According to my analysis, I believe the potential high for today could be around 1.2615-30. Lets see if my prediction is accurate.
Price now at 0725GMT is 1.2565.
It would be good to take some of your profits on your long positions at this price. And move up your trailing stops.
I will share on friday why i make this prediction to call the top.
I believe the current uptrend for this week is just a retracement. In the larger view of time, the overall trend for EURUSD is still bearish. The debt crisis is still unsolved. Greece, Spain and Italy are in a mess. The yields for their 10 year bonds are extremely high, which reflect the market’s non-confidence in their economy. All in all the euro-zone is fundamentally weak.
Look at my chart. We are about to hit a long term resistance at the downtrend channel line for the 4th time. What are the chances of EURUSD breaking out of this down trend? I do not know. But i believe plenty of long term traders are placing their sell orders right around point 4. Watch the price action at this critical junction.
I am still holding onto a small percentage of my long position from 1.2270. However, i have tighten up my trailing stop. As i believe the upside is limited for EURUSD.
Slightly frustrating week for me on the AUDUSD. It has not been trending and is moving in a yo-yo manner. Up down up down. The yo-yo movement is clearly evident on the 1 hour chart. It is hard to trade when prices move like roller coasters, up one moment, down the other moment.
On the daily chart, i do see a wave 4 on the Elliott Wave Count. According to Elliott Wave theory, wave 4’s are especially prone to exhibit choppy behaviours. This might explain why we are seeing the yo-yo pattern on the 1 hour chart.
Some technical traders love Elliott Wave. Others dismiss it as mumbo-jumbo hocus pocus. To each their own. Elliott Wave requires constant adjusting of the wave count. Therefore i only use Elliott Wave on my daily and weekly charts. And i will only use it when necessary and when i see a clear wave count. I will post a daily chart to show the Elliott Wave Count soon.
One of my best weeks trading GBPUSD. My bias for GBPUSD was on the bullish side. And i was expecting GBPUSD to finally break above the 1.5780-1.5800 pivot zone by this week. I woke up at 5am on monday morning to trade the monday opening! Why my bullish view? See daily chart below. What do we see on the daily chart?
The price action is telling us that the buyers are stronger than the sellers. Each time the price drops to a lower level, there are strong demand. And the buyers buy up and push up the price.
Here are my trading results for GBPUSD. This is one key to successful trading. Always keep your losses small or at breakeven, always let your profits run. Trading is a mind game.
Finally a breakout on GBPUSD!! This 1.5780-5800 resistance zone has been a major pivotal point since Nov 2011. Will the bulls be able to hold onto their victory? I am cheering for the bulls this week.
If price retraces to re-test the 1.5780-5800 level, i am expecting strong demand to appear. The strong demand should push GBPUSD up and continue on its bullish trend.
LONG GBPUSD @ 1.5780-5800
Stop loss below 1.5750
Final target profit 1.6300
AUDUSD is forming a nice Elliott Wave bullish pattern. I believe we are currently in wave 4, which is a corrective or counter-trend wave. One thing about Elliott Wave trading is that the wave counts require constant re-adjusting. To solve this inherent issue, I prefer to use Elliott Wave trading on the daily and weekly charts. And voila! Problem “solved!!”
The daily chart below shows the wave count.
On the 4hr chart, wave 4 is obeying a falling channel. Once price breaks above the falling channel, it should be the start of wave 5. Watch carefully and wait patiently for wave 5. It can a really powerful bullish up move.
Some interesting news. ECB president Mario Draghi decided not to attend the annual Jackson Hole event. This is a premiere event for the central bankers. It is the who’s who list of the monetary policy makers around the globe. Draghi cites “heavy workload” for not going. What work is he working on? What is so important he had to skip this event? Especially when he is originally scheduled for a speech this Saturday.
I think the answer is coming next week on 6th Sept Thursday. Every month ECB will have a press conference. It is broadcast live if you are interested to know. The ECB press conference for September is on the 6th. Most of the time when he speaks, there is usually high volatility on the EURUSD. I think we may see some ultra high volatility for 6th Sept thursday 830pm. Draghi’s track record during the press conference for the past 2 months has been awful for EURUSD. In July, it tanked 170pips!! In August, it cratered 250pips!!
I believe he will finally share more details on ECB’s bond buying program. Which he had subtly alluded to for the past few months. Whether the market accepts and believes in the validity of the bond buying program to solve the Euro Crisis, i am not sure.
Here is my market sentiment analysis. If market is caught by surprise, expect a bullish upmove. However, market may had already anticipated this news and is buying ahead of time. In this case, we may see the classic “buy the rumor and sell the facts” move. This should result in an initial false bullish breakout followed by a sharp downward move.
I have not decided on my game plan for 6th Sept. I shall see the price action for this week and next week to determine my course of action.
What a week we had last friday with Bernanke’s speech at Jackson hole eh? The volatility was extreme, up and down 60pips within minutes.
For this coming week, it is a tough call. I do not know whether to be a bull or bear. The price action is calling for both directions!! Why? Lets begin with the daily chart. The daily charts shows a bearish price action.
On the daily chart, we see:
On the 4hr chart, we see:
So what is the key to this dilemma? I think the key battle may be 1.2650.
Bull traders:
Bear traders:
I present to you my latest findings on the order flow of AUDUSD. Remember that currencies are the lifelines of the global economy. People buy and sell currencies all the time. If i wanted to travel to London to watch the 2012 Olympics, i would change my local currency into British pounds. Which means i would buy GBP and sell SGD. Basic supply and demand.
We individuals do not have the power to move the currencies by 1 pip. So who does? It is the multinational companies such as IBM, Apple, BMW, Samsung and others. Central banks can manipulate their countries’ currencies. But they do it infrequently, although when they do it, it causes huge spikes. Witness BOJ intervening to weaken the YEN in 2011. Look up the daily chart of USDJPY and find the obvious one day spikes. It is the handicraft of Japan’s central bank. Hedge funds can and also shift currencies to a certain extent. But their main aim is speculation and to make profits.
The main factor in currency movement is this. Watch the order flow by the multinational corporations. Every month, whether it is the beginning or the end of each month, they buy and sell currencies. Why? Because they need to settle their monthly accounts. They need to hedge their positions. They need to repatriate their profits. They need to pay their suppliers. They need to collect payment from their customers. Every month, every quarter, every year end, they have to tabulate their profits and losses into their balance sheets. And a host of other reasons.
To illustrate my findings, see the AUDUSD chart. Now locate the places where price makes a major turn. The tops and bottoms are located mostly on the month-end or month-start. It is not a coincidence. It is order-flow.
I hope you understand the importance of order-flow now. Many traders talk on fundamental analysis (FA) and technical analysis (TA) when looking at the markets. I present to you the third analysis, order-flow analysis (OFA). Learn it well and you will become a more successful trader. Trading is a mind game.
Thanks for your analysis!
You are registered since aug 2009, and you dedicate your first post to me!! :60:
This is getting more and more interesting. It is almost like the final episode of a long running soap opera. This week (6th Sept ECB bond buying program unveiled) and maybe next week (12th Sept German court ruling) are the crucial junctures. What prevails over these 2 weeks will determine the ultimate winner.
What am i talking about? I am referring to the king of forex, Mr EURUSD. The daily chart is now at the critical crossroad. For we are at point 4 of a prolonged down trend line. More than 365 days worth of down trend line, to be exact.
All right, ladies and gentlemen. Lay your bets. If you want to go big, this is it. This is the once-in-a-year event. This is what you have been waiting for. If you catch the correct direction, you are rewarded handsomely on your golden path to riches. But when you don’t, then …
I’m speculating a breakout to upside!
Nice, you are right. Huge bullish breakout on friday!!
What a week it is for the EUR bulls!!
Wednesday. The bond buying program was leaked to the markets, which was the reason for the sudden bullish rise. I was short on Wednesday, but luckily got out with some profits.
Thursday. ECB press conference. Markets initial reaction was a bearish 80pips drop, followed by a dramatic 80pips bullish recovery 2 hours later.
Friday. A +175pips bullish upmove in 1 day. It is been a loooonnggg time since we have witness such strength in a single day. I presume the august summer holidays for the European and American traders are over?? I am not sure, as i am from Asia and there are no summer holidays here. We are definitely in for more volatility soon. And the market is ready to trend big from this month onwards until early December.
My trading results for GBPUSD was less ideal than EURUSD. However, i got out with small to slightly moderate losses.
The key to maintaining small losses is to discipline oneself to keep stop losses small. If there is a holy grail to trading, i guess this is the golden rule. Get out with a small loss and try again later. Good that my small losses here are covered by the huge win in EURUSD.
After last week’s decisive bullish breakout, EURO seems to be on a bullish train. I am expecting EURUSD to do a possible re-test of the pivotal zone 1.2620-50. If price do touch 1.2620-50, it is a good area to place your long positions.
If strong demand is present at 1.2620-50, price should target the next resistance zone of 1.3000. This is a trade which i like to take. Low risk of 30-50pips, and high reward of 200-300pips.
Long near 1.2620-50
Stop loss below 1.2600
Final target profit 1.2980-1.3000
Similar to EURUSD, GBPUSD is also confined within the rising channel. Furthermore, there is a whole new large 500pips price area for the market makers to play within. I dubbed it as “the new playground.”
The new playground is from 1.5800-1.6300. Why is this a new playground?
•There is plenty of white empty spaces between 1.5800-1.6300.
•Prices has not been seen in this area for a long time.
•Like water, prices follow the path of least resistance. And the path is between 1.5800-1.6300.
•Market makers may want to fight it out here and establish their new supports and resistances within this zone.
As long as price remains within the rising channel, we should expect a re-test of 1.6300.
Spotted a good opportunity to place a long AUDUSD trade. If AUDUSD touches and holds onto the 3rd point of the rising channel, look to go long.
I gave a live call to short EURUSD on Friday. Click on link. This trade turns out to be a loss. EURUSD slices through this resistance zone like a sashimi knife. The bulls are firmly in control this week after Wednesday German court approval on ECB bond buying and Thursday FED QE3.
Forex Mind Games: LIVE TRADING CALLS - SHORT EURUSD
However, there is one important rule i wish to share. When this trade went wrong, i got out with a small loss of -35pips. I am immune to tiny losses. Tiny losses do not bother me anymore.
In the beginning of my trading career, i would not acknowledge my losses. I would not cut my losses. I would wail, cry, pray, play pretend for my losses to magically disappear. I remember this rule. The only way for any losses to disappear is to use your stop losses. The only way for any losses to be gone is to cut it when it is wrong.
Trading is a mind game. Train your mind to accept small losses.
