Tagged "RSI divergence"

7-28-09

4:06a GMT – I don’t normally do USD/CAD signals on PipHut but the USD/CAD is at major daily/weekly support and I thought I would share with everyone. On 4hour we are well oversold with a bullish divergence on the RSI and the slow stoch has just started to the upside. Unfortunately this has been the condition with the USD/CAD for days now and the downtrend has continued. Different this time though, is the daily chart. On the daily chart we can see we are on support that got a 1000 pip bounce last time it hit there. RSI and slow stoch are both oversold on the daily.The weekly confirms this, BUT the RSI on the weekly has not hit 30 (though does have a slightly bullish divergence from the support last time) and the slow stoch has not crossed over (though the stoch line is at 4! highly oversold).

Trading Idea: Long USD/CAD with target at below 23.6% of fib retracement, curently around 1.0640.

(click to enlarge)

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9-12-08

3:26a GMT – AUD/USD has a nice bullish RSI divergence and the AUD received news today that indicated they might not have to lower interest rates as soon as previously thought. This points toward a possible further bounce in the pair and I see that extending as far as resistance between .8165-.8195.

Trading Idea: Below .8195 shorts are favored back to the targets .8095, .8005 and eventually .7915. If .8200 is broken look for a challenge of .8315.

(click to enlarge)

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9-4-08

3:19a GMT – EUR/USD is very bearish on all but the weekly and monthly charts (where solid support has yet to be broken) and I am looking to sell rallies. In the short term, however, caution is advised as a bullish reversal hammer formed yesterday on the daily charts right on strong daily support (right above 1.4475). On top of that a bullish RSI divergence has appeared on the daily charts.

Trading Idea: look for a bit of a rally in the EUR/USD before selling bearish reversal signals on strong rallies. At a minimum target back down to support at 1.4475. If you are cautious I would advise sitting this one out until clearer direction is given in the market.

(click to enlarge)

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8-6-08

20:12 GMT – A bullish RSI divergence has appeared on the EUR/USD 60M and 4H charts (more evident on 60M chart below. A bullish divergence is when the price action makes lower lows while the RSI makes higher lows. Overall I think the EU is in a downtrend but this might provide a bump to ease oversold levels.

Trading Idea: If you were to trade this divergence look for long targets above the 1.5400 support at 1.5425, 1.5445 and 1.5475.

(click to enlarge)

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8-3-08

17:18 GMT – The GU pair is giving off mixed signals on Sunday afternoon. Overall I expect the downside to hold out on both the 4H and the Daily charts but I will look to sell rallies. Their is a bullish RSI divergence on the 4H charts that indicates a possible rise in the pair to resistance at 1.9800, 1.9840 or even (if the news is strong enough) to the top of the channel resistance (yellow lines below) currently around 1.9875.

Trading Idea: short favored on rallies with targets ultimately down to 1.9675.

(click to enlarge)

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7-23-08

13:28 GMT – A regular bullish divergence has appeared on the 60M and 4H charts for the EUR/USD pair. Price action has been making lower lows while the RSI has been making higher lows (yellow lines on chart below), signaling a possible reversal back to the upside for the pair. Pair is also deep in oversold territory.

Trading Idea: While divergence is present longs are favored back toward 1.5760.

(click to enlarge)

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7-10-08

4:07a GMT – EUR/USD continues to give off mixed signals as traders look for a direction in the market. Support at 1.5755 was able to fight back the rise of the Euro on a horrible day for the US stock market, most likely on better than expected results with Oil prices. To add to the confusion a hidden bullish divergence (where the price makes higher lows and an oscillator – in this case the RSI – makes lower lows) has appeared on the four hour charts which could mean more Euro gains. I still like short positions on this pair as long as the pair does not close well above resistance between 1.5755 and 1.5765.

Mixed signals are beginning to break down on the daily charts as well, though monthly and weekly still show a bullish bias.

Trading Idea: Short targets below 1.5765 at 1.5715, 1.5675 and 1.5635.

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6-28-08

6:28a GMT – Shorts remain my favorites for the USD/CAD pair as it traces down from its 1.03 monthly high to its range bottom. Concerns are a possible bullish divergence in the 4 hour RSI charts.

Trading Idea: In the short to mid-term shorts at 1.0125 should hold for a test of 1.0080 and 1.0025. If resistance is broken at 1.0135 look for test of 1.0190 on the upside.

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6-4-08

18:12 GMT – AUD/USD has been caught in a bearish channel beginning on 5/18 and I expect trend resistance currently at 1.9630 to hold and repel any stabs upward. RSI also crashed off its bearish channel resistance (near 70) and pair appears to be reversing down. I expect the the pair to encounter firm support around .9550 and would cover any bounce off of this until the charts give us a directional bias at that level.

Trading Idea: Wait for bearish candlestick to confirm trend reversal and enter short around .9620 with targets at .9675 and .9660.

UPDATE – 21:36 GMT – both targets hit for 65 pips. Will enter short again if pair breaks .9550.

Result: +65 pips

Analysis: Good trade. At the same time a single long wick touched resistance the pair also hit 70 AND RSI resistance and then began a bearish RSI divergence.

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6-4-08

17:38 GMT – After breaking through the 1.58-1.56 support the pair has consolidated sideways over the past two days, finding tough resistance at 1.5480. As long as the pair is below 1.5520 I remain bearish in the short term. I expect the pair to continue consolidating in the near future and then drop for a test of 1.5300, perhaps in the Asian Session. Concerns are a bullish RSI divergence and if the US stock markets keep their gains for the day, though another thrust downward would negate the RSI divergence. The hourlies are not as oversold as they once were, currently around 43-44.

Trading Idea: Short at 1.5485 with targets at 1.5435, 1.5400 and 1.5350. Above 1.5520 look for a challenge of channel resistance, currently at 1.5570.

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