We have seen some decent reversals here for the Euro pairs but it is too early to call it a game changer. I was very cautious with my shorts at the start of the session because we see often the market bucking the trend on Wednesday .I took two careful sized short in EUR/USD at the beginning of the session when the price was still below the 30min 20 EMA but I wanted to be flat in front of the London open in case of a reversal. That ended pretty uneventful with -6 and +7 pips. We got the classic London open reversal. I was glad that my gut feeling was right and we pulled out of our shorts before that. Even with the spike the main trend was still down though and I don’t like to trade against the main trend. We got a nice re-test of the breakout area though right at the daily pivot and a long here was too tempting to resist since we could place the stop tightly behind the pivot. I went long at 1.2090 and got out for just 11pips in front of the 38.2 Fibonacci expansion level. The EUR/JPY meanwhile had basically the same setup and I thought that pair could break higher as well. I was very late with my long entry at 94.72 but it played out well. I got out for another 11 pips at the 61.8 FE level. Both pairs sit right now in front of resistance. EUR/USD was not able the break the 5 day VWAP significantly and EUR/JPY having trouble to breach the 100 hourly EMA. This could be good short levels here but the shorter timeframe EMAs are now support. We got +23 pips for the morning on just ¼ size so roughly +6 full points.
GBP/USD was another story this morning. Were weak UK data set a bearish tone in Cable and the pair broke the recent support level. I was looking for a retrace after the break and Cable did a picture perfect retrace to the 61.8% Fibonacci level where it also met the 2 hour EMA. I took a short at 1.5518 with very tight stop at 1.5525 above the 61.8% level. That trade went well and I got out for +32 pips on ¼ size=+8 full points. I did not want to trade larger since I did not want to risk much of what made in the morning. This was kind of a small size trap. Cable went to the lows again and it looks like it will eventually hit the 100% FE level today. In the 2 hour chart it could even go to 1.5400. The 100% FE in the 2 hour chart is at 1.5290. The trade was posted on my twitter account which members have access to. Twitter gives me the chance to place trades also outside of the session times. Overall a pretty decent day with +55 pips even it was just on small size.
We finally got breakout in volatility here with EUR/USD having a 200+ pip range. This time the move came to the upside though and we witnessed a classic short squeeze. The catalyst was a comment from ECB president Draghi that the ECB might start a new bond buying program. “Within our mandate ECB ready to do whatever it takes to preserve the euro” was the actual quote but bond buying it means. The European morning session had been very dull tough since the ECB president spoke after the session. I was taking a long in EUR/GBP on hopes of a break-out since GBP/USD was looking weak at that point and EUR/USD was holding above the MAs. I pulled out quickly when the pair did not get past the previous high for -6 pips on ¼ size. I took a EUR/USD long afterwards right before the London open. It was a bit of a gamble to take the trade before the open but it was again only on ¼ size. I was also watching the equities markets very closely and when I saw the DAX pushing below the daily pivot at the open I pulled out my risk-on trade very quickly as well. This time for -5 pips on 1/3 size. A good example of cutting your losses quickly if things don’t go as planned and using the correlation between the equity markets and the currency market to get a feel for the direction. In the end -3 full pips here for the morning.
After the session the madness started and we saw that nasty short squeeze. As usual I posted my trades on twitter for the US session. We never got a pullback to go with the trend so I had to go for counter trend trades. I was looking for a short at the 20 Day VWAP in EUR/USD at the 1.2180 level and got a 1.2178 entry. Again only with ¼ size since this was a countertrend trade and I used a very tight stop above the previous 1min high. I got lucky here since my stop was missed by a fraction of a pip on an attempt to break higher and closed the trade for +15 pips. I did not like the slow speed of the retrace so a move higher was likely. Last trade for the day was a short in GBP/USD ¼ size at much oversold conditions. The 15min RSI showed a value of 85 and the pair was also facing some resistance in the 2H chart. I got in at 1.5692 and got out at 1.5994 for -2 pips because it did not look like we would see a strong pullback. In the end the US session was +13 on ¼=+3 full pips. A BE day for me Let’s see if bulls can carry the momentum into the weekend. The key level is still 1.2365 in EUR/USD. We have the 50% Fibonacci retracement around the level and it was also a previous support. Short term support is now the 1.2280 area which was the June 1st low.
It has been quite an interesting week. The market looked weak in the beginning of the week but comments from ECB Draghi that the ECB will “do whatever it takes to preserve the Euro” sparked a quite impressive rally in the markets. Basically that means the ECB will do more bond buying but with that kind of comment the ECB better don’t disappoint next week on the meeting. A classic short squeeze changed the technical analysis picture in most pairs.
EUR/USD slapped Euro bears in the face on the comments from ECB president Dragi. Once the 1.2170 level got taken out there was no holding back and every short was running for the exit. The classic short squeeze scenario brought EUR/USD right to the 1.2320 resistance area where fresh sellers stepped in. The pullback was short lived and EUR/USD made fresh highs on Friday. As you know I regarded the 1.2365-75 is key area because we have the 50% retracement and the some technical resistance at that area. We also got the 61.8 Fibonacci expansion level in that area measured from the bottom of the 3rd impulse wave to the top of that wave and the third point at the bottom of the 4th correction wave. The 5th wave brought the pair slightly above the 61.8% FE level and also above the 50% retracement level. Some heavy selling into the close let EUR/USD pull back about 100 pips to the 38.2% retracement level. It will all depend on the ECB on Thursday how we finish next week but from a technical perspective I see the 61.8% retracement level /100FE expansion level coming next. That would EUR/USD lift to around 1.2450. There is some former support at 1.2410 which is now resistance though. We could also see an ABC correction after the 5 wave move first before moving higher. For now the pair has broken the recent downtrend. The fundamental problems have not eased though and I expect still 1.1875 this year.
GBP/USD had also a good week with the pair testing its upper end of the range again. I don’t get too excited about that pair yet as long as we stay in the 1.5400-1.5780 range though. Nevertheless the pair is trading about the 5 day and 20 day VWAP again. The Fibonacci expansion levels show 1.5817 and 1.5920 as further upside targets. The minimum 38.2 FE target got hit and it remains to be seen if Cable can break the immediate resistance level and get to the next FE levels. Support comes around 1.5575 what is also about the midpoint of the range and 1.5400 remains the major support. If the pair gets past 1.5800 then Shorts could throw the towel for now. There is not much resistance until 1.6300.
AUD/USD managed to close on a very bullish note here on Friday. The pair closed above the former 1.0475 major swing high point and looks set to go to the 100% Fibonacci expansion at 1.0524. I could even see here the 1.61% FE level in the next days if the risk-appetite continues through next week. That would be just above 1.07. While everything looks very nice now for bulls the AUD/USD was in dire streets a couple of days ago when the major trend-line in the hourly chart got tested. The pair bounced almost to the pip from that support to new highs but a break would have been broken the recent uptrend. I don’t see also any reason on the daily chart why AUD/USD could not go to the 1-07-1.08 area. The only thing which could concern bulls now is the fundamentals. If the ECB fails to deliver next week and Mr. Draghi comments prove to be hot air then risk-aversion will come back into the market. AUD/USD is poised to fall lower then. Support will be the 1.0275 area and the mentioned trend line.
A new week and the market seemed pretty indecisive. EUR/USD was grinding lower all morning but for me was just another retrace in an uptrend. I was not keen going short in front of the 5day VWAP and 100 hourly EMA. The main trend is still down though with EUR/USD not being able to close above the 50% retracement so I could make a case for long or short and therefore I just stood away from the pair. The Australian Dollar did hold up well and the equity market also looked still ok. I was looking to buy the strong currency against the weak so a short EUR/AUD with ½ size with a stop above the 30min 20 EMA seemed reasonable. I got in at 1.1730 and was looking for 1.1700 just in front of the previous swing low in the hourly chart which also represents an All-Time low. I closed half for +7 pips at the 38.2% Fibonacci expansion level target and got out for BE on the other half when we did not get more follow-through momentum. We are now trading at 1.1664.
AUD/USD was still looking good to the upside but I really liked the German DAX after a retrace to the 61.8% FE level and the 30min20 EMA. I thought if the DAX makes an attempt to fill the morning gap we should also see some AUD buying on the risk-on correlation. I went long AUD/USD ¼ size and AUD/USD faked a little higher and I got out for -7 pips when the momentum faded once again. AUD/USD hit the lower end of the morning range afterwards and I took a second long at 1.0466 again with 1/4 size. Since the 100% FE target was still open I had a 1.0490 target in mind. The DAX pushed higher as expected and so did AUD with some delay. I closed the trade at 1.0482 for +16 pips on 1/4 size getting +4 points for the morning.
Even I am slightly bullish for the market in front of the ECB meeting I will probably stay away here in the US session.
Again no decent moves here in the European morning. GBP/USD saw a bit weakness but that was basically all we got. I tried 3 trades and closed all at BE on lack of any momentum I won’t even bother you with going over the trades. It is pretty hard to trade in a 30 pip range and close to impossible on a 15min chart. I spotted a decent setup in EUR/USD at the beginning of the US session though. EUR/USD broke the little trend line which kept EUR/USD on a bearish tone this morning. A higher high in the 15min chart and a retrace back to the 30min 20 EMA and the 38.2 Fibonacci expansion level got me into a long ¼ size at 1.2270 and I added at 1.2278 when I saw the EMA got respected with a little bounce. I put my SL tightly at 1.2270. I tried to get out near the 38.2 FE level and in front of the round numbers. My exits were a bit mediocre and I got +8 and +12 in the end for +20 on ¼=+5 points for the day. The US session trade was announced on twitter for the members.
We have the first day of the month tomorrow. Usually it is a day where fresh money enters the market. I will therefore look for risk-on plays.
We saw another choppy morning here with risk-appetite at the beginning of the session because of the start of the month money flows. I was eager to get long before the market opened and call a long in EUR/USD with just ¼ size at 1.2312. I planned to add on a retrace to the 30min 20 EMA. We never got a decent retrace and I got out in front of the previous swing high at 1.2324 for just 12 pips. So +3 full points here for the morning. A comment form the German Bundesbank president Weidmann that “the ECB must not overstep its mandate” was enough to send EUR/USD down to the 1.2290 level before bouncing again. EUR/USD is just consolidating in a triangle pattern now. The market will now wait for the FOMC meeting later. I don’t expect any action by the FED later and this could give USD a little boost but any hint on QE3 could also lead to some USD selling. I stay flat. I am not even sure if I will trade in front of the ECB meeting tomorrow. I don’t expect any larger move in front of that event anyway. My guess is that we will probably see a rally in EUR/USD on the ECB actions ( I expect some meaning announcements) but them some selling on doubting the ECB plan. Let’s see.
It has been the expected wild ride here. EUR/USD saw some short covering on fear that the ECB takes some immediate action and then reversed on the disappointing results of the ECB press conference. The ECB set the bar very high with the ECB president’s comments last week so it was likely that the market was expecting too much. In the end the ECB put the responsibility in the hands of the EFSF. I was nevertheless convinced that we see some short running for the exits in front of the ECB statement and tried to bring me into a position to be long right in front of the press conference without much risk. I went long EUR/USD early this morning at 1.2254 with ¼ size on hopes of early short covering but was caught by a small retrace and got stopped out for -12 pips=-3 full pips. EUR/USD went higher afterwards and broke intraday resistance around 1.2260 and I was looking for a pullback to that area to get long again. I took the long at 1.2267 with a 1.2253 SL and got unsure myself about a possible move higher and closed at break even. EUR/USD went all the way to 1.2400 shortly afterwards and I was left behind. The reversal was very violent and has taken EUR/USD down to 1.2140 where I have a bit of support in my charts. The Fibonacci expansion levels show an ugly picture here with the 100% FE in the 15min chart now around 1.2000. I don’t any reason why we could not hit the level in the next hours.
The only thing which could save the Euro here would be very ugly NFP numbers tomorrow. Today’s data was already soft so that could spark some QE3 hopes and a weaker USD. A true ugly contest here.
No trades weretaken on Friday in front of the NFP numbers.
We witnessed the expected wild rollercoaster ride in the markets last week. It was not an especially good week for trading but for the US session since most market participants were waiting for the events to unfold in the North American session. In the center of attention were the FOMC meeting, the ECB meeting and the NFP numbers. The FED started the package of news. As expected we saw no action taken by the FED. Some expect Q3 in September now; some say the FED will wait to announce another round of QE after the election in November. Who knows. Fridays strong NFP numbers suggest a later date. The most important event has been the ECB meeting minutes on Thursday. The ECB president se the bar very high last week with his comments and it was very hard to satisfy the market. We saw a strong risk-on rally in front of the ECB press conference and an immediate reverse on the disappointment of not taken any actions. The mentioned stronger NFP numbers and the hopes of a solid EBC plan in the future gave the market the needed confidence to erase the losses form Thursday. Equity market finished at highs for the week and so did the” risk-on pairs” in Forex.
EUR/USD had a little volatility breakout while trading up and down in heavy swings. It looked like EUR/USD would break down after MR. Draghi did not deliver but EUR/USD climbed back above the 1.2170 support. EUR/USD was grinding higher on Friday before the NFP numbers. With the numbers coming in much better than expected many would have thought EUR/USD would go lower on stronger USD. Better numbers indicate a less likelihood of QE and therefore a stronger USD. The problem with the logic is that it is also unlikely that Euro will go down in a risk-on environment. In the end the risk-on sentiment won over the stronger USD thinking and EURUSD went all the way up to the pre-Draghi speech highs. The pair is facing the 1.2410 old support which is now resistance and the 61.8% retracement level at 1.2444. I would say the pair is not out of the woods here as long as the pair does not breach the 61.8% level. If EUR/USD manages to break through that level significantly than the path is cleared to 1.2700 again. Support remains the 1.2170 area and more at 1.2150.
GBP/USD is still stuck in the 1.5400-1.5780 range. The pair is becoming a nightmare for trend following traders and a heaven for traders who like ranges. There is not much to say about this pair until it breaks the range. It is trading above the 5day and 20 day VWAP again but MAs are mostly worthless in a sideways range. I am totally neutral for this pair. Cable made a series of lower highs but also three higher swing lows. With the range getting a bit tighter we will see a triangle pattern evolve and then we have to see to which side the break out occurs. The daily chart does not give any clue either since the pair is trading in a sideways range for two years now.
AUD/USD continues the nice recent uptrend. If the pair can break the previous swing high I don’t see any reason why AUD/USD should not reach the 161.8% Fibonacci expansion target. The pairs bounced nicely from the old resistance level. A classic resistance becomes support scenario at 1.0440. More support down around 1.0280 and the trend line which is slightly below that area at the moment
No trades were taken yesterday due some technical issue with the Live room.
We saw a bit of risk appetite today once again. Equity markets looked like they could use a breather this morning and I was looking for a “risk-off” trade. GBP/USD looked the best with the pair trading below the daily pivot and the moving averages. Cable also broke the triangle pattern to the downside. I went short with a 1/2 size right after the London open in anticipation of some USD buying and some selling in the equity markets. Stocks went higher though and USD got weaker. I tried to hedge my “risk-off” trade with a “risk-on” trade. The AUD/USD looked good to the upside and I went long in this pair with a ½ size. I took off the AUD/USD for +10 pips and let the GBP/USD run in hopes the Daily pivot would hold. The pair over-run the pivot and I got stopped out for -29 pips. -19 on ½ = roughly -10 pips here for the morning. We saw a classic trend reversal here. GBP/USD made a lower low immediate followed by a higher high. Overall the pair remains in a messy sideways range.
EUR/JPY was also on the bid and I was looking for a re-test of the breakout level/pivot to get into a long trade. I went long with a ¼ size at 97.22 which was kind of sub-optimal since the pair retraced a bit further. Nevertheless the setup played out well in the end and EUR/JPY went higher from my buy-zone. I was able to put the initial 96.80 stop behind the new swing low in the 15min chart. My exit was too soon in the end but I wanted to have some pips after the losses from the morning. Just +15 here =roughly +4 full pips. The pair still has potential to 98.45 where I see the next major resistance level.
My final trade came in the EUR/USD. I was looking for a break of the 61.8% retracement level in the hourly chart since I consider a break pretty meaningful. I went long with a ¼ size at 1.2334 and with a tight stop at 1.2320. Usually I don’t go long in front of resistance but the momentum looked good enough for a break of the 1.2444 resistance level. EUR/USD got rejected around 1.2440 once more and I got stopped out. The US session ended at break-even for me.
The market is still looking pretty bullish at the moment. I would not exclude 1.0700 in AUD/USD and 1.2560 here in EUR/USD in the coming days.
We saw the risk-appetite fading away a bit in yesterday late trading and I was looking for risk-off trades today especially since it is Wednesday. On Wednesdays the market tends to buck the trend often as traders take some profits. The problem today was the fact my preferred pairs were trading still above support levels. I really did not want to go short right in front of the 100 hourly MA and the 5day VWAP as that was the case in EUR/USD and AUD/USD in the European morning session. NZD/USD was trading already below the 100 hourly MA and the 5 day VWAP. I went short with ¼ size and planned to add after a retrace back to the 30min 20 EMA. The chart in the DAX supported the trade idea since the DAX was also trading below the daily pivot the whole morning. For some reason the positive correlation between the Equity markets and the AUD and NZD did not apply today and while the DAX was weak the NZD resisted falling while AUD/USD even moved higher. I guess Euro weakness might have been the main reason since cross selling in EUR/AUD and EUR/NZD helped the AUD/USD and NZD/USD here to hold the lows. In the end I closed the trade for -1 full pip. More risk-appetite in the US session caused NDZ/USD to move even higher so it was a good decision to get out of that trade. Nevertheless I would not exclude a move back to the 20 day VWAP here. The 161.8% Fibonacci expansion level is still valid and exactly where we have the 20 day VWAP right now. That would be at 0.8040. For now we have higher highs and higher lows in the 15min chart so I have to wait here a bit to get a sell signal.
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