The descending trend that the pair kicked off in July 2007 is still very much intact. On the weekly time frame, a major retracement of the July 2007 drop was initiated in November 2012 and peaked around the 61.8 Fib zone in June 2015. Price action was sideways for a few weeks in that zone before it driove southwards. Thereafter, price action produced two major descending price waves with pullbacks between November 2015 and December 2016,; the most recent pullback being around the 23.6 Fib zone. Price action is now respecting an inner descending trendline from the high of April 2015. Although the immediate support is about 100 pips away, the technicals and order flow context on the weekly time frame indicate a slow down of further bearish move. The bear candlesticks are not significant in size and bull candlesticks jostle for recognition. The bears may have to overcome the support formed by the ascending trendline (navy colour) from the low of 2016 before being favoured for a further southward move. There is another support zone around 134.073 which needs be contended with by the bears.
On the daily time frame, price is respecting an inner descending trendline (magenta colour) from the high of November 2016, which is the 23.6 Fib retracement of the decline from the high of July 2007. Recent price action was around a zone that has held as an S/R zone in the past and created the Jan 12, 2017 gap (khaki rectangle). Although sellers have been very much in control since the beginning of April, price action is now at the end of an ascending triangle created by the descending trendline and an ascending trendline (navy colour) from the low of October 2016. Should sellers break the support line of the triangle, the initial target is likely to be the low of the Brexit drop, around 133.130. Although the technicals on the H4 are in favour of a further bearish continuation, it may be better to wait for price action to retest the immediate resistance zone (khaki colour) for confidence in a southward drive .
The pair began a declining trend in June 2015. On the weekly time frame, price action began a major retracement in September 2016 and peaked to around the 76.4 Fib zone in November 2016. Since then, price action has made one descending wave with a pullback and the second price wave southwards is in play. The last weekly candlestick was a strong bearish engulfing candle that breached two support zones and closed shy of the next support by just 54 pips. This shows a strong intent on the part of sellers.
On the H4 time frame, a major descending trendline has held for a while but price action has moved lower to respect an inner descending trendline (magenta colour), representing an increase in momentum. The price momentum hit and slightly breached a support line created by an ascending trendline (saddlebrown colour) from the low of September 2016. The last two sessions on the H4 time frame last week saw a feeble attempt by the bulls to push upwards; ending with formation of relatively tiny doji-like candlesticks. Based on the order flow context on the H4 time frame, this portends a further bearish move before any retracement. An initial target, perhaps before the pullback, is likely to be near 108.000, around the immediate support; which is about 78 pips southwards.
If you are tracking GBPJPY notice that price action retraced to the area I indicated (khaki colour) on the H4 time frame on Sunday and rejected it southwards with over 100 pips.
On the weekly time frame, the pair is respecting a descending trendline (chocolate colour) formed by the high of 2014. After the price action created three price waves to the downside, it initiated a major retracement in April 2016 which culminated at the 50 Fib zone in February 2017 and validated the descending trendline from 2014. Price action operated sideways within the 50 Fib zone for sometime in March. Since then the bears took control and pushed the price southwards. Last week, the price action touched the support line created by the ascending trendline (navy colour) from the low of 2016 but the weekly candlestick formed last week was doji-like and thus not a decisive move. Price action would need to breach the support line before an impetus for further bearish move can be seen. Should price action succeed in this, the immediate target is likely to be the next support around 79.278. The technicals on the weekly time frame are in support of a bearish mood.
On the daily time frame, price action since March 2017 has been operating in a descending channel (dark violet colour) but since the beginning of April the price action has moved to the lower half of the channel, creating a pennant-like formation, portending an increase in momentum southwards. It should be noted that the most recent price action is within a zone which has flipped as an S/R role for a while. As there is a confluence of barriers in this zone, price action may struggle before it successfully breaks below the zone. This is likely to expose the next support zone, around 79.278, as the likely target.
A down trend has persisted on the weekly time frame since January 2016. The trend witnessed a retracement in October 2016 which peaked at the 86.8 Fib level in December 2016. Since then price action has been on a southward drive but with strong bullish resistance. Overall, price action is respecting a descending trendline (chocolate colour) on the weekly time frame. However, the nearest support is provided by an ascending trendline (navy colour) from the low of September 2016. Last week a ‘spinning top’ like candlestick was formed after the strong and relatively big bearish candlestick which formed two weeks’ ago. This portends a likely bearish continuation. Should price action breach the immediate support created by the ascending trendline from the low of September 2016, the next target is likely to be around 105.250, which adjoins an area of a multi-year low and support zone. Otherwise, any upward move – likely to be corrective, may target the immediate support around 110.210, which adjoins the 50 Fib retracdement of the January 2016 drop.
On the H4 time frame, price action is respecting a descending trendline (magenta colour). One descending price wave had been completed, including a pullback which was followed by a period of consolidation three weeks’ ago. A second price wave southwards began two weeks’ ago and is still very much in play with a pullback initiated last week. The most recent price action indicated that the bears were trying to exert some influence to begin a further southward drive. Nevertheless, it is much likely that price action will retrace upward to the resistance created by the descending trendline, before any further southward move may be seen as reliable.
If you are tracking NZDUSD, be aware that the pair is operating within a range of about 160 pips. A scalper’s delight? But as a swing trader, I will wait until price action has passed no-man’s land before looking for any trading opportunity. See attached chart; the range is mapped with bold saddlebrown horizontal lines.
Picking your battles very well is central to long-term and consistent success in this business. You pick trading battles that you are well equipped to win. For example: Deciding and choosing which assets to trade, when and how will be part of picking your battles. Do you have a set of clear and specific criteria as well as a system for selecting which pairs to trade at which time and the market conditions that could provide you optimal success? Have you honed your trading strategies and understood how best to gain a profitable edge in the market? How well do you use ‘idle time’ to track the market and sharpen your arsenal?
[B]Just Sharing
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I have always thought Forex trading was difficult until very much recently. Forex trading is very easy; what is difficult is succeeding in Forex trading. And here’s why:
It takes a load of hard work and mental effort to plan and prepare for consistent profitability; and much more mental and emotional effort to wait for the right time, price and location. Only very few traders can do this.
Price action on the pair has been operating in an ascending channel on the weekly time frame since mid-2016. In January and Febrary 2017, price action moved to the lower part of the channel. It surged upwards in the latter part of February 2017 and flagged downwards to the lower part again in March and early part of April. Two weeks ago, a relatively big bullish candlestick moved the price upwards within the channel. This was followed by another bullish candlestick last week which moved the price towards the resistance line of the channel but never reached it. Apparently the upward price action was held by the weekly resistance zone around 1.36947. Should price action breach that zone, the next resistance to contend with is likely to be around 1.37939, an area last visited by prce action in January 2016. Nevertheless, the technicals on the weekly time frame support a further northward move.
The technicals and order flow context of the H4 time frame strongly favour the bulls. The two ascending tendlines (magenta colour) are well-angled for enhanced momentum to the northside and since April 2017 the candlesticks have been predominantly bullish. Three ascending price waves have been fully completed on he H4 time frame and a fourth is in play, much likely to produce a pullback before any further northward move can see further impetus, more so since recent price action has been within a resistance zone. The wicky-top candlesticks recently formed on the H4 time frame give further clue as to the struggle of sellers to wrestle control from buyers, perhaps indicating imminence of a pullback.
The pair has continued the decline it started from the high of 2014. On the weekly time frame, in August 2016, the price action produced a 50 Fib retracement of the drop from the high of 2014 to the low of 2015 after two price waves to the downside. Thereafter, price respected a descending trendline (chocolate colour) from the high of 2014. Since then price ranged within a descending channel. An ascending trendline (navy colour) from the low of 2015 has been respected as support and last week a big bearish candlestick, which engulfed seven previous candlesticks attacked this support around 0.68820 but could not breach it. It should be noted that this area is also adjoined to a horizontal support zone. Should the zone be broken southwards, the initial target is likely to be around 0.67000, the origin of a northward move in May 2016.
On the daily time frame, price action since February 2017 has been on the descent within the channel observed earlier on the weekly time frame. The technicals and order flow context show further bearish move but the spatial relationship of the MAs I use indicate some sluggishness, apparently a decrease in momentum is to be expected. There is likely to be a pullback before any further southward move; particularly as price action is in an area which has acted as a strong support zone for a couple of times in the past and has not been breached since May 2016. A breach to the downside is likely to expose 0.66732, the low of May 2016.
The technicals on the H4 time frame are in support of further bearish move. After a period of consolidation for much of the second and third weeks in April, price action has moved strongly southwards respecting a well-angled trendline (magenta colour) with the MAs well aligned for increased downward momentum. Although the price action in the most recent sessions last week, notably on Friday, showed a period of sideways operation, the descending trendline has not been strongly negated. Nevertheless, price action may make a corrective move before further southward drive.
It is important to emphasize that the ‘weekly technical outlook’ on this thread represents a perspective based on technical analysis to identify the potential scenarios that could favour short-term swing or trend trading. Entering the market in the direction of any bias will depend on price action and market conditions satisfying specific criteria a trader may be using. No trader who wants long-term success would enter a market without using some checklists and a trade plan.
Although the pair has been on a decline overall, on the weekly time frame price action since February 2016 has been within a 550-pip range (bounded in saddlebrown coloured-horizontal lines). After a northward push in January 2017, price action consolidated at the upper half of the range for the next eight weeks. This region has held as both a support zone and a resistance zone in the past. The first week in April saw a relatively large bearish candlestick breaking below the upper half of the range but lacked follow-through; it was followed by three weeks of sideways move. Last week, a bearish candlestick breached the sideways mode; a strong break below this may lead to a role flip of the zone, turning it into a resistance zone for further bearish move. Such a move may initially target 0.72920, the immediate weekly support and then expose 0.71707, the support of the range.
On the H4 time frame, the most recent price action saw the buyers pushing price upward. However, any upward push is likely to be corrective; much likely to target the immediate resistance zone which adjoins the monthly pivot and the 50/61.2 Fib zone from the high of April 2017 and the low of last week (magenta coloured horizontal lines). Overall, however, the order flow context shows a preeminence of sellers and the technicals on the H4 time frame are in support of further bearish move.
Since June 2015 the pair has been in a descending mode. On the weekly time frame, price action has been operating in a descending channel (purple coloured lines) since June 2015. In the third week of April 2017, price broke the resistance line of the descending channel to the upside. Last week’s candlestick was relatively bullish and took the price towards the immediate resistance zone around 1.49724. Price action has pulled away from an outer ascending trendline from the low of April 2012 and is respecting an inner ascending trendline (orangered colour), indicating an increase in momentum.
On the H4 time frame, price action is respecting an inner ascending trendline (magenta colour) but the momentum seems to be weakening with the most recent candlesticks bearish in disposition. Given the fact that this occurred near a weekly resistance zone, there may be a retracement to the downside before any further bullish push. This pullback may be to the region of the previous swing high, which adjoins an S/R area on the H4 time frame and the 32.8 Fib zone from the low of April 2017 to the most recent high; mapped in saddlebrown coloured horizontal lines.
Price action since Monday has been on a descent and nearing a most likely reaction (support) zone - identified on Sunday (bound in Saddlebrown coloured horizontal lines) - before any further possible upward move.
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The pair has continued on the decline but the momentum decreased last week. On the weekly time frame, a spinning-top like bearish candlestick was formed, indicating a lack of follow-through of the bearish move initiated three weeks ago. It may take this week’s price action for market to give clear direction as the buyers are still very much in the fray. The technicals on the weekly time frame indicate a slow down in momentum and a period of sideways operation may set in before momentum picks up.
On the daily time frame, the buyers took control of price action in the middle of last week and the technicals on the daily time frame indicate that a further push upwards is likely to be in the offing. For example, the MAs I prefer to use are no longer aligned for bearish momentum and the RSI sloped slightly to the upside. Thus, even though the main market direction is southwards, we may expect either a period of consolidation or a retracement first before the southward move resumes, particularly as current price action is near a weekly resistance zone land marked by 0.72920, an area last visited in early January. A much likely target of any retracement of price action northwards is the immediate minor resistance zone around 0.74539 and 0.74800, which adjoins the 50/61.2 Fib zone of the most recent swing low.
Alternative technical biases
Main direction: southwards, particularly should price action break below 0.72920
Short-term disposition: consolidation around price location or northward retracement to around 0.74539 and 0.74800.
As noted on this thread three weeks ago (on Sunday April 30, 2017), price action on the pair has been operating in an ascending channel on the weekly time frame since mid-2016. In January and February 2017, price action moved to the lower part of the channel. It surged upwards in the latter part of February 2017 and flagged downwards to the lower part again in March and early part of April. Since the beginning of this month, price action has disposed northwards. On the weekly time frame, the gravestone doji candlestick formed two weeks ago gave way to a northward directional candlestick last week although sellers’ pressure limited its momentum. Presently, price action is operating near a resistance zone which was last visited in February 2016. Should price action breach the zone, it has to contend with the resistance line of the channel very close by. We may expect some sideways operation in this area before the market makes a decision to either reject the channel southwards or breach it to the upside. At any rate, the momentum for an upward movement appears suspect at the moment.
On the daily time frame, price action has breached the resistance of the channel and formed wicky candlesticks at the immediate resistance zone noted on the weekly time frame. The formation of wicky candlesticks indicate a slow down in upward momentum. Although the technicals on the daily time frame favor a northward disposition, a barrier is the minor resistance zone which is less than 55 pips away around 1.38307. On the flip side, should price retrace southwards into the channel, a likely support can be found around 1.35838, which adjoins the 38.2 Fib level of the most recent swing high from the low of April 13.
Alternative technical biases
Main direction: northwards, particularly should price action break above 1.38307
Short-term disposition: southwards, likely retracement from within the zone of current price location to around 1.35838
