4390 and 1.4420. Make sure to keep an eye out for candlestick signals here to confirm the trade.

(click to enlarge)

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12-18-09

5:14a GMT – Before today’s signal I want to say something quick about patience. As you all probably know I talk about NOT trading about as much as I talk about trading. About waiting for a good pullback to buy/sell on, about waiting for confirmation, and about not minding if I miss a trade because there will always be another one. It’s one of the hardest things to learn in becoming a trader but I think the most important. I’m going to write a full article on it this weekend but until then please 30 seconds and read this post by James in the forum on Patience and Trading here. Feel free to share your own thoughts and stories (reply to the forum please) so we can all grow as a community.

On to the signal! Markets will probably be thin today due to it being Friday and so close to the holidays. We’ve definitely seen the end-of-year increase in volatility that many of us were expecting, and Friday’s can make it even worse. As always use stops and good money management. No entry on yesterday’s sell signal as the price dropped like a rock and never looked back. Mind the news event at 9a GMT – details on the forex calendar.

Daily Outlook: Short-term trend is obviously still bearish, and we have a short-term resistance in place at 1.4420 that should provide a good guide as to the direction of the pair on the day. 1.4420 is the 38.2% retracement of Wednesday’s high and Thursday’s low and has been twice tested (7:00 and 14:00 yesterday).

Trading Idea: Below 1.4425 I am bearish. For the day I will look for a bearish confirmation signal (candlestick, failure, etc.) to enter on with short targets at 1.4390, 1.4355 1.4320 and 1.4290. If 1.4425 is broken to the upside look for a re-challenge of 1.4500.

(click to enlarge)

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12-9-09

6:42a GMT – When I wrote in yesterday’s signal that the bears had circled wagons and looked to be in firm control I still thought the bulls would be able to muster a little bit of a fight. Turns out the bulls played the role of punching bag yesterday as bears continued the downward pressure, smashing through 1.4775 support. Price action never got to yesterday’s signal entry, but there were candlesticks worth entering on all major timeframe charts that captured some nice pips. On a side note – this is why I only trade with me trend direction on the day. Anyone jumping at bullish signals more than likely got punished for doing so. If you go with the trend you can get punished, but usually the punishments are not as harsh.

Daily Outlook: With bulls showing little strength and strong daily support broken signals point toward more EURUSD losses and I will look for shorting opportunities. My preferred shorting zone would be 1.4775 (resistance and a 23.6% fibonacci retracement) as that would offer the best reward/risk ratio, but I will also look for shorter-frame shorts on candlestick signals with very tight stops as bears appear to have a firm grip on the markets at the moment.

Trading Idea: Under 1.4775 shorts are preferred with targets 1.4745, 1.4710 and 1.4670. On a clean break of 1.4775 look for a possible re-challenge of 1.4900.

(click to enlarge)

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