Im traveling most of today for business so I will take a look at it later this evening when I get to my hotel.
No problem , you might want to look at the Monthly for May candle for general direction of the market in future
USDJPY
**Recap**I provided analysis two week ago where I laid out a case to go long on a pullback to the 109 region. There were two ways to trade this, either a more risky zone trade or waiting for a price action setup to go long. Price did reach this zone and then formed a double inside-bar pattern that broke out very strongly to the upside. Looking ahead I will be watching to see if price pulls back to this 109 zone again for a second chance to go long, or if price shoots off in a very bullish manner I will be watching for any pullbacks in price to get long with the overall trend.
BTCUSD
**Watching**Price has had a small bounce off of the bottom of the pennant that I have been discussing for the past few weeks. This is a bearish bias pennant and one that I am watching to go short from. There are 2 potential trade setups to get short, one is simply going short on a break of the bottom of the pennant , which will confirm the pattern. The second option is if price rises to the upper pennant area, to then watch for bearish candle patterns to get short. Some candles to watch for is a bearish pin bar , bearish engulfing bar, inside bar/false break, and double/triple tops, just to name a few.
I also discuss a common newbie trading mistake that you may have found yourself in this past week. Watch this video to see what the newbie mistake is and my advice on how to avoid it.
Good luck and have fun!
EURUSD
**Watching**I mentioned in a EURUSD video analysis 2 weeks ago that we might see price drop a bit further and then reverse back up to potentially form a head and shoulder pattern. That looks to be exactly what the EUR is doing right now and is now only a short distance from a key resistance level where we will be intently watching for trade setups. I will be watching for price reversal signals at this key resistance zone to get short with the overall trend. Due to the relative bearishness over the past month or two my bias is still solidly bearish and any trades I take will be short positions. The only way I may change my bias on this is if price were to break through this key resistance and show continued bullishness. Although that hasn’t happened yet and I will be watching as price reaches this resistance zone for high quality bearish price action candles.
Previous EURUSD analysis will be linked below
Copper / XCUUSD / CL
**Recap/Watching**Copper has taken off from a nice bullish pin bar that had formed off of a key support trend line . This was a near text-book pin bar setups and the types of setups price actions traders should always be watching for. Price blasted off higher from the pin bar and is finally having a little bit of pause from a key resistance zone . When I will be watching for is for price to either fall back to the same support trend line and for another buy signal to form, or if price breaks through key resistance I will then be watching for a pullback to this level (which would have become a support zone ) and then watching for any price action candlestick buy signals to form.
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Gold / XAUUSD / GC
**Potential Setup**I made an about face on my bias of gold yesterday where I flipped from bearish to bullish . This doesn’t mean I am indecisive or have multiple personalities, rather it was due to watching what price was telling me. Don’t ever be afraid to change your opinion of a setup on a dime. Price action and the “price story” is always changing, and thus our bias’ of that instrument could change as well.
The setup we are looking at is a bullish ascending triangle reversal pattern. I entered long yesterday evening (perhaps a little prematurely) but price has continued to show buying strength on each test of the lower portion of the ascending triangle which is what we want to see. Given how price aggressively recovered above the #1 ascending triangle , I think a bullish breakout is likely. Remember folks, likely doesn’t = 100%. Never bet the farm! To trade we need capital, so capital preservation needs to be a top priority. We preserve our capital by not over risking on individual trades.
If you are in this trade or eventually enter on a future buy signal, the nearest term resistance is in the 1355-1360 range. I will personally be dynamically managing my trades and may get out before that level is reached or stay in after price breaks through(assuming this is how it plays out!), but that level is a nice, common sense level for those of you who are more mechanical.
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EURCAD
**Setup**An inside bar/fake-out setup formed in the EURCAD minor pair last week. These types of setups can be very powerful false break signals where large numbers of retail traders were tricked into going one direction and price immediately whips in the other direction, trapping these traders. That can provide strong movement in the other direction as these traders are forced to liquidate losing positions. This setup has already ran up about 100 pips since my entry point and I will be looking to move my mental stop up to break even going into next week, essentially locking in a free trade and attempting to bag my original 3-to-1 RR.
GOLD / GC / XAUUSD
**Potential Setup**In this video I talk about the bearish inside bar fake-out pattern that has formed on the daily charts in the gold futures market. I cover a short educational lesson on the important of market key support and resistance levels ahead of time. Finally I cover some potential entry / stop loss / profit taking levels for short sellers.
EURUSD
**Watching**In this video I talk about the potential of a setup in the key resistance area of 1.18 to 1.185 price zone if a bearish candlestick pattern forms in this area. This would off a very nice, with-the-trend, short selling setup.
GBPUSD
**Potential Setup**The British Pound has had a wild ride in the last 24 hours with major volatility inducing events. That volatility has caused a downside break of the long running bullish trend , with a failed retake of the trend. Upon attempting to retake the channel price has failed to retake the trend support and has also formed a small bearish pin bar and continues to hug the bottom of the trend as resistance. If price continues to be unable to retake the bottom of the channel we could see price fall sharply lower. A tight stop loss could be employed somewhere above the bottom of the channel, in case price were to reclaim the channel support. This offers a very compelling risk/reward setup on the short side.
Bitcoin / BTCUSD
**Potential Setup**My accurate bearish call from last month played out nicely as price broke out of the pennant pattern and proceeded to drop to our first price target of $6,000. Price has since popped back up to retest the bottom of the pennant . This is the moment of truth for bitcoin on whether it can reverse it long term bearish slide or whether it will continue to drop and make new lows. In an attempt to break up above the pennant price has fall back below today’s lows and has formed an ominous and bearish pattern called the inside bar fake out pattern. This is an inside bar pattern, where price breaks out and then pulls back in, which signals that traders are now trapped in their long positions and price now has the fuel needed to drop quickly.
I want to emphasize that today’s candlestick has not yet closed, so this pattern isn’t official until close, but if the bitcoin market closes around or below $7,400 then we may see price quickly drop lower from here. Also be aware of the strong, short term bullish trend of the last week, and any short positions should be strictly protected with stop losses.
It’s kind of freaky how accurate this analysis was from a month ago. I called exactly the drop, profit target, bounce and retest of the pennant.
OIL / CL
**Potential Setup**This video discussed the large bullish weekly pinbar setup that has formed in light crude. I discussed the current market structure, trading tips and trade ideas. Notes from the video are posted below.
Current Market Structure
-Long term bullish trend
-Price has stayed within bullish channel
-Large bullish weekly candle from pullback off of key support
Trading Tips
-Chances are higher now that price makes a string bullish run up to $75 and may even make a quick run to 80.
-Keep in mind that oil is generally a volatile product and large out-sized moves are common.
-This can be traded as pure directional using either futures , CFDs, or ETFs(with oil exposure), but due to the high IV I am looking to get both directional and short premium, which can be done by selling puts.
-Either enter on a retracement around $69 (more risky) or a break above the weekly candle around $71.25(less risky)
-Price targets are $75 and $80
Trade Ideas
-Sold a put w/ $61.50 strike(15 delta, 30 DTE ) when price was at $67
-Rolled that put up to $64 strike(17 delta, 27 DTE ) when price was at $69
-Now that we have a price action signal I am considering rolling up to a 30 delta option($66) to get more directional
-Keep in mind that September light crude is at 68.14, $2 below spot price
EURUSD
**Potential Setup**A major sell signal is potentially forming in the EURUSD. A large bearish pennant has formed and a bearish pinbar is currently forming off of the top of this pattern. The pennant pattern is giving us our bias and the candlestick pattern is giving us our entry signal. If the daily candle closes bearishly then this could be a tradeable setup. I will update my analysis after candle close.
Market Structure
-A bearish pennant format has been building since June
-A major selloff lead into the pennant pattern which give this set an even greater bearish bias
-A bearish pinbar is forming on the daily chart from the top of the pennant channel. This is create a major confluence of sell signals
Trading Tips
-If the daily candle closes as a bearish pinbar we may see price crash hard in the coming days
-Whenever a bearish price action candlestick forms off of the top of a bearish pattern it creates the most optimal risk/reward setups
-DO NOT JUMP THE GUN, WAIT FOR THE DAILY CANDLE TO CLOSE
Trade Ideas
-If the daily candle closes as a bearish pinbar a short entry can be made multiple ways, with varying risk/reward profiles. On the Forex markets a trader could wait for a break of the bottom of the and then enter short, or for a more risky but better Risk/Reward profile a trader could enter short if price retraces back up the pinbar , or a combination of both for a hybrid trade.
-Another way to trade this is by selling a call on the futures market (ticker /6E). This would allow a trader to profit from a drop and also collect premium in case price moves sideways and does not aggressively drop as expected.
-Finally the ETF FXE could be traded as either outright stock or a synthetic short position could be created using the stock options.
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Wow, I called that Euro trade like a pro. Just tanked hard and down almost 300 pips since the analysis.
It’s all in the price action.
US Dollar
**Potential Setup**Bearish price action is forming in the US Dollar -0.53% on the higher time frame charts. On the weekly charts an evening star pattern has formed on a bearish pin bar is currently forming on the monthly. Price action next week will tell us a lot about where the dollar may be heading, but if the dollar closes the month even weaker then it is right now it could mean continued bearishness in the dollar over the next year or two. This is certainly worth keeping an eye on.
GOLD
**Potential Setup**There is another set of confluent bearish patterns forming in gold right now. This points to the likelihood that gold drop lower yet again and either retests or breaks even lower than the recent lows of 1167. There is a head & shoulders pattern with a very bearish slant as well as a pennant formation. In addition there was a large bearish fake-out last week where price broke up and out of the pennant and was slammed back in immediately. This can be seen clearly in the intraday candlestick charts. The bearish pennant combined with the bearish overlapping patterns is creating a high probability scenario that gold will break down lower from here.
This hasn’t changed my long term perspective on gold which is bullish but for those looking to play the smaller time frame or hedge their long positions, these short term trends are still important to watch.
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GOLD
**Potential Setup**From the bullish price action I discussed yesterday, price pushed significantly higher very quickly. Price pushed into the key resistance zone of 1205-1215 last night and this morning broke above, reaching as high as 1218. This 1205-1215 zone was a critical zone to hold as it is a major road block to gold -0.24% putting in a real bottom. Unfortunately for the bulls, price was slammed back down and formed a very bearish evening star pattern. Due to this weakness and golds inability to hold above this zone I think we could see price tumble back lower to trend line support(1200), first key support(1190), and/or second key support(1166).
Silver
**Trade Idea**Silver has formed a number of bullish reversal patterns over the past few weeks/months. The 3 primary patterns that I am tracking are an inverse head and shoulders , a double bottom , and a large inside-bar false-break pattern. These 3 patterns are all in confluence and all have the same confirmation breakout price level of around 14.95. While nothing is a guarantee, if price is able to break through this 14.95 barrier the movement could be significant and quickly carry price up into the 16.20 region where price will bump into its next major resistance area.
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