Tagged "Free Forex Signals"

11-17-09

5:14a GMT – For those of you (myself included) who had sell entries yesterday at 1.5015 we just barely missed that level (or at least my broker did) by a razor-thin 0.5 pip. That was followed by an almost immediate 60 pip drop. This was of course after Bernanke’s speech, as many of you commented on yesterday, sent the EUR/USD into a frenzy. For those of you that are curious the comments that supposedly triggered this panic were fairly mundane:

“Today, financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible.”

He is not really telling us anything we didn’t already know – the only surprise here is how the market reacted. Which makes me think this could just be a stop-squeeze in illiquid markets during news.

Daily Outlook: Nothing in the technical picture actually changed since yesterday, as you can see in the graph below so it is business as usual. Because price action did advance quite a bit I am moving up my entry a little (closer to the 1.5050 resistance) to get a better risk/reward ratio.

Trading Idea: Still looking to short above the 1.5015-1.5050 resistance area, though now I will look for an entry higher up, closer to 1.5050 to get a good risk/reward ratio. Targets from 1.5050 are 1.5015, 1.4980, 1.4950 and 1.4915.

(click to enlarge)

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11-16-09

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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23:42p GMT – Placed breakout flagpole entry above current NZD/USD consolidation and trend channel resistance. RSI shows positive trend but Slow SS shows mixed signals on the 60M charts.

Buy – 0.7655
Stop – 0.7630 (25 pips)
L1 – 0.7680 (25 pips, raise second stop to break even)
L2 – 0.7705 (50 pips)

UPDATE – 7:05a GMT – Pair is still consolidating horizontally to resistance at 0.7650. The pair has not made any deep stabs to challenge Fibonacci 38.2% retracement so I am keep the signal and entry orders in place for now.

UPDATE – 7:45a GMT – Resistance was broken and entry points were hit to trigger the trade so PipHut.com is now active in this trade.

UPDATE – 8:21a GMT – First limit hit for 25 pip profit (equal to risk)! Second stop raised to break-even for a risk free shot at 50 pips.

UPDATE – 8:32a GMT – Second limit moved down 10 pips to 0.7695 due to expected resistance at .7700

UPDATE – 18:48p GMT – Second limit hit for additional 40 pips. Trade closed.

Signal Result: +65 pips profit!

Breakout/flagpole entry order placed below current NU consolidation after flagpole. Entry placed 5 pips below large round # .7550. Small flagpole, only 60 pips. Possible negatives include an RSI divergence on the 60M and strong support at 0.7500 scaring off the downward push.

Entries placed at 4:26 GMT.

Sell – 0.75450

Stop -0.75700

L1 – 0.75200

L2 – 0.75050 (5 pips above next support level)

UPDATE: 7:41 GMT, pair has broken to the upside and I am cancelling my entry orders. Good no trade.

Buy – 1.05675

Stop – 1.05425 (raise to break even on L1)

L1 – 1.05925

L2 – 1.06100

UC – Breakout entry placed above 1.065 resistance. Positives include wicks that have been horizontal in their display of resistance, RSI shows a definite uptrend. Price action is an up channel / uptrend. Low volatility allows for a tight 25 pip stop which is still below large round # of 1.050. Resistance was tested about 12 hours ago and held strongly, but bears were not able to lower the price much.

Negatives include an RSI that is near 70 and would surely break 70 if the pair rises. Also that the pair has shown that the bears were able to fight it down to the bottom of the flagpole previously.

UPDATE: 7:56a GMT 5-15-08. Trade has been close for a 25 pip profit. First target was reached. Stop on second lot was raised to break even and then tripped on.