Professional FX Strategies by DDMARKETS

Commercial Content Analysts
1

As this is our first post would first like to thank Babypips for allowing us to provide our insights on the market in the forum. As opposed to standard market reviews or analysis we will focus on the future trend rather than reviewing historic price movements of a given instrument or focus our attention on market events that already took place.

The strategy, either technical or fundamental is designed for online traders. We may also provide some trading strategies for gold and crude oil (brent and nymex) but mainly focus on FX currency pairs and crosses.

Fed Rate Hike Impact

While this is less relevant to our trading strategies it is still an important to note. As you may already know, the Fed hiked rates in its last monetary policy meeting (as expected) with a possibility for another rate hike to take place this year.

The rate hike by the Fed will alter the market conditions in the market. These changes, particularly in the currency correlations are likely to affect numerous trading strategies. It is difficult to determine which type of technical strategies will be affected but the changes will take place within the next 14 days.

Expert Advisers or EA’s are likely to experience unusual volatility in their performance and begin to malfunction. The EA developer will require to adjust to the new market conditions, which may be a great struggle. Aside the Fed rate hike the brexit negotiations are set to commence on 19 June despite suggestions it they will be delayed due to the outcome of the UK elections. Theresa May is expected to partner with DUP and lead the negotiations. The brexit talks may therefore also disrupt the market conditions.

Our suggestion is to have multiple strategies at hand and adjust to the new market conditions when the changes take place.

EURUSD Intraday Strategy

EURUSD 4hr Chart

(as we are new we were not given the required permissions by babypips to upload images, we had to upload the chart to a different site and then link it here. We will contact babypips to resolve the issue).

We have been monitoring the above levels for some time. 1.1285 is they key resistance for EURUSD which has contained the pair on its several attempts to break higher. The recent re-test of 1.1285 which lead to current weakness was triggered by the Fed (rate hike).

EURUSD then breached its initial support level (upper blue line, now acting as resistance), which lead to further weakness to the latter support (lower blue line). The support has been tested and was able to prevent EURUSD from retracing lower.

We may witness a range between the support and resistance line (both in blue) until a breakout takes place.The targets for either breakout (bearish or bullish) are marked on the chart.

It is possible the price may attempt to re-test the support by the daily close, which if materializes suggests the current support may yield to corrective gains in the pair.

Although this may be irrelevant at the time of this writing, a break below 1.1078 (preferably a 4hr close) may pave the way for stronger weakness in EURUSD.

2

We resolved the issues we experienced with babypips. We cannot edit our prior strategy for EURUSD but we can post a full link to the strategy:

3

EURUSD Weekly Outlook

This week we would like to discuss what lead to the recent EURUSD rally and how it may develop. The Fed tied the inflation figures (CPI) to the next rate hike hike. As the US CPI came in below expectations it triggered heavy USD selling.

The US CPI was the key trigger for EURUSD rally. Even if the ECB did not suggest it may be prepared to tighten its monetary policy on Thursday and Trump was able to garner enough votes for his healthcare bill USD would have still been sold.

EURUSD is fundamentally driven and may have caught some traders off guard. From a technical angle we suspect some traders attempted to short EURUSD, being unaware of the market fundamentals and incurred the loss or floating in an open drawdown.

Our members asked us why we chose to avoid shorting USD following the CPI figures. The protective stop must be layered via technical analysis. It required a hefty stop and did not justify the risk regardless of the outcome. We have avoided USD throughout the week.

We have noted there are technical indications that suggest USD may be poised for corrective gains, possibly on profit taking. Our strategy for this week is to simply avoid USD. We are uncertain the rally has ended and until we do see a meaningful retracement EURUSD may be heading for 1.2000.

If you review our prior EURUSD intraday strategy in our thread we did discuss the implications of breaking above the key intraday resistance. The last time we have witnessed EUR being fundamentally driven was in EURCHF many years ago.It is occurring now as central banks are beginning to tighten their monetary policies.

We will publish a new intraday strategy as we have done in EURUSD later this week as we must reserve some of our entries (intraday and swing) for our members. As we are still new here, if possible do subscribe to our thread if you wish to be updated.

4

AUDCHF Intraday Strategy / Signal

To recap, we are avoiding USD as we are unconvinced the weakness has ended despite EURUSD recent correction at the time of this writing.

We would like to provide a brief intraday strategy for AUDCHF.

AUDCHF 60min Chart

Please click on the chart to enlarge:

[Album] Imgur

We are witnessing an hourly breakout in AUDCHF as shown in the chart,. An hourly close above the neckline (in green) may suggest further gains are in store.

The price may re-test the neckline following the breakout but the initial objective of the breakout is seen at 0.7545. Should the price post an hourly close below the neckline the technical entry may be invalidated by the market (we still cannot upload the chart directly in the post, we will contact babypips again).

We tend to refrain from hourly charts in our strategies as it demands swift action from our members but in this forum we find it appropriate.

5

EURUSD Strategy & Signal

It has been a while since we provided new signals and strategies in our thread. The Fed;s rate hike last week may have a significant impact on Euro Dollar in the FX markets. Due to the interest rate differences EURUSD volatility may increase over time.

The nee tariffs President Trump imposed on China did trigger some volatility although it was mainly seen in commodities such as crude oil and gold.

Our trading signal and strategy for today is EURUSD, 60min chart.

The above is a classic breakout strategy. An hourly close above 1.1625 may pave the way for stronger gains towards 1.1655. Upon a breakout the price may re-test 1.1625 before correcting higher. The technical signal is relevant as long as EURUSD does not break below 1.1595.

We should highlight that in our forex signals for our members we focus on longer time frames and strive to capitalize over a larger price movement.

6

EURGBP strategy, how to estimate when GBP strength will end?

GBP strengthened against a basket of currencies following the Manufacturing PMI figures. As many new forex traders are active on babypips, this is how we begin estimating the potential price levels for GBP corrective weakness.

We focus on EURGBP in our technical setup. Intraday time frames are often preferred in such scenarios, we are therefore using the 4hr chart.

eurgbp 4hr chart 2023
eurgbp 4hr chart 2023887×498 115 KB

EURGBP is testing a potential 4hr support at 0.8798. To affirm a potential retracement, the price may require closing above the support at the 4hr close.

In an event the support gives way at the 4hr close, the next potential support lies at 0.8775 (are are only focusing on when GBP strength may end in the strategy).

Similar to 0.8798. the price requires reaching 0.8775 and holding above at the next 4hr close.

For the potential take profit, we are using the former support (in green, currently acting as resistance). Mastering support and resistance levels is essential.

7

AUDUSD Intraday Strategy
OPEC’s decision to cut crude oil output contributed to some gains in crude oil. Strong gains in crude oil may very will sustain or increase inflation figures.

It is a problem for central banks that aim to curb inflation by rate hikes. The RBA and RBNZ monetary policies will be closely monitored.

audusd 60min chart - ddmarkets
audusd 60min chart - ddmarkets812×445 36.7 KB

The intraday strategy is fairly straightforward. An hourly close above the resistance (in blue) is required. A re-test of the breached resistance (now acting as support) must take place, preferably within the following 60min close.

Once the support is re-tested and holds, it may pave the way for stronger gains in AUDUSD.

Initiating a long trade at current levels is a risky maneuverer as some profit-taking may materialize. A re-test of the support may provide a firmer indication a resumption of the uptrend is due.