Tagged "candlestick"

Recap: Welcome to a new week PipHutters! I hope everyone had as pip-filled a time as I did last week. As promised I did not trade on Friday but I don’t think it would have mattered anyway as the pair did not do a whole lot. A new recent high was formed at 1.2672 but the pair was quickly sold back down to the 1.2470 area and has since risen to 1.2520 where it is now.

Quick note on the website: I did some server upgrades this weekend so if anything is acting differently please let me know by submitting a help ticket. Also I’ve added various time periods to my charts so you can clearly see what timezone my charts are in (I get a lot of questions on that).

Daily Outlook: The rising trend (bottom blue line on chart) is still being respected – a bullish sign – as we just had double bullish candlesticks on the 1h charts: an inverted hammer at the 0:00 GMT hour and a hammer at the 1:00 GMT hour. See the candlestick alerts here for more details.

Technically the pair appears to be forming a lumpy head and shoulders reversal pattern in this short-term uptrend. The neckline of this formation is 1.2450 and a sustained break below this opens up 1.2400 and 1.2350 in the short-term. Meanwhile on the top-side a sustained break of 1.2630 could open up 1.2680 and 1.2750.

Fundamentally we have very, very little news tomorrow save for the USD existing home sales report at 15:00 GMT. See full forex calendar here for the details. But, with all the talk of Greece and the Eurozone we could see another country drive up the USD and continue the EUR/USD downtrend: North Korea. That’s right, South Korea completed its investigation last week of their sunken naval vessel and concluded it was a North Korean torpedo that sunk it. They even went so far as to release a quote saying that North Korea was going to “pay the price”. As the war of words heats up we could see a flight to safety in the USD.

Trading Idea: My primary trade is to sell a sustained break below the 1.2440 (the neckline) with targets at 1.2410, 1.2385, 1.2355 and 1.2315 for 125 pips profit. A much more aggressive trade would be a long on a sustained break above 1.2620 (on the 4h) or 1.2630 (on the 1h) targeting up to 1.2750 for 130 pips. I would much prefer the short opportunity here as the long-term trend is still very bearish, and looking for opportunities to short in general is a decent strategy here.

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Yesterday Recap: Pretty good day of trading yesterday as 3 trades were triggered as I capitalized on the tightening consolidation pattern of the pair. First was the aggressive sell triggered by the bearish break of 1.3580, which dropped for a quick 30 pips to rising support. That activated the primary long at 1.3550 which rose for 100 pips.

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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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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12-29-09

5:29a GMT – The markets struggled to move at all yesterday, with virtually nothing happening throughout the entire trading day! I could sum up the entire day with: “the markets rose a little bit, then fell a little”. No new highs, no new lows. The only technical detail worth mentioning was that on the daily chart yesterday formed a (very small) bearish doji. Because it is so small however, on thin markets and not a new high it is a very unreliable bearish signal at best.

Daily Outlook: After failing to make a new high by breaking 1.4420 and the somewhat bearish daily doji discussed above I am back to leaning bearish, however the technical signals are weak at best and the market is without a clear direction at the moment. It would seem bulls and bears are content with the price at the moment as we go into 2010.

Trading Idea: Look for the pair to continue to consolidate in the 1.4420-1.4350 range, with a break of 1.4420 opening the way to 1.4500 and a break of 1.4350 opening up 1.4320 and 1.4275. Remember, markets are razor thin this time of year and tend to either do nothing or make big jumps, so trade carefully, always use stops and good money management!

(click to enlarge)

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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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12-15-09

EMAIL ALERT – I know that no email alert was sent out for today’s signal! I’m upgrading the PipHut mail server to handle the increased load. Should be up and running for tomorrow’s signal and hopefully you will get signals quicker too :).

6:14a GMT – Well we had a whole lot of nothing yesterday with the EUR/USD yesterday. Early in the day we did have a move upwards which stalled out around 1.4675 (the 50% fibo of the Dec 11th high/low) and dropped 50 or so pips but that was really the only action of the day. After that the EUR/USD just stumbled about around 1.4650 without any real direction.

Daily Outlook: Despite the lack of direction yesterday afternoon I am still very bearish on the pair as it continues to make lower lows and lower lows. My real concern at this point is that in these thinner markets (markets thin out toward the end of the year/holiday season) we can see a big spike in volatility, and a big spike in volatility is usually preceded by a tight range day. Just like we had yesterday. So keep that in the back of your mind when deciding whether or not you want to enter that trade :). We do have some sentiment news coming out of Germany around 10a GMT and some inflation news coming out of the States around 13:30 GMT. You can read more about the day’s news events/details at the forex calendar here.

Trading Idea: Looking for selling opportunities, but will look higher up as volatility is a serious concern in these holiday-thin markets. I am looking for short candlestick signals in fairly big band of resistance, currently 1.4700-1.4730. I will look on the 30m, 1h and 4h charts for a good entry signal. Short targets from 1.4730 are 1.4700, 1.4675, 1.4640 and 1.4605.

(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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12-8-09

4:44a GMT – Before we get to today’s forex signal, have you heard that expression before, “circle the wagons”? As far as I know it is an early American expression from a few hundred years ago when the early US settlers were moving west across the Great Plains of the country. They didn’t get along so well with the Native Americans and when they would attack the settlers would circle their wagons in a defensive position to help fight off the attack. We saw a similiar defensive move yesterday as bears attempted and succeeded in consolidating their gains below former trend support which signals a short trade on the day.

Though the  EUR/USD is giving us some short directional signals, fundamentally I believe this USD rally will be relatively short-lived as long as Bernanke signals no action on raising USD interest rates. He again talked about USD strength yesterday but so far that is all he has done – talk. His actions have supported a weak dollar and as long as risk appetite is in the market that signals further dollar weakness against the higher-yielding Euro.

Daily Outlook: That being said, I’m primarily a technical trader and the short-term trend is down. We had a huge 200+ pip drop on Friday, the break of rising trend support that has held for the bulk of the year and bears were able to hold and consolidate some of those gains yesterday. With that in mind I will be looking for a signal to sell near resistance around 1.4900.

Trading Idea: Shorts preferred in resistance zone of 1.4900 with candlestick confirmation. Tight stops, targets at 1.4865, 1.4830 and 1.4780.

(click to enlarge)

Forum Signals: Did you know PipHut has new user forums? Below are some interesting items brewing over there – feel free to jump in, participate and learn! Post your own charts, get feedback on trades, learn new systems, you name it! Stuff happening right now in the forum:

1) We had guzz4geez accurately predict the AUDUSD drop when he spotted a head and shoulders pattern on the AUDUSD charts – link
2) David continues to chronicle his mad scalping system for the EURUSD M1 charts – link
3) Remy found a textbook example of a fibonacci retracement – link

In short, for more signals, more interaction and more learning make sure you are checking out the forums!

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