This pair moved on well since the reasons for a bullish rebound posted.
H4 chart here with the reasons marked with arrows. Retracement levels natural targets here. I’m looking for 114.
XAUUSD price got rejected at 1218-1220 yet again. Clues explained before continue to hold. And this time got added with a bearish pin bar, bearish divergence on stoch and a bearish crossover on MACD.
Another note is that it is below the 5 DMA now. I think this could be a key point now 1209-1210. It seems to have just lost inherent strength altogether and probably is now at the mercy of dollar’s movement. Bulls don’t seem to be interested here till it clears the 1222 level, where the Daily R2 has been hovering around for sometime.
1205-1220 was the zone I was looking at where a topping process could be formulating and the price managed to hold itself inside it yesterday. There’s a supporting TL from 1150 too here, that has been supporting price since 02-03 Jan.
So this zone is becoming a range now and could also possibly make the pair directionless for a few days, of course unless a break-out happens either way.
H4 chart here.
Have come out of this piplock arrangement by closing the long position opened yesterday. Short position continues.
Some observations on the daily chart leading to this decision.
Daily chart here.
I looked up the price level where the retracement post the major Brexit fall got rejected. It got broken earlier this month. Plus the daily candle failed to close above it yesterday and may end up creating a bearish pin bar today. Only time will tell.
Coming out of the insurance position today, the price has almost fully retraced to the highs of current month.
Will monitor price action for now.
A lone holiday for Australia in the middle of a trade week and a truncated week of sorts for me!!
A quick catch-up on what’s been happening on my trading desk. Not posting separate posts now as am lagging behind on time for the journal vis-a-vis trade calls taken in the last 2 days.
[B]USDJPY[/B]
Closed my long dollar positions too early, in hindsight. Everyone is talking about the double bottom, but am skeptic of dollar running away to 118-120 from here. Big data releases today with US GDP scheduled. Am positioning myself with buying yen, some of the macro news wires doesn’t seem to be in sync with an outright dollar upside move. Momentum and bids have come in higher TF’s, notably H4 where the RSI bullish divergence I had talked about played out well; so all traders who have held on to their long positions from 112.70 hit a nice jackpot!!
[B]GBPJPY[/B]
Same case as buying yen here.
[B]DAX30[/B]
Positions in progress here are in loss right now. But too much euphoria out here due to America’s 20k dream!! Lot of ground to cover for a drop till its trendlines on higher TF’s.
[B]XAUUSD[/B]
Profited from the drop as per my targets, but now I’ll be slowly nibbling into this pair.
A potential bullish divergence on RSI + near term base on RSI could be setting up on H4. 1200-1202 a possible target.
This idea moved one well, with the price giving a nice move to high 1190’s before waiting for a thought.
Chart conditions still continue to be favorable on H4, however caution is to be exercised due to BOJ event risk today.
So it is likely today that price of this pair might looks for direction based on how dollar moves, and how much of a follow-on risk-off sentiments trickles into the Asian session this morning.
Some favorable trades closed from the ideas and my positioning I had posted last week. My positioning of buying yen against the greenback and sterling worked well.
There were technical reasons on charts towards that expectation, however, the debacle in USDJPY and GBPJPY was quicker than I had expected.
Key things to note here.
USDJPY
Not able to break out higher off 115.50. The bullish divergence on RSI that propelled the move from 112.70 got negated yesterday as well, with leading and lagging indicators turning lower - such was the abysmal drop yesterday on higher TF’s.
So I guess, over to BOJ for now, but I’d think buyers are in a fix - don’t see a non-scalp long entry is going to be meaningful at current levels.
GBPJPY
This one got a double whammy yesterday with both, GJ and UJ, . Eeks!!!
I’ll share a small portion of my H4 chart here.
TL#2 are trend lines on H4 itself, while TL#1 is from the weekly chart. Yesterday’s nose-dive brought the price back below TL#1. Could be the key for now.
Overall, I’ve reduced exposure in some yen positions and DAX because of event risk from BOJ today.
Potential signs for a rebound in H1 chart.
A possible double bottom for now and an attempt to rise till the weekly TL from highs at 148 level or near the 61.8% retracement of hte fall from yesterday.
As I write here, the current H1 candle seems to have taken a tumble, so it is to be monitored before this idea could take shape.
I had opened a long position in this pair yesterday based on the idea posted above. However, didn’t start well, as Pound decided to test lower levels just then.
That was a quite a few 2-3 hours yesterday, that perhaps shook a lot of positions in Cable. Equally stunning was its V-shaped reversal.
That factored into GJ’s price so hopefully, Dollar was holding steady at that time against the Yen.
Nevertheless, since my long entry, the pair’s downward drop hasn’t been able to change course of the tech indicators, they are still pretty bullish and should take the pair higher.
So sticking to this position for today.
H1 chart here.
My expectation from UJ been bearish for the month of January, though I’ve capitalized from some long trades when it was stuck in a range.
In fact, my first post in my journal earlier this month was with the idea of selling the Greenback against the Yen, and was my first sell order on this pair at 116 levels.
Key note here is that my expectation of the pair reaching the 38% Fib level of 112.10 had played out yesterday, as expected. So am glad with that 
I had manually closed my short positions in this pair from yesterday at 113 levels, expecting a rebound till 114 before the final drop to sub 113. But, the rebound never came and I had to sit on the fence for that last major drop till lower 112’s.
Long positions have been opened now from lower 112’s with a structural bullish view for the pair, though may close positions if trade/eco conditions change. (As I read somewhere yesterday a Japanese offical mentioning this pair’s price at 100 is OK for Japan :o I don’t mind though. Helps my budget for the 2019 Rugby WC :57: Would be great if AUDJPY touches 100 too :D)
Sterling moved up well yesterday, putting my long position in the green.
I had opened the position citing reasons on the H1 chart, but the trajectory of the upside has made the price action on H4 constructive as well, notably the support off the Ichi cloud and I see this morning a bullish MACD cross-over.
However, a huge clue could be in its weekly chart, with respect to the TL I had mentioned in some of my previous posts. How this pair ends this week could be a key thing to note.
Here is the weekly chart.
Last week, price broke out through the TL on the upside. This week, the retracement rebounded sharply and the price is well above the TL at the time of writing.
There’s event risk today for this pair from the BOE today, but I’d keenly monitoring this week’s closing as that could open interesting levels to the upside.
Still holding my long positions in this pair.
Key things that I’d note in sequence.
[ol]
[li]The sharp drop in price earlier this week sliced through the supporting TL, both for price and RSI. Additionally, the Ichi cloud for the price.
[/li][li]Since then, rebounds have been capped by the cloud for the price and TL for the RSI. Till now, rebound has been rejected twice at the TL for RSI.
[/li][li]For price action and support levels, firstly 112.1 held and the long tail of the candle indicates a sharp rebound. Follow up price action confirms that 112.1 is now the line in the sand for the bulls for medium term. Secondly, drop around FOMC yesterday kept safe 112.60/65 level (112.60 was my stop loss set pre FOMC). Now this could be the key, to be confirmed by follow up price action today though; key because this maintained the bullish RSI setup in H4, inspite of the price being stuck in a 112.30-115.30 300 pip range since middle of January.
[/li][li]H4 MACD could provide further clues as well, so to be monitored today.
[/li][/ol]
H4 chart here.
I’m in a bit of a slow-mo mode now with scribbling here about my trades. Upgrading my IT infrastructure this week and working on the January monthly stat check simultaneously, so et al is creating a time warp between trades taken and any posting about them.
So perhaps will just update my trade summary every morning till EOTW and kick-start afresh next week.
Overall, am positioning myself with buying dollar, with focus on 2 pairs - USDJPY and GBPJPY. That’s the theme am gonna participate in from this month. Got lofty targets in each of them.
Index positions, again as per opportunities, e.g. DAX30 and ASX200 open right now.
I’ll share all details in trade summary irrespective of gain/loss.
Trades are being taken when opportunities come by, but posting may not be real-time.
Attached is a link to a simple document, which compiles my trade data from the month of January 2017.
Monthly Stat Check | January 2017
Can’t attach more than 5 images here, so tagging some images, similar as the Weekly Stat Check posts, directly in this post.
Other images and some write-up is available in the document.
No deals in forex for week ending 10-Feb-2017.
Fair bit of scribbling to do here today, as there is a huge lag between trades taken and posting of the idea here. Thankfully, could get time to update the Trade Summary every morning, so as not to lose track myself, of what’s going on with my trading journey.
At the start of February, I had posted ideas about being short on JPY, through 2 pairs - USDJPY and GBPJPY. And that is the fundamental theme of my positioning this month, and going forward H1CY17 to quite an extent. I knew I would be busy this month with travels and events, so bias was to enter at good support levels and let the positions be held for a period of time, unlike January when I was pretty much grabbing every sort of move ranging from 30-150 pips. So that’s the overall adjustment for me this month.
Alrighty, I’ll list down my open trades bottom-up at the moment, and share my thoughts on them.
[ol]
[li][B]Sell DAX30[/B]
[/li]This position has been lingering for a while in my list now. Reasons - Lower leveraged holding + success of other trades making up for the daily running losses here, including hedges in same index. To me, DAX just forgot somewhere down the line, that the lucrativeness of ECB’s dovishness has been diminishing for some time now; and living off scraps from America’s 20k dream can only result in unsustainable heights, as we are not yet sure of the realistic outcomes of such dreams. So for equities, am erring on the side of caution. I’m not a fan of equity moves based on printed money, but a rather strong believer of growth based on operational performance, when it comes to companies. And my simplest understanding of equity indices says, it’s a basket of companies, so buying this basket makes me happy only if it’s flowers aren’t stale. I agree, technical charts might point to strong supporting trend(s), but when uncertainty of risk elements (P.S.: French election, Greece as well) isn’t completely settled, I’m preferring to take a cautious stance here.
[li][B]Sell XAUUSD[/B]
[/li]Funny story for this month, Dollar is up, S&P is up, and traders are buying Gold too. First one has facts behind it, second one has whims behind it, but the third one seems to be just riding along, based on BTD in tech charts. I think the trading fraternity is playing with a bit of risk here. With Fed fund futures pricing a hike in March at 46% now, I’ll not be buying here.
[li][B]Buy USDJPY[/B]
[/li]Facts in figures, faith in words and confidence in Yellen’s understanding of not letting things go out of control again. Staying long dollar.
[li][B]Buy GBPJPY[/B]
[/li]About 2 weeks back, I had posted an idea for this trade with a snap of the weekly chart. Since then, the weekly chart has been treading along well and been holding this pair with decent support. Risks remain from Article 51 stories from UK, so that may factor into holdings.
[li][B]Sell ASX200[/B]
[/li]With the situation surrounding possible Fed hike in March, positioning bearish here. H4 has some bearish divergences at the moment as well.
[li][B]Sell US500[/B]
[/li]With the situation surrounding possible Fed hike in March, positioning bearish here. H4 RSI has a possible triple top formation. Not keen too much on Trump’s “phenomenal” scenarios.
[/ol]
A couple of possibilities came to my observation, as I looked at the H4 and D1 charts of this pair now.
H4 chart first.
Possibility 1:
I’ve drawn an arrow at the current H4 candle of my chart. This is the first possibility, where a hammer could be in the formation, resulting in a reversal in price. Additional supporting factors lie at the other arrow, that I’ve drawn at the current RSI level. It has turned higher near the level, from where price launched last at sub 113 levels off Jan lows. Another supporting factor is the Ichi cloud. If this turns out, would also give a higher low on both, price and RSI, giving bulls some respite from the fall yesterday.
Possibility 2:
A possible inverted HnS in play, starting from middle of January, off the 115.3 mark. I’ve drawn the firm lines of the potential pattern that prices have mapped out already, and broken lines for the ‘potential’ part of the pattern, if it pans out. In this case, 112.5 is the level to watch out for the right shoulder.
I reckon this could be where smart money is in, with loads of pending bids at 112.5 levels. Happens to be my M/T long entry as well :rolleyes:
H4 chart below.
Clue 1
I looked for clues in the daily chart, for which possibility may have a better probability.
Have drawn some arrows and horizontal lines. The top horizontal line is the one to note. Since June 2016. that line on RSI has been acting as a good line in the sand, with the gigantic rocket launch in price from 102-103 coming off it as well at end of last year. Current RSI level could be forming a double bottom above the same line, before rising higher with price. RSI had a rising channel as well from June '16 till Nov '16, before dropping as price cooled off around 600-650 pips YTD. But from the 111.5 lows, we could as well be in the middle of another rising channel in RSI.
D1 chart below.
Clue 2
A fundamental one. Possible bullish bets on rate hike hopes next month.