EURUSD Top Down Analysis

View Poll Results: Do you analyse the market with a top-down approach?

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  • Yes

    5 71.43%
  • No

    2 28.57%
  • Unsure

    0 0%
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  1. #1
    Join Date
    May 2016
    Posts
    675

    Post Top Down Analysis on EURUSD and Some Other Pairs

    If you would trade EU, or any other pair for that matter, for consistently good trading results, you would do well by taking a top down approach. This is how I trade as a short-term swing trader but overall it will keep you from making a lot of trade losses. As I trade on the 4-hourly time frame (TF), my top down analysis begins with the weekly TF through the daily and then the 4-hourly. I will use this thread to discuss my top down analysis on EURUSD and other pairs on my watch list, attaching the relevant charts on at least a twice-weekly basis because I am a part-time trader. Any member who has a similar approach is welcome to contribute. I trade turning points (e.g. Pivots, S/R zones and Fib levels) with three EMAs (10, 20 and 50) and RSI.

    Here below are the current EU charts: weekly, 4H and daily. In summary, with the rejection candle formed on last week's weekly TF, as a short-term swing trader the sentiment will be to be bearish; considering trade entry after a retest of the immediate resistance zones (particularly daily S/R, weekly pivot and monthly pivot).
    Attached Images Attached Images      
    Last edited by TrapTheMarket; 05-19-2016 at 01:56 AM. Reason: To expand the scope of the thread to cover more pairs I watch.

  2. #2
    So where were you filled? Where's your stop / limit?

  3. #3
    Join Date
    May 2016
    Posts
    675
    I presented the top down charts to demonstrate the approach and link it with how I trap the market. Before those charts were presented I had been on the trade and the trade is still on. I normally hold my trade for at least 6 hours depending on my take profit target or market conditions. I was trading the EU, which is still on, using a different account as I have three micro accounts. Usually, I don't discuss my exact trade results but may talk about lessons learnt from losses or profits. Good trade to you.

  4. #4
    Join Date
    May 2016
    Posts
    675
    EURUSD bearish tone is still potentially strong. All the HTFs - 4-hourly, daily, weekly and monthly - favour the bears. At the moment, the price action is at a 4-HR S/R area which it will easily shake for its southward move as there is no immediate significant barrier on the way; the daily pivot, weekly pivot and monthly pivot are all far to the north. So any retracement would not likely be to any extreme unless there are fundamentals (e.g. EUR and USD data releases later today) that may ruffle the current technical disposition. As I have been in a short trade position on the EU for a while, my interest will be to see how farther south the move will be to favour my take profit target.

    Attached are the top-down charts. Enjoy your trade.

    Name:  EURUSD_Weekly_Top_Down_May_18,_2016.jpg
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Size:  23.7 KBName:  EURUSD_Daily_Top_Down_May_18,_2016.jpg
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Size:  29.1 KBName:  EURUSD_4-HR_Top_Down_May_18,_2016.jpg
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  5. #5
    Join Date
    May 2016
    Posts
    675
    Tip:
    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.

  6. #6
    Join Date
    May 2016
    Posts
    675

    Post AUDUSD Outlook

    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.Name:  AUDUSD_Weekly_Top_Down_Analysis_May_19,_2016.jpg
Views: 994
Size:  30.9 KBName:  AUDUSD_Daily_Top_Down_Analysis_May_19,_2016.jpg
Views: 967
Size:  32.8 KBName:  AUDUSD_4-Hr_Top_Down_Analysis_May_19,_2016.jpg
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Size:  27.6 KB

  7. #7
    Join Date
    May 2016
    Posts
    675
    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.
    Last edited by TrapTheMarket; 05-20-2016 at 09:24 AM.

  8. #8
    Join Date
    Apr 2014
    Posts
    677
    Thanks for the useful tips, keep up the good work.

  9. #9
    Join Date
    May 2016
    Posts
    675
    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.
    Name:  GBPAUD_Weekly_Top_Down_Outlook_May_22,_2016.jpg
Views: 851
Size:  27.3 KB

  10. #10
    Join Date
    May 2016
    Posts
    675
    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.

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