Making a compelling case on H1 for entering long.
I did take this trade as the price broke above the 200ema on M5. Insurance for this dragon was done with a short trade in GBPUSD (closed, details in Trade Summary), because UJ was showing signs of intra-day reversal. And to me, at the moment, GBP is the easiest punching bag against the greenback.
Ok so the mighty Gold finally decided to reverse, and selected 1204 (38% Fib of drop from 1330) for that.
The rise of this pair been noteworthy on the daily chart and so it could throw doors open for a larger pullback.
Let’s look at the H4 chart.
A shooting star occurred after the rejection from 1204 levels yesterday and could potentially signal formation of intermediate top at that level.
I’ll be looking to sell this pair into any intraday rise today, with a target of 1177-78 (that’s the 38% Fib of the rise from 1120-25.)
I had executed this trade idea yesterday, and closed the trade yesterday itself.
But a look at H1 right now makes a conclusive case for the trade to have been held longer, in retrospect. So traders who held onto this trade till today have got a greater than 1% return.
That’s fantastic!!
I preferred to escape through the intraday route :rolleyes: 5708 isn’t far away as well!!
Here’s the H1 chart at current levels, where price is testing the first of 2 TL’s I wrote about yesterday.
Yesterday, I entered the hedge, and have now exited this morning after having a look at the daily chart.
So no UJ positions held at the moment; the 200 pip-lock hedge was a sound decision near lows of yesterday.
The daily chart indicates a high possibility of price reversing higher above 115 if bulls can affirm their position from the lows yesterday. yesterday’s candle turned out to be a hammer and ended much higher above the descending TL. Follow up buying today has been pretty good and with good volume.
So caution warranted and hence time for me to exit.
The shooting star got followed by further selling. Price has broken below the contours of the ascending wedge, that it broke out of yesterday. Momentum with sellers now with 23.6% Fib at 1187-88 being the next immediate support to look out for.
Strength in USDJPY also aiding the drop.
Updated H4 chart here.
A look at the H4 chart after end of all sessions.
Immediate support at 1187-88 held yesterday and the price rebounded well from that level. However, the price remains capped by the descending TL from 1204-07 highs. Yesterday’s daily candle points to indecision, mostly with not many clues coming out USDJPY either, post release of US retail sales data.
I think next week, while this pair would look for clues in USDJPY and any macro based risk-off events popping out, a price correction could be due in the ongoing short term uptrend and any such correction could lend to a fall to the 38% FIb of the rise from 1120-25 or the ascending TL from 1135.
I had placed this idea in my order list before start of American session yesterday.
A pip lock hedged trade idea on this pair based on H4 chart, in order to capitalize on the US retails sales data release.
The buy order got executed, and the sell order is still open.
Needless to say, the price has been contained in a falling channel in the first 2 weeks of 2017.
But more interesting is to note that since 30.12.2016 and including this date, all Friday’s have seen H4 candles test the lower TL of the channel, create a bottom and then unleash a bullish engulfing candle, leading to a rise till the upper TL of the channel.
So is this behavior gonna strike a hat-trick next week? That’s what am betting on.
The caveat is not every past event can turn out to be a successful precedent. So while the target of the long position in this piplock trade is set at 116.87, the pre-Trump speech high, I have kept the sell order at 115.93 to lock gains if price decides to return from the upper TL of the channel.
Next week, US CPI release is scheduled, followed by 2 speeches by Yellen. With jobs numbers not a massacre post the hike in Dec '16, I think this pair would like to hold on till these events for clues before the next major move.
An look at the H4 chart for this pair.
Since execution of my sell order last week, price has been grazing along the the upper TL of the rising channel it carved out, since breaking out of the ascending wedge last week. Another attempt to break out of the channel got thwarted near 1207 levels and the price is now back in the channel.
Also, bearish divergence on RSI and Stoch to be noted.
Short positions held with same target as mentioned in my original post, and another short position opened now at 1203.
Intraday target for shorts from 1203 could be 1197.70-1198.
A look at the H4 chart for this pair.
A possible double bottom inside the falling channel. Positive divergence on RSI (sorry, this one not clear on the chart).
Holding on my long positions from last week. Moved the hedge sell order to 116.80
Fresh macro concerns concerning the Australian banking sector were released by Fitch yesterday.
The release can be viewed here -> Fitch: Rising Risks for Australian Banks Turn 2017 Outlook Negative
This could push the brakes on the ASX200 in the near term, as it affects the biggest sector of the index by weightings, as displayed in the graphic below.
All major banks listed in the index have seen their prices drop in the previous 3-5 sessions, which also led to drop in ASX from 5800 to 5708, that I had written about in one of my previous ideas on this index. Though the basis of that call last week was purely technical, now this fundamental piece of news can add fuel and keep the index subdued for the rest of this month.
Additionally, any notable drop in global indices could also add extra damage.
A look at H1 chart indicates some technical pain points too, that have arisen since the daily ~1% drop that occurred last week. While 5708 held as support as per 38% retracement of the rise from 5510, the rebound could as well turn out to be shallow, as it still remains contained by the strong resistance line from the highs above 5800.
A look at the chart here.
Additionally, there is a potential HnS pattern that could play out on the RSI, limiting the extent of any upward movement. The right shoulder could be in the making in tomorrow’s session and is to be monitored.
5760 looks like a strong resistance on H1. However, a break of the shallow TL from 5708 could also take the index to 5685 or open doors to a test of the lower TL from 5156. This lower TL should act as strong support as it has been supporting the price since Nov '16.
Therefore, some potential sell trade ideas come up, with potential entries at 5755-5760 for targets 5730-5708-5685.
This idea would be invalidated if the price breaks out of the resistance line from 5800+ highs conclusively.
ASX200 not looking good this morning. Sold right from the opening bell.
As expected, the financials are leading the index down.
The current H1 chart speaks for itself. The HnS pattern on RSI played out.
Flat on the H4 chart since European session yesterday. Still trying to hold on to 114 , but any rise isn’t gaining traction.
The supporting TL on RSI since price touching 113.70 last week got broken in the last couple of hours, so this pair could be at a crucial juncture here. Strength in Gold and Euro isn’t helping dollar bulls either. RSI positive divergence play can still be argued with, but in the absence of follow up higher lows in price, weakness could persist.
From the point of positioning, nothing much to take away in this 30-40 pip range from 113.80 to 114.20, that the price is stuck in. Support zone near 114 still intact, so am holding on to my long position, while looking at options of hedge if price breaks below this range.
Still the same action and movement in XAUUSD on the H4 chart here.
Price clinging on to the upper end of the rising channel, tight range in the last 12 hours or so.
This is like Gold and Dollar playing a game of “Who’ll bell the cat?” between themselves.
I have booked losses partially on held long positions at 113.63 as it broke below 116.80
Strong breakout above the rising channel, so losses booked on some of the short positions at 1209.
Trapped in a triangle in the H4 chart. A break higher could give opportunity for a long position with decent RR.
Could be a bit of a juggle on reaction to GBP pairs today, post the CPI release and with the Brexit talks going on behind the scenes.
My buy order got executed at the zone above the break-out. Updated H4 chart below.
Stunning 1 4H candle that did the job for the 200 pip target that I had kept for the trade. Thankfully, helped to cover losses booked from the long dollar and short gold.
Another highly volatile day, another back breaking day at my terminal all night.
For me, yesterday’s orientation of trading was 2 fold -> curb losses in positions from last week by hedge and pounce on any opportunity that comes to sight. The 2 fold action was primarily targeted intraday as I’ve decided to keep my long position in USDJPY and short position in XAUUSD intact, that is not close all those contracts with loss.
This decision is on a structural note, and could be exposed to near term hiccups.
Curb Losses
I had scribbled yesterday about partial booking of losses on long USDJPY and short XAUUSD positions from last week. Reason --> I was not at home that time and was gonna monitor markets on phone for 3-4 hours during that period in the European session yesterday. So preferred to keep exposure light as charts do not look too glorious on phone, so there was no point breaking my head over possible hedges. Instead was better to accept some loss and sit on the fence.
After returning home, hedges in these 2 pairs kicked in. I’ll not write all of them here or mention charts as these were in yesterday’s sessions; they can be noted from trade summary later, if anyone is interested. Idea was not to open a hedge for short term, but to keep nibbling at possibilities.
Another factor that helped curb losses was the drop in equities, which reduced losses on my held short position in DAX30.
Identify Opportunity
I must admit, this helped a lot. Especially the long GBPJPY trade. Other trade opportunities executed were long USDJPY, short XAUUSD and long DAX30. Oh and the short ASX200 was a successful trade closed too, though not for the quantum, that I had expected when posting the idea.
I’m entering the Asian session today with long USDJPY, short XAUUSD and short DAX30 positions. No hedges open at the moment and no pending orders.
Some thoughts on charts below.
USDJPY
H4 chart here.
It’s a no-brainer that sentiment has turned very bearish on this pair technically. The current H4 candle is off the descending wedge, which is not good either. But there is a descending wedge on the RSI too, which hasn’t been broken yet. So it is possible that the price rebounds to test the wedge again, making the RSI turn up for a possible move to the upper channel inside its wedge.
That’s what I’ll be monitoring in the next few hours.
XAUUSD
H4 chart here.
H4 could be likely exhausted. Trapped in a triangle and a possible bearish divergence on RSI. Also, the lower end of daily Ichi cloud has been reached. Factors that I’d be monitoring in the next few hours. A drop to 1205 could be in the offing. But have to wait for confirmation on charts.
