Sir Pipsalot
Former FPA Special Consultant
- Messages
- 511
Hey folks,
The EUR/USD did indeed break the 1.4420 resistance and continued a bit higher during the Euro session, only to turn around into a deeper selloff during NY. My best interpretation of the price action is that last night completed a wave A up of an A-B-C retracement ov the December downtrend. We are now in wave B down that could bounce soon (around 1.4309) but could dip lower even exceeding last week's 1.4217 low by a bit. After wave B ends, a wave C higher should take us above today's 1.4458 highs and at least to 1.4568 (38% retrace of downmove).
Keep in mind though that wave counts can be in error and we could always have some sort of alternate wave count develop that doesn't seem terribly obvious right now, but the contrast between clear impulsive and corrective characteristics within the structure make this interpretation an overwhelming favorite in my view.
I've attached a couple of charts to display what I'm talking about. I apologize for the crude MS Paint work, but I'm a trader, not a Graphics Deisgner =P
3 hour chart with likely medium term trend for the next 1-3 weeks:
15 minute chart showing examples of bullish and bearish trend reversals:
My plan is to buy on the next bullish trend reversal on the 15 minute chart (it has been working best the last week or two). I personally define a 15 minute bullish reversal as when price is holding above the 10 and 20 EMA's and those EMA's are sloping up and above the 60 SMA. There are more intricate ways of identifying trend reversal, but this is simple and will work for me in this case. Once we reverse higher on the 15m, I plan to buy EUR/USD and put an SL below the recent swing lows looking for sensible profits, but holding out on a bit of the position for around 1.4568.
In stocks, it seems like S&P 500 futures have lost some of their momentum and it's quite likely we'll either range trade or ease lower into the new year. I would look to either sell after a 3-7 point pullback up or cautiously chase it short with a comfortable SL.
In news Tuesday, we saw US Consumer Confidence figures come out very close to expectations, so there was nothing to really work with there. There are no more key news trades this week unfortuantely, so trading volume is likely to be low. Keep your ear to the ground and your eyes on the technicals for indications of big stale orders at certain key levels as the reduced volume will likely have more trouble breaking confirmed support or resistance backed by decent sized orders. As I type this right now for example at 2230 EST, it seems pretty obvious there are bigger orders at the major EUR/USD bounce retracement fibs at 1.4365, 1.4337, 1.4309, and likely 1.4273.
I hope everyone had a wonderful Christmas and enjoys a happy New Year!
That's all for today's update. If you'd like to learn more about trading or trade along with myself and my collegues, come join us at Profit Mongers. Our subscription is very reasonable at $179 per month, and right now you can sign up for a 2 week trial to get started for only $29. This offer is for new customers only.
To our success!
Sir Pipsalot
The EUR/USD did indeed break the 1.4420 resistance and continued a bit higher during the Euro session, only to turn around into a deeper selloff during NY. My best interpretation of the price action is that last night completed a wave A up of an A-B-C retracement ov the December downtrend. We are now in wave B down that could bounce soon (around 1.4309) but could dip lower even exceeding last week's 1.4217 low by a bit. After wave B ends, a wave C higher should take us above today's 1.4458 highs and at least to 1.4568 (38% retrace of downmove).
Keep in mind though that wave counts can be in error and we could always have some sort of alternate wave count develop that doesn't seem terribly obvious right now, but the contrast between clear impulsive and corrective characteristics within the structure make this interpretation an overwhelming favorite in my view.
I've attached a couple of charts to display what I'm talking about. I apologize for the crude MS Paint work, but I'm a trader, not a Graphics Deisgner =P
3 hour chart with likely medium term trend for the next 1-3 weeks:
15 minute chart showing examples of bullish and bearish trend reversals:
My plan is to buy on the next bullish trend reversal on the 15 minute chart (it has been working best the last week or two). I personally define a 15 minute bullish reversal as when price is holding above the 10 and 20 EMA's and those EMA's are sloping up and above the 60 SMA. There are more intricate ways of identifying trend reversal, but this is simple and will work for me in this case. Once we reverse higher on the 15m, I plan to buy EUR/USD and put an SL below the recent swing lows looking for sensible profits, but holding out on a bit of the position for around 1.4568.
In stocks, it seems like S&P 500 futures have lost some of their momentum and it's quite likely we'll either range trade or ease lower into the new year. I would look to either sell after a 3-7 point pullback up or cautiously chase it short with a comfortable SL.
In news Tuesday, we saw US Consumer Confidence figures come out very close to expectations, so there was nothing to really work with there. There are no more key news trades this week unfortuantely, so trading volume is likely to be low. Keep your ear to the ground and your eyes on the technicals for indications of big stale orders at certain key levels as the reduced volume will likely have more trouble breaking confirmed support or resistance backed by decent sized orders. As I type this right now for example at 2230 EST, it seems pretty obvious there are bigger orders at the major EUR/USD bounce retracement fibs at 1.4365, 1.4337, 1.4309, and likely 1.4273.
I hope everyone had a wonderful Christmas and enjoys a happy New Year!
That's all for today's update. If you'd like to learn more about trading or trade along with myself and my collegues, come join us at Profit Mongers. Our subscription is very reasonable at $179 per month, and right now you can sign up for a 2 week trial to get started for only $29. This offer is for new customers only.
To our success!
Sir Pipsalot
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