EURUSD Top Down Analysis

[B][U]Tip:[/U][/B]
Don’t get into the market just because there is an ongoing strong trend. Wait for a pullback or a trend continuation trade setup. If this does not happen, stay out of the market.

I have expanded the scope of this thread to cover other pairs on my watch list. This will help me be efficient with my time and give members a variety of pairs they may me interested in. As usual members’ opinions and contributions will be appreciated. Today, I want to cover the AUDUSD pair. I have been trading this pair for a while and I like the fact that it respects technical indicators, e.g. MAs, and is fairly predictable. Yesterday, I closed a sell trade on this pair because I wanted to reduce the number of my open trades. I am still bearish on the pair, as a short-term swing trader. The trend on the HTFs I use - 4 hourly, daily and weekly - and the RSI readings are aligned with a further southward push for the pair. The shooting star formed on Tuesday on the daily chart was reinforced by a strong bearish candle yesterday. As the price action has just left the DPP, it will be good to wait for a pull back to around the DPP to enter a sell trade. Caveat: This analysis is presented for educational purpose and is the opinion of this analyst; it does not represent an investment advice. Good luck in your trade.

See charts attached.




The outlook on EU is still bearish. Any northern move is likely going to be a short correction to test the bearish spike around 1.1285-1.1289 on the 4-hour chart.

Thanks for the useful tips, keep up the good work.

I am still bearish on EU although there is room for correction northward to the immediate resistance on the 4-hour chart.

Last week, bears managed to push GBPAUD down from a significant resistance zone. Even though the 4-hour time frame indicates a disposition southwards, the outlook is still unclear on the daily chart, and both the weekly and monthly tfs tend to support a northward direction. Imo, the best action for a swing trader will be to wait for a clearer market disposition.

See GBPAUD weekly chart attached.


The overall GBPAUD market structure and context favors the bull. On the 4-hour tf, the bullish candles have been big and the corrective bearish candles have been very small for a long while. Much likely the bulls will still have their way this week. Trade safe.

Hi TrapTheMarket, there’s a special section of the forum for analysis threads of this kind (which really don’t belong in “Forextown”): [B]301 Moved Permanently :wink:

Hi, Lexys! I started the thread to focus on a top-down outlook on EURUSD and the pairs on my watch list. I want to use it discuss a top-down approach with members’ input/contributions. I don’t see the analysis I do as detailed enough to be under ‘The Analyst Arena’ unless the forum moderator feels otherwise. I want members’ views, particularly those who trade the pairs on my watch list or are short-term swing traders. Trade safe.

Thanks csc. Good luck on your trades.

If you want to successfully trap the market, your timing is key. Beyond price, timing is everything. You have to know when to wait and when to strike. If you enter a trade at the wrong time, you know the result may be detrimental to your account. To trap the market, S/R zones and other boundary-definition factors are important. However, it is very important to use the strong zone-definition factors or levels and know when to enter your trade. Trade safe.

Do you analyse the market with a top-down approach? If so, share your view or analysis here. Although much of the focus is on EURUSD, any pair you want to use as an example of your approach will be accommodated. Good luck in your trade.

I’m now preparing my charts for the week. My weekly outlook on the pairs on my watch-list is as follows:

Bearish: AU, EG, EJ, EU, NU
Bullish: GN, UC
Wait/Mixed: GU

I usually wait for the US open on Monday to confirm where change in disposition needs be effected. Trade safe, trade well.

I love this quote from Mark Minervini as it speaks to the principle of top-down analysis and market trapping:

‘The less time I am in the market, the less risk I am taking.’ – Mark Minervini, a Market Wizard.

[B]Tip:[/B] Focus on trading well, the money will come.

[B]Tip:[/B] If you are going to trap the market successfully, watch price action at daily and weekly S/R zones, then use the significant signal candles that present themselves there for trade trigger.

[B]Nuggets: [/B] Don’t use too many technical indicators or technical indicators that don’t perform complementary roles. Use a few (for me a max of 3) complementary technical indicators as part of a few significant confluence factors to track, stalk and trap the market/price action.

EURUSD is at a weekly resistance zone but there is room for further northward move, GBPUSD is retesting the weekly pivot which corresponds with a weekly resistance zone possibly for a further southward push, USDCAD is making a bearish push through a weekly support zone. Trade well.

Although there is a bearish streak in the EURUSD on the 4-hour chart at the moment, the RSI on higher time frames (daily and weekly) portends a potential for some northward push. GBPUSD is still bearish and currently testing a daily support zone. Trade safe.

[B]Tip:[/B] Trapping the market involves building a trading edge over the market on a consistent basis. This is not a matter of winning 5-10 trades but showing consistency over many (say hundreds of ) trades during which the trader’s net results show remarkable profit which is sustainable.

So does [I]any[/I] kind of profitable trading, surely - more or less by definition? Nobody’s going to profit consistently without having a trading edge over the market? :15: