Tagged "trend support"

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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12-10-09

5:14a GMT – Shooting stars on the 30m chart have really been providing solid sell signals for me the past few weeks – have you all noticed the same thing? In general if the star is near resistance and is higher than the 10 or so preceding candles (meaning that it qualifies as an ‘extinction’ candle) it has been a very reliable sell signal. Take a look at the 30m chart below with shooting stars circled in blue:

Of course nearly anything has been a good sell signal this week – the EURUSD has dropped almost 500 pips since December 3rd! That includes our signal from yesterday too – we had a near picture perfect pierce of our resistance at 1.4775 with the tip of a shooting star (10:30 GMT on the 30m charts) that was quickly followed by a nice drop. If you missed the first entry the markets were kind enough to provide a second opportunity to enter above 1.4770 a few hours later on a 13:00 GMT rally. I ended up covering at 1.4700 after my third target at 1.4670 was not reached for +75 pips profit.

On to today – you can view the forex calendar here but we have the GBP and CHF announcing rate decisions (12:00 and 8:30 GMT, respectively), trade balances for the USD and CAD (13:30 GMT) and initial jobless claims for USD (13:30 GMT). The news I’m watching closely is the US initial jobless claims. It was a jobs report last week that sent the USD on its major rally and I believe it will be this report that defines the direction of the pair for the coming days.

Daily Outlook: On the 4-hour chart below we can clearly see that after the strong rising trend support was broken the pair has entered into what appears to be a bearish continuation pattern -(aka a “death spiral”). Technical outlook is therefore extremely bearish in the short-term however we have the big news events mentioned above that could thin out markets and make for some aimless ranging in the morning hours.

Trading Idea: I will stay out of the EURUSD until the news has been announced at 13:30 GMT. Until then there might be some (very short-term) trades worth taking at the top of the 30m channel  (shown above) where the last shooting star just touched off of. Also a break below 1.4700 will most likely open way to another challenge of 1.4670 for a quick 30 pips. After news events I will look for a shorting opportunity off of 1.4750 with targets at 1.4715, 1.4675 and 1.4640.

(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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6-3-08

5:56a GMT – Bullish hammer is forming minutes before candlestick close on the 05:00a candlestick GMT. If bullish hammer (wick is twice as long as body) does close then it would indicate a reversal pattern. Since this is right on a support line (in green) I will enter long two lots.

Update – Nice 130-pip rise from the the bullish signal entry to the top of the channel. Image below.

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5-28-08

GMT – GBP/JPY is approaching trend support (over the past three days) currently around 205.35

Trading Idea: Look for bullish candlestick to confirm trade, then go long with targets at 205.8 and 206.1. If trend support is broken look for targets at 205.00 and 204.80.

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5-28-08

6:28a GMT – A bullish doji is forming on the USD/JPY pair near former resistance trend line (now support).

Trading Idea: If the candlestick closes as a doji on the 60M charts (30 minutes left) I will buy 2 lots, one with a 20 pip target, the other with a 40 pip target and move to break even on the first limit.

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