There is really not much to say about the last two European sessions. Both very choppy and had some intraday reversals. Not the best conditions to get some pips as trend follower. Monday’s session ended -2 pips. I was in general looking for long USD since I think EUR/USD has still some room left to the downside before going higher again and GBP/USD also need a bit of a breather here. Today I went short in EUR/USD at 1.2901 with a relatively wide stop at 1.2945 and a 1.2850 target. I was a bit impatient with the entry. The initial plan was to wait for a retrace back to the 30 min 20 EMA and then go short. The retrace only brought EUR/USD to the 10 min 20 EMA and the price fell back. I did not want to miss the trade and got in with a barely acceptable entry level. We saw a lot of up and down during the session in a tight range and I put the SL down to 1.2927.At the end of the live room session I was down 1 pip and closed the trade. I still think 1.2820 is a strong possibility here in the next hours. We will see.
The European morning session continues to be a challenge with trend reversals in the 15min on every day this week so far. Since I do 90% of the time follow the trend I was not able to get any pips out of the market this week. The last two day ended combined -3 full which is actually not that bad if you consider the price action.
The Asian markets looked pretty strong with the Chinese stock market gaining about 2%. I though the risk-on mood might carry over into the European session but the market proved me wrong. I went long EUR/USD on two ¼ positions but I saw no upside momentum and decided to close for +2 and -7. When I saw the pair bouncing of the daily pivot I decided to go for a second attempt. The trade was about 10pips in the plus and I put the SL to BE. With the trend reversal I got stopped out at break even. In the larger picture the pair made 10 consecutive losing days so I thought maybe today is the time where the retrace might come to an end. The pair got to the 1.2830 area later and that was about my target for the retrace. (see prev. posts) A strong reverse in the US session led the pair to break the 1.2900 resistance and now things look pretty good for the daily trend to continue. Targets are 1.2970, 1.3040, 1.3150 and I even would not exclude 1.3270. If we are still above the 100 hourly EMA tomorrow morning I will look for long again.
Hello,
The last two days have been again very uneventful in the European morning session and ended both at break even. On Monday I took a single GBP/USD long trade and closed at break even. I spare the details here. Today we had an absolute snore fest and traded in a tight sideways range. I was looking either for a retrace in AUD/USD to the 30min 15 EMA for a short or for a break in EUR/USD to the upside and a re-test of the trend line for a long. We got neither setup. Both setups occurred after the session though. For EUR/USD it is now make or break time. We got the trend line break and a move above the 20 day VWAP. The pair even took out the 1.2860 resistance but not very significantly. Nevertheless the daily chart looks bullish again. I don’t see much reason why we could not test the highs again. The pair even re-tested the 200 daily SMA and got a nice bounce of it. Stocks do hold up well and so does Gold. So it seems that the way is paved here for another run up. There is always a “but” of course. Even if we forget about the debt crisis here the risk-on mood might come to an end soon here. AUD took a heavy hit today and Stocks could also not continue their start of the month money flow rally. We have a few red flags here with some charts in some sectors looking very vulnerable already like in the US transport sector. I could still see a run up here in EUR/USD but I doubt that we see new highs easily. 1.2640 is also still in the cards. I am cautiously bullish for the pair but it need to stay above 1.2880 for the moment. Target are 1.3008,1.3040 and 1.3140.
Hello,
The market has been very quiet in front of the ECB/FOMC/NFP. Most traders wait for direction here as most stuff just trades sideways. EUR/USD has attempted to break 1.2950 resistances but failed a couple of times and felt back into the range. It still looks like we could see that breakout soon but much will depend on the news here and how the market likes it. I don’t expect much new to hear from Mr. Draghi and Bernanke. I guess the focus will be on the NFP numbers and if the US can get out of the slump. Technically I see EUR/USD now back on the way to 1.3150-1.3270. Up there I think we could see a reversal again to 1.2640.
I did not take any trades today and yesterday only a short in CAD/JPY which broke the support and then came back to the 20mon 20 EMA/100hourly. That move was good for 20+ pips but I only grabbed +12. Let’s see where we are after the NFP numbers. Any deep technical analysis is pretty much worthless before the number.
The last two days have been mostly waiting and see. As expected we did not get much direction until the ECB press conference. As you know from my previous posts I liked the EUR/USD higher from a technical view but that did not much matter in front of the ECB/NFP news. To my surprise the EUR/USD reacted more bullish than I anticipated during the ECB press conference. Mr. Draghi did not say really anything new. Maybe it was just an excuse for buyers to get in and to fulfill the technical picture. The NFP data was decent but not spectacular. The August numbers got nicely revised to the upside but that is pretty normal. Usually they get revised by +66k over the last 10 years at that time of the year. As expected the USD/JPY benefited the most from that. EUR/USD hit the 127% Fib Expansion measured from the first impulse wave to the upside and also the 1st standard deviation band from the 20 day VWAP. The 20 day VWAP is trading sideways and that suggests we get a retrace back to the VWAP here but technical resistance is not seen until 1.3125. As I stated before I expect a test of this area and maybe even higher prices up to 1.3270. In the end I think EUR/USD will top out between 1.3125-1.3270 and this could be a longer term swing short opportunity. The pair still did not get a test of 1.2640 which I think is also likely. The question for me was rather what will come first: 1.3125 or 1.2640. For now it looks like 1.3125. As for trades in the Live Forex day trading room I did not get a setup on Thursday. On Friday I took a short in EUR/USD at 1.3007 when we saw a bit weakness and a move back to the 30min 20 EMA.As usual I put my SL to BE very soon. In this case I was also concerned that the pair might bounce off the round numbers again. And so it did.
The market is still pretty much without any clear direction and the volatility remains low for the time of the year. Risk-on and risk-off switch on daily basis and most of the moves seem rather random. There is still doubt about the recovery of the global economy and in China and the US especially. The European debt situation is not so much an issue at the moment even there are still some worries about Spain. There seems to be a large enough safety net right now though that even if things go worse it would not be the end of the world or rather Europe. Stocks are still holding up but I sense a bit of weakness coming into the market. We don’t see new highs anymore and the upside momentum lost its steam. The earning season will be a decider here if stocks are able hold up or we finally see some correction here. I think we see one but it is too early to make a call here for a drop. Gold went meanwhile to new highs but consolidates now in a rather tight range. Overall there is a cloudy picture here to analyze. Let’s just say it could go both ways and even nowhere. I stick to my assumption I made in my previous posts: Expect some swings in both direction in the coming weeks. I see a sideways market here in a broader range. The USD will probably also not see a strong trend here for the remaining moths of the year. Stocks will rather underperform.
The EUR/USD looks almost boring right now. The pair did not quite get to my 1.3125 level before turning down but just to 1.3070. From there it tested the 1.2820 lows and found support there. Fridays close was in the middle of the range. The 20 day VWAP is almost flat here- a clear sign for a sideways market. A break of support would trigger a move to 1.2640. A break of resistance should lead to a test of the recent highs. There is really no way to tell what we see first. In the end I still expect a test of 1.2640 but the chart does not give any clues about the timing here.
GBP/USD has seen more profit taking from that major run to the upside and was trading even below the 1.6000 level at some point his week. The retrace has not been very clean. Also some major high points where taken out again before the selling continued. Meanwhile the pair made some higher highs and higher lows in the 2H chart but is still trading well below the 1.6125 major swing high which also marks the clear resistance for now. Nevertheless the recent trend has been down and I still expect a test of the 1.5910 support area before another possible cleaner run to the upside. A move above the 20 day VWAP would negate the scenario for now. A break of the 1.5910 move would suggest a quick move to the next support at 1.5750. I am looking for long at support right now. Until we get there the pair remains tough to trade and to predict.
There is not much to say about AUD/USD either here right now. The pair failed to take out the resistance at 1.0620 but there was also no follow through move at the 1.0690 support. There is no way to tell if we see a more convincing bounce off the support area now or a break through. In case it breaks then there is not much in the way until 0.9800 and then major support at 0.9650. I guess much will depend on the US stock market in the coming weeks and if we get a bit risk-off on disappointing earnings. The pair seems also be driven by some large moves in EUR/AUD in both direction lately. I will wait here for a break of support and a re-test to go short. I am not interested to trade the pair much in case of some consolidation/triangle pattern. At least not in timeframes above the 15min chart.
The room trades in the session were not great this week. Overall I think I piled up a loss of around 10 pips. We got some nice setups after the session working out. On Friday I recommended to take a long GBP/USD at 1.6040 with a 16015 and a 1.6095 TP. That worked pretty well to pip for +55 pips. The Cable made a higher high in the 15min chart and a told the people in the Live Forex Day trading room to wait for a retrace to the 30min 20 EMA/100 hourly to get an entry and hold until the next resistance. It does not really matter when the good trades come as long as you follow the plan for the day. There was also a good EUR/USD setup after the morning seesion which was good for 100 pips last week but I just gave the entry level and stop without a target.
The market did present itself still pretty indecisive about the direction. Stocks were trading sideways while the currency market was hard to trade with a couple of trend reversals. Overall the USD gained a bit of strength back while the EUR faced some profit taking and the GBP came under pressure later in the week. I expect the market to stay trendless until we see stocks finally correct a bit.The Live session result for this week was again a small loss for -9 pips.
EUR/USD got denied just in front of the 1.3160 resistance level. If we look at the Fibonacci expansion level you see that the pair hit the 200% level of the smaller impulse wave and came back to the 100% level. This is the 4th wave in my count so I expect one more impulse wave to the upside with would complete the move. I think 1.3170 might get tested here again and then we should see some larger correction down to the 1.2640 support level. For now technical support comes at 1.2990 and 1.2830.If 1.2830 gets taken out we have a spider top formation here and then 1.2640 are pretty certain.
GBP/USD was actually doing fine for most of the week but there was still that important trend line on the way which kept GBP/USD down. The first test of the trend line got sold but we saw a second test of the resistance a few hours later. Usually a sign of a break through and I was looking for a break and a re-test of the trend line to go long. The timing of the second test of the trend line was unlucky for Cable bulls. Google missed the earnings and that sparked some risk-off in the markets. A second failed attempt to break higher+ risk off snowballed a bit then and buyers throw the towel. The sell-off was sharp and after some consolidation the pressure continued on Friday. The pair is trading below the 5 day and 20 day VWAP again. It is trading also right in front of the 1.5980 support. I think we see a test of 1.5880 supports though and then things are left pretty open to both side. For now it is still just a retrace of the September run in GBP/USD and until 1.5750 is not getting in danger the longer term picture still remains rather bullish. For now I would go with the 1.5800 re-test scenario and then a move higher. I am not sure if the pair can run up much higher if EUR/USD goes down to 1.2640 at some point but I expect the GBP over performing compared to EUR and AUD. If we get risk-off then I would prefer to short EUR and AUD rather than GBP.
The AUD/USD remains pretty dull in the larger timeframes. While we have a low volatility markets in general the AUD/USD this by just looking at the daily chart. There is nothing new to say about that pair to my last weekly review. The pairs need to break the range to get new impulses. It think 1.0150 might get tested soon again and I feel this time it will not hold. Look for a break of that area and a re-test to go short with a 09930 target. Right now you can trade this pair only the lower timeframes. Hourly support is coming at 1.0290. A bounce off that level could trigger the 5th wave to 1.0450.
Hello,
The week was a bit easier to trade in the European session than the previous weeks. We saw some decent straight moves without the trend reversals which have been characteristic lately for the London open. The EUR/USD was the loser of the week while the GBP/USD and AUD/USD were up for the week. So there is no real USD strength here but Euro weakness. Spain still did not ask for a bailout and Greece will miss their targets to cut the deficit. This was certainly not helping the Euro along with some weak economic data and earnings out of Europe. The pair is trading below the 1.3000 level again. I still go here with my 1.2830 scenario and then 1.2640. Interesting by the way that the GBP/USD exactly bounced off the 1.5910 long level I was pointing out on October 14th. The trades in the Live Forex Day trading room have been up for the week but I traded on ¼ size since the longer TFs in the EUR/USD are still conflicting until it breaks 1.2830. Overall we made 40 pips. I went mostly with the trend which is often a good idea. The chart shows how the EUR/USD broke the MA cluster on Tuesday to the downside. I went short for 12 pips and wanted to get back on a retrace to the 30min 20 EMA. As you can see the pair never came back and I missed the following move. On Wednesday the EUR/USD made the comeback to the EMA. I went short on a bearish candle which closed below the 30 min20 EMA and closed the trade for +30 pips. Let’s see if we get more setups like this next week until we get to 1.2830.
The FX markets are still without any direction and the volatility remains low. Traders have to deal with a sideways market for the last two months now. While most traders also thought that we would see an increasing momentum after the dull summer months -it all got very quiet after the QE3 announcement run up. We are at some critical levels at some USD pairs though and I think there is a good chance that we leave the sideways ranges for good next week. We have the presidential election in the US on Tuesday and after that I think the market will wake up. The European morning sessions in the Live Forex day trading room ended + 25 pips for the week on a few small scalps (+8,+12,0,+10,-5)
EUR/USD established a pretty solid downtrend in the shorter timeframes this week. In the daily chart the pair is still caught in the 1.2800-1.3200 range. The pair finally tested the 1.2835 support as predicted (see prev. posts) on Friday. Not only USD demand but also some Euro Month end/month start selling helped Euro bears here. I think EUR/USD will not hold the support and the 1.2640 scenario is still likely. As I pointed out in one of my previous posts at this support level things become difficult to predict. Technically it would be just a re-test and then a run above 1.3000 is possible. On the other hand the weekly chart is still down. For now let’s go with the facts: EUR/USD hit a 161.8% Fibonacci expansion level and sits at strong support. I would look for a break and a re-test to go short with the 1.2640 target in mind. You could argue for a long here as well despite the fact that the pair is trading below the 5 and 20 day VWAPs. Stop has to be at least behind the low of last week.
GBP/USD had actually a good run before running into some late USD strength last week. The pair broke the trend line and everything was set up for a move higher. The 1.6180 resistance area saw a quick test but the pair got rejected hard and fell like a rock to the previous swing low at 1.6000. The pair remains hard to read. There is a pretty wide support zone waiting now all the way down to 1.5900. Unless you trade the smaller timeframes I don’t see much to do here. Overall it is still looking bullish but right now the price is below the 5 day and 20 day VWAP. I am neutral for now and wait for a new trend before I would take a longer term trade.
For a moment it looked like AUD/USD could break out of the range on Friday but risk-off after the NFP data kept the pair in the range. There is nothing to write about the pair in the moment. It is the only pair which is trading above the 20 day VWAP so AUD is doing better than Euro and GBP at the moment. Nevertheless AUD/USD could test the lower end of the range as well. Unless you like to trade ranges there is no setup in sight here as well. These are hard times for trend followers. I expect some movement here though next week depending on how the risk sentiment changes. We have not only the US presidential election on Tuesday but the big party congress in China on Thursday. The AUD reacts sensitive to news out of China with China being the biggest customer of Australian metals.
The US presidential election is behind us and the market will focus on the economic outlook again. It did not take long for a reality check and risk aversion hit the market after a short lived head fake rally after Obama re-election. I think we see more risk aversion for the last 6 weeks of the year and also some increasing volatility and volume. It is a bit hard to say how this will affect the currency market. The inter market correlation did not make much sense last week. Stocks went sharply lower and so did the EUR/USD. Gold on the other hand had a good week while the AUD/USD hold up for most of the week before falling on Friday. Oil had some wild swings meanwhile. Usually Gold and EUR/USD go in the same direction but maybe this is a case of the save haven status of Gold. There is not much to say about AUD/USD and GBP/USD and therefore I will only cover EUR/USD today. The result for the European morning sessions in the Live Forex Day Trading room was -19 pips.
If you followed my post in the last couple of week and also took some positions in the anticipated direction of the EUR/USD you should be up a few hundred pips. As you know I was pretty sure that the pair would see a re-test of 1.2640 and on Friday we came fairly close to that level with a low of 1.2690. With the break of 1.2830 we have a clean spider top formation here. If we measure now the range from the top on the legs to the neckline and project the same range to the downside than we get a 1.2460 target for that bearish formation. This is right in line with the 61.8 retracement in the weekly chart. The question is now where EUR/USD might turn around to the upside again. At the 1.2640 area where we have the 50% retracement as well or almost 200 pips lower? I am looking for a swing trade long in this area to catch wave 3 here in the weekly chart. Remember: In the weekly chart this recent down move is just a retrace of the 1.2050-1.3200 rally. Technically speaking as long as 1.2050 holds there is still not much to worry for EUR/USD bulls. If you want to have a 700 pip stop is the other question. I will therefore look for a long at 1.2650 and a second position at 1.2470. If the price falls to 1.2430 I will “freeze the position” taking a short as well. If we see a weekly close above 1.2460 again I would close the short position again. Wave 3 could bring EUR/USD back to 1.3500 again.
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