The markets on the pairs I am watching are at the crossroads at the moment. Some are at levels where the price action is ambivalent and there is little to trade either way. The two pairs that appear to have some promise are the EURGBP and the EURJPY. Even then, from the perspective of a swing trader, none of the two pairs appears to offer favourable trading opportunity with minimal risk or much confidence either way. I will be on the sideline until there is clarity in market direction.
I will be bearish on the EURUSD this week unless fundamentals threaten my weekly technical outlook. Here’s why.
On the H4 timeframe, price action has been ranging (area bound by magenta coloured horizontal lines) since late September 2017. Last week Thursday, price action broke the range southward. But the last session on Friday saw the bulls pushing price back northward. If the bulls succeed in this move in the early part of this week, we may see price action retesting the range before any southward turnaround. I will be interested in a retracement to the 50/61.8 Fib zone of the most recent swing down; from where I will look for a sell trading opportunity.
After the drop of price from the high of May 2014, on the weekly time frame, price action on this pair since February 2015 to December 2016 has been consolidating. A retracement of price action to the 50 Fib level of the drop from the high of May 2014 to the low of December 2016 was seen on this pair in September 2017. Thereafter, price action has turned southward respecting a resistance trendlne (chocolate colour) from the high of September 2017. A trendline line from the low of January 2017 (navy colour) is in play. The most recent price action has been bearish and has breached the monthly central pivot. The technicals on the weekly time frame support a southward move.
On the H4 time frame, price action which has been operating in an ascending channel since March 2017 started bearing southward in a descending channel in September 2017. Last week, the most recent price action consolidated against the impulsive southward move and can be expected to give way to a bearish continuation. The technicals on the H4 time frame favour further southward move. A break of the channel support is likely to target the 1.13210 area.
On the H4 time frame, price action has broken an inner ascending trendline (magenta colour) and it is now bearing southward respecting a resistance trendline (forest green colour). Price action has moved southward within a channel formed by this resistance trendline and a support trendline from some of the recent lows but it is now located around a minor support area on the H4 time frame; this location is in confluence with the support provided by an ascending trendline (navy colour) from the low of September 8, 2017. We may see price action consolidate in this area for a while or pull back to retest the resistance trendline (upper forest green coloured trendline) before a bearish continuation. A break of support is likely to target the 1.25520 area. This may extend to the 1.24370 area, the next support on the H4 time frame.
Technically, the NZD has been on the southward mode against the majors in the recent past. The situation obtains on this pair. On the daily time frame, price action is respecting a support trendline (navy colour) from the low of October 3017. But the long upper wick on the candlestick formed last week indicates that bears were pushing price southward. This may result in a retest of the trendline.
On the H4 time frame, price action is operating within an ascending wedge and two price waves have formed within it. The third price wave began on Friday and is likely to head southward; otherwise we may see a consolidation of price action or a retest of the resistance line of the wedge. Notice that an inner ascending trendline (blue colour) is being respected as support by price action and current location of price action is about 150 pips above it; so a retest of the trendline may be expected. A breach of this support trendline is likely to see bears target the channel line below, resulting in the completion of the third price wave within the channel. Nevertheles, price action around the 38.2 Fib zone of the recent upward swing (in the region of the 1.92350 area) and around the 61.8 Fib retracement zone (in the region of the 1.90580 area) should be watched. But a breach of the 78.6 Fib zone, just below the support line of the wedge (around the 1.89350 area), is likely to result in a bearish turnaround on this pair.
Here’s why I will look for the opportunity to trade GBPAUD northward.
On the daily time frame, price action is respecting a support trendline (navy colour). The recent price action is in a consolidation phase. This may result in a retest of the support trendline before further northward move. We may expect such a pullback to target the 1.73760 area. An initial target for bulls is the 1.76250 area, which is an extension of the immediate resistance zone.
On the H4 time frame, price action is respecting a support trendline (magenta colour). However, the price action is in an area of consolidation and momentum seems to be waning. This may lead to a pullback in the early sessions this week before a bullish continuation.
Because GBPUSD offers a better directional bias than EURUSD, I will be tracking it for trading opportunity this week. Here’s my top-down technical outlook on GBPUSD.
The pair has disposed northward since much of October 2017. On the daily time frame, price action is operating in an ascending channel (bound in red coloured lines). Five price waves have been completed. However between mid September and mid November 2017, price action has largely been sideways. Bulls took price action northward in late November but failed to reach the distal part of the channel. Nevertheless, price action is still under the control of bulls although there was a pullback of price by bears last week Friday. We may expect a pull back to a support trendline (navy colour) in the days ahead. This may extend to the distal channel line.
On the H4 time frame, bears took control of recent price action and pushed price southwards. However, the ascending (support) trendline seen on the daily time frame (navy colour) is still intact. An immediate target of the southward pullback is likely to be the 1.33420 area, which is in confluence with the 38.2 Fib zone of the upward swing from the low of November 13, 2017. This may extend to, or expose, the 50/61.8 Fib band, which is proximal to the immediate support on the H4 time frame and may be a retest of the support trendline (navy colour). In fact, price action may continue southward to retest the proximal channel line (red colour) seen on the daily time frame. Thereafter, we may expect price action to turnaround northward.
After a long period of consolidation between 2008 and 2014, price action on GBPUSD broke down the consolidation channel in January 2016. On the weekly time frame, two impulse price waves have been formed with corresponding corrective waves. Presently, price action is riding the second corrective wave in an ascending channel formation (bound in blue coloured lines). We should note that price action is respecting a resistance trendline (chocolate colour) from the high of July 2014. Although the most recent price action has spiked above the resistance trendline, it coiuld not breach it as bears restrained the move. This led to the formation of an indecision candlestick last week. The corrective channel (blue colour) is still in play but the most recent price action has been limited to the lower half of the channel (mid-line coloured in red). We may expect a southward move which could retest channel support and may breach it to target the immediate horizontal support around the 1.29460 area. Alternatively, price action may dispose northward to retest the mid-line or the immediate resistance around 1.35750 area.
On the H4 time frame, price action has surged southward into a significant S/R zone. This zone has a confluence of support: the mid-line (red colour) of the channel seen on the weekly time frame, the monthly central pivot, a previous demand level and an ascending trendline (turquoise colour) from the low of November 13, 2017. We may expect price action to operate sideways within the zone before further southward move materializes. Should price action break below this zone, bears are likely to target the immediate major horizontal support around the 1.29460 area. Technically, this seems to be a more likely scenario than the alternative of bulls taking price much further up, although we may see a little pullback because of the immediate hurdles bears have to handle around the current location of price action.
I am bearish on the GBPUSD this week. That is, I will look to trade the pair southward at the right time and location. Here’s why.
On the H4 time frame, price action has surged southward into a significant S/R zone. This zone has a confluence of support: the mid-line (red colour) of the channel seen on the weekly time frame, the monthly central pivot, a previous demand level and an ascending trendline (turquoise colour) from the low of November 13, 2017. We may expect price action to operate sideways within the zone before further southward move materializes. Should price action break below this zone, bears are likely to target the immediate major horizontal support around the 1.29460 area. Technically, this seems to be a more likely scenario than the alternative of bulls taking price much further up, although we may see a little pullback because of the immediate hurdles bears have to handle around the current location of price action.
Technically the USDCAD is constrained in a corrective channel, if you look at the order flow context and market structure on the W1 time frame. We may have a brief upward move but there are barriers to northward momentum. We may expect to see a bearish turnaround within the first two days of this week. The attached W1 chart shows the corrective channel or flag formation bound in chocolate coloured trendlines while a resistance trendline (magenta colour) is still in play.
If you are tracking AUDUSD this week, consider this technical perspective.
On the daily time frame, price action is respecting a resistance trendline (navy colour) from the high of September 8, 2017. Although the order flow is mixed, bears are still very much influential. For much of last week, bulls took price northward but bears restrained the move on Friday. The Friday candlestick printed bearish but we may see some struggle in the attempt of bears to take price further south as price action is in a major support zone. However, there may be a retracement to test the resistance trendline before any bearish turnaround. Should bears succeed in a follow through we may see the 0.74970 area exposed as a target.
On the H4 time frame, price action is respecting a resistance trendline (magenta colour) from the high of September 22, 2017. A descending channel was formed when the resistance trendline is aligned with a support trendline from the lows of recent candlesticks. The most recent price action is at the distal or channel resistance line. There, a flag pattern formed on Thursday and early part of Friday last week but has been broken southward. We may expect bears to follow through with a further southward move this week. The 0.75360/0.75103 zone is an immediate support zone and may be attractive to bears as an initial target. Attempts by bulls to push price northward may be hindered by the resistance trendline (navy colour) seen on the daily time frame.
Are you tracking EURJPY this week? Consider this top-down technical perspective.
On the daily time frame, price action is respectimg a support trendline (red colour) from the low of June 14, 2017. Toward the end of last week, price action made an attempt to break out of a range created since mid-September 2017 but bears restrained the attempt. Nevertheless, bulls still remained in control; the small candlesticks formed on Thursday and Friday last week were basically in favour of bulls. Should bulls follow through on their move and successfully break out further northward, we may see the 136.440 handle exposed.
On the H4 time frame, price action has been consolidating for quite a while. However, last week Thursday, it broke out of the consolidation northward. Last Friday, price action retraced to retest a mini-support trendline (blue colour) and then disposed northward. The trechnicals support further northward disposition. But should price action break below the mini-support trendline, we may see bears push further southward, perhaps to retest the main ascending trendline (red colour) seen on the daily time frame. The monthly central pivot (133.074) or the area around 133.150 may be attractive to bears.
Yes what you are sharing with us is quite impressive and I am as a beginner, finding it quite helpful. i have also at the very first tried to trade with larger lots, sooner my account was blown. Then i began my journey from the very beginning with major pairs and with mini accounts. However, I am still learning and long way to go.
Thank you mate for your encouraging post. Let me suggest that you open and operate only two accounts for now, one a live account for micro trading and a demo account with a different broker. That is, do not use the same broker for your live and demo trading accounts. Use the demo account to test and master not more than two systems/strategies; adjusting them until you find one that fits your personality. Make your system simple and build a few rules to trade it. Do a pre-market analysis before you enter the market and trade less often. Trade your live account only at a small lot, say 0.01 initially until you are seeing some progress in your winning rates but always use a reasonable stop loss, not too tight and not too wide; adjusting for the nature of the pairs you trade. Stick with a few pairs with small spreads for about 6-12 months initially and try to understand/master the characteristics of each pair.
If you are tracking the EURUSD this week for possible trading opportunity, consider this top-down technical perspecive.
The EURUSD has disposed northward since December 2016. On the weekly timeframe, price action consolidated for several weeks at the 38.2 Fib retracement zone of the downward swing from the high of May 2014 to the low of March 2015. Price action is respeccting a support trendline (navy colour) but a resistance trendline (chocolate colour) has constrained upward move of price action since October 2017. It will take a strong bullish intent to significantly break the resistance trendline northward. However, we may see a test of the high of the bullish spike seen in the first week in September 2017, which is around the 1.20935 area, this week before any retracement southward. A major area that will be attractive to bulls is the 1.23340 handle. But this is a location where bears may likely drive price action southward.
On the H4 time frame, price action has witnessed a 32.8 Fib retracement of the upward swing from the low of April 20, 2017 to the high of September 8, 2017. An outer support trendline (magenta colour) is still in play even though price action has moved further upward from it to respect an inner support trendline (chocolate colour); which is an indication of increased northward momentum. Price action is likely to move northward to around the 1.20895 area before any pullback. It is important to note that the outer support trendline (magenta colour) on the H4 time frame is equivalent to the support trendline seen on the weekly time frame.
I did something different in 2017. Before 2017, I had seen much success using my weekly market analysis, including screening of the pairs on my watch list; which led to the choice of a few pairs to trade each week using my swing trading approach. This weekly analysis usually culminates in my developing a one-paragraph trade plan for each pair. But during the year 2017, I introduced the use of a checklist in addition to the trade plans. So, I have a trade plan, which gives me the when and how to trade scenarios that I had analysed; then before entering a trade, I would use my checklist to see that all my criteria for trade entry are met. This has led me to trading what can be seen as A+ grade trades and has kept me out of less viable ones. You may consider using a checklist before entering a trade, if your trading style is amenable to it.
I am in the midst of my weekly market analysis during which I screen and analyse the pairs on my watch list to pick a few that have potential for successful trading next week based on my system. From my current analysis, the strongest currency among the majors on my watch list is NZD while JPY is the weakest.
USDCAD continued its southward disposition last week. This represents a follow-through of the breakout two weeks ago from the consolidation that held for over eight weeks earlier. On the daily time frame, price action gave a good-bye kiss to a support trendline (navy colour) and turned it to resistance on December 19, 2017. Since then, the order flow has been in favour of bears and the technicals on the daily time frame are synced for further southward move.
On the H4 time frame, price action is on a northward retracement. A much likely turnaround area of the retracement is the immediate minor resistance around the 1.24680 area (highlighted with magenta coloured line); this area is in confluence with the 50.0 Fib retracement zone of the most recent swing down. But this retracement may extend to the 61.8 Fib zone, around the 1.25080 area, before a southward turnaround.
