Tagged "candlesticks"

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: Good morning or good evening PipHutters – wherever you might live on this globe! It is a funny thing all this great technology that allows a group of people from all across the world (even the South Pole) to meet together and work together every day. As always, PipHut is about you all, the community, so thanks for making PipHut what it is :). Ok, enough of that. Yesterday was a relatively pointless day for the EUR/USD pair. It seemed like we were going to get some action around 1.3680, about 10 hours ago and the pair has more or less just drifted ever since. I took a two shorts on the pair on some bearish candlesticks for a net break even.

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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12-4-09

5:41a GMT – Yesterday’s signals produced a trade (which is still open) at 1.5050 (currently a little bit in the profit) though I have tightened the stop as 4h charts are leaning toward a bearish consolidation pattern. Another reason I have tightened the stop considerably is because on the daily chart a bearish shooting star was produced so today could be a bearish profit-taking day for the markets. The AUD/USD trade I mentioned in the comments produced good pips as well :).

As far as yesterday’s news went Bernanke again talked about protecting the dollar – but the markets have heard this many times from Bernanke and never have his actions matched his words. In fact his actions (historically low interest rates) have said the exact opposite: that he at the moment cares very little about the value of the USD. One interesting thing he did say at his Senate meetings was that he would consider using interest rates to “burst” asset bubbles before they got too big.

Daily Outlook: Even as I write this we are seeing a bit of a bounce in the EUR/USD, which is good for our trade, but the signals for today are a bit mixed. The bearish shooting star on the daily chart yesterday and the potential double-top at 1.5140 are signals for a potential return to channel bottom around 1.4880. I will keep my long open from yesterday with a tight stop, though a break of support at 1.5025 will open the short-term bearish challenge of 1.4970. If it reaches this level I will look for bullish candlesticks to buy on.

News Events: Be weary of the Non-Farm Payroll (NFP) data and the US unemployment data due to come out around 13:30 GMT. Markets are usually choppy around news events.

Trading Idea: On a break of 1.5025 look for a challenge of 1.4970 support, around which I will look for buying opportunities with targets at 1.5000, 1.5030 and 1.5065.

(click to enlarge)

Update Graph: Big drop today. Wanted to post this longer term chart to give you some perspective on the drop. Looks like a better buying opp as it approaches that lower trend support doesn’t it?

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7-24-09

2:45a GMT – It doesn’t get much more picture perfect then yesterday’s signal – the pair gave us long upward wick followed by a bearish engulfing candlestick – two major reversal signs. If that wasn’t enough we had a bearish divergence on both the RSI and Slow Stoch. All targets were hit within 4 hours. But that was yesterday. On to today! After the major rally in the USD we saw the pair bounce off of oversold on the RSI, just touching 30 before rallying back up. I will continue to be bearish on the pair and look for selling opps near resistance.

Trading Idea: Resistance at 1.4165 and 1.4200 is the closest. As the candlesticks have been good signals so far I will look for a candlestick confirmation signal, and also divergences in the RSI and Slow Stock on 60m. Targets back down to 1.4165, 1.4115, 1.4085 and 1.4055.

(click to enlarge)

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