The Dollar Index isnt giving up yet. Seems like she will test the hi of the 4 hour chart again allowing the GU to decline at least a little more after the 50% pullback it generated yesterday. We could possibly drift all the way down to the 1.5500 level this evening.The GU 4 hour chart is definately showing signs of further decline although we do have the lower trendline to contend with. Once (if) price gets thru the TL, it shouldnt have much of a problem heading for the 1.5500 level. But for now, the trendline is key support. We also have a nice bear flag on this 4 hour GU chart so we will keep an eye on that. Shoud the price bounce from the trendline, we will look for a decent pull back for another entry short.
So far, the GU has given us some very nice pips. See h4 chart. As expected, it broke below the lower trendline and continued down. We were able to book some profits and let the rest run anticipating 1.5500. Of course, we will be watching closely for any changes in the market which may prompt us to exit the position. If you notice the bear flag on the GU 4 hr chart, it actually has a target of about 1.5150. Although, as we all know, nothing moves in a straigh line and that is why we lock in pips as we get them. Its very possible for the pair to retrace and test the trend line before finishing out the pattern. if that should happen, I will book the rest of the profits and look for another entry around the TL test.
Just as expected, we took some nice profits on the GU before the bounce ALL THE WAY back to the 4 hour trendline. We then took a short scalp and booked some pips and called it a day. I will wait and see what this evenings close brings and possibly enter another position. Its pretty tempting to go short again here but I will sit out for now as I have seen time and again the price become very unstable at this time in the NY session. One thing we can ALMOST ALWAYS count on is a TL test. That being said, I am keeping my eye on the daily close as we could very well have a close under the daily TL for yet another short. Although…a daily close inside the tl may provoke me to go long for a test of the upper trendline.And THAT (position of the daily TL) is EXACTLY what is keeping me out of another short at this particular moment.
Seems the analysts were caught off guard today after the Fed raised the discount rate from 0.5 to 0.75 AFTER MARKET HOURS…hmmm. In my humble opinion, this could very well prompt the YM to honor its technical levels and begin to possibly sell off. The YM reached its daily 61.8% retracement today and failed to close above it.The DX is headed for its next technical level of 81.96 then 82.49. This should allow a SMALL pullback(if at all) for the GU before another decline to its next technical level of 5300. Below 5390 should get the ball rolling to 5300.
The pair has breached the neck line of the daily head and shoulders pattern and also broken below the bear flag lower trendline bouncing off of the -138.2 and forming a bullish reversal signal. My suspicion is the GU may retrace enough to come close to or even test the bear flag trendline only to reverse there and head down in order to complete the two patterns targeting the 1.4900 area first then the 1.4650 area.
I took a nice long on the gu yesterday hoping to test the daily trendline I mentioned. The price didnt quite make it to the trendline but gave me about 95 pips. The 1 hr has now formed a bear flag and I should be able to get some nice pips out of it once the bear flag comes into play.
Just as expected, I played the bear flag pattern for 100 pips. I decided to take profits and wait for a pull back to possibly enter again aiming for the bear flag target.Its very possible to test the TL before more downside action.
I was able to book some nice pips on the last leg down on the GU on Friday. I had a pretty good week overall.
MONTHLY CHART: We are at a crucial point on the GU monthly chart. If price closes the month above the 5303 area then the GU could begin a nice retracement to the upside. So as I trade Sunday, I will keep that in mind.
Weekly and Daily Charts:
The weekly chart has not yet tested its 23.6 level at 5070 nor has the Daily chart tested the head and shoulders target or the bear flag target. As we are all aware of, the market moves in waves so we must ride those waves. We know that more than likely the targets WILL be met but we must figure out the waves in order to plan our entries. The daily closed friday with a doji so I am anticipating a pullback at least to the 5300 or better level before another wave down.
Now, we MUST pay attention to the possible clues the market gives us. We know the daily closed with a doji indicating indecision and also most likely a bit of a retracement.But how far could the daily retrace? Well, we are NEVER sure since the market is the only entity who knows for sure but we can observe the clues presented to us. So lets take a look at the 15 minute chart which has presented us with an inverse head and shoulders pattern. The target on the inverse of 5340 happens to be the low on Feb 19. Once 5340 was tested on 2/19, the pair rallied over 200 pips only to turn around, head back down and crack the 5340 area. So, in short, using these clues that the market provides will help us to determine OUR next moves in this market. They help us to plan our trades and trade our plan.
Now, we MUST pay attention to the possible clues the market gives us.
I am sure these guys will pay attention. They are called The Real Smart Money:
Pound could collapse [B][U]“within weeks”[/U][/B] warns ex-Soros partner
He says: "In real terms, [U]the pound is already devalued against virtually every currency barring the Zimbabwean dollar[/U] and it is especially exposed over the weeks running up to the UK election.
Pound could collapse “within weeks” warns ex-Soros partner - IFAonline
Those concentrated GBP SHORTS will send the Pound to hell if they have to.
I agree with you about the GBP. It is definately a possibility of GBP tanking. I am also anticipating the DJIA to have a signigicant sell of in the near future.
damn cable!
I’m planning on shorting 1.51 to 1.53 targetting 1.4850 and if that breaks the low 1.40’s.
This is part of my weekly analysis that I give on my blog Forexhabits
Got my fill order at 1.51, currently 1.4960! Totally sweet trade!
I agree Forexhabits. Too much doubt in the Gbp right now. I think it might bounce again to 150s then break the floor
Im watching this one on the 4 hour chart, looks like a double bottom, and possible inverted head and shoulders forming? Im going to see how it opens tomorrow, then probably take a long possition to 50% retracement.
Did anyone manage to catch the movement on this pair yesterday? Will be interesting to hear of others’ experiences & methods…
It was really testing that resistance level all week. Lo and behold on friday it broke it. Ofcourse, as fate would have it, it chose to break it when I was away from my charts, so I couldn’t trade it. But it if is indeed a continuation of an uptrend, I may be able to catching the wave on a retrace.
It looks set to break through a major resistance level, so might be something to keep an eye on.
it close right at the resistance level. So let’s see what happens.