The weekly chart for gbp/jpy shows price sitting on the purple 400 sma, which was breached in march 2008. We see the beginning of a 5th wave down from 251, and it is possible to see a double bottom formation around 192, or a lower low. All 4 moms are below 100. This is bearish.
Strategy: Stand aside for now, and sell the retrace from 203 or so.
The monthly chart for gbp/jpy shows a bearish current candle touching the green 250 sma. The 100 and 125 sma’s are sitting just below providing support. Moms are quite bearish. A bounce upward from here would be likely. We are standing aside.
The weekly chart for eur/usd shows a possible reversal formation after 5 bearish candles in a row. At the least, we should see some sideways consolidation trading, and choppy price action short term. The 5 candle mom shows a retrace is in effect. the one candle mom has breached the 100 level.
The monthly chart for eur/usd shows a 1,012 pip drop from the open at 1.5582 to the low of 1.4570 so far this month. It also shows a 1,464 pip drop from the previous high at 1.6035 to the low of 1.4570. That is quite a move in a short period of time. Downside target is the green 22 sma at the 1,4320 area, but we expect some consolidation first. We have closed all positions and we are standing aside until September, or until resistance is encountered around 1.4930 area to 1.5000 area, where we would look to sell again.
The weekly chart shows a peek above that white descending trendline and retracement down, retesting it, and breaking it. Price is trading below the 5 sma channel, and the green 22 sma. Candlestick formation is showing a bit of an inverted head and shoulder pattern, if you turn your head sideways a bit to look at it. This would be bullish if completed. Moms are flat giving no direction, but slightly bearish. Price action shows sideways consolidation is in force. A range trade strategy could be profitable because a definite range has been established. We do not want to risk trading this week. Price will be choppy in both directions.
The monthly chart shows the current candle as quite bearish, at the moment, but making a higher low so far this month. We see buying interest emerging at the 50% fib, and the 5 sma open. The 5 sma channel is pointing up. Price is inside that 5 sma channel for now. Price has broken below the double sma support provided by the green 250 sma and the pink 300 sma. That will now act as resistance.
Bearish divergence can be seen on the 14 candle mom. Notice how she is testing that white descending trendline. The blue 1 candle mom is crossed below the yellow 5 candle mom. The 10 candle is about to cross the 14 candle mom. The yellow 5 candle mom is reflecting the consolidation and retrace upwards. The blue one candle mom is showing a resumption of the downtrend.
Price has been rejected at the white descending monthly trendline, where it encountered strong selling pressure. Euro fundamentals are getting weaker. This downtrend could have some legs to it.
You can expect some profit taking as we head into the Memorial Day weekend/End of August. We have closed all positions and are standing aside until after Labor Day.
Strategy: Stand aside on all pairs until September.
I’m trying to get a better feel for this momentum stuff (which is powerful stuff) and am wondering what time is best for opening / closing readings.
Thanks for taking the time.
Gabe
The Weekly chart for nzd/jpy confirms the monthly chart analysis from our previous article on nzd/jpy. Moms are flat, but sitting below 100. Slight bearish slope. Price broke down to a low of 73.92 two weeks ago, but buying interest was found there that took her back up to a close inside the 5 sma channel. Comfort zone during consolidation. She retested the ascending trendline and was rejected there. That trendline was solid long term support turning resistance. It would take multiple attempts to break it.
Here is the same chart showing a descending trendline. A nice descending channel has formed.
Lower lows are evident. However she is sitting on a red horizontal trendline which denotes a previous swing low, as well as the white 5 sma low.
The monthly chart shows a solid break of the monthly ascending trendline, and a double bottom formation around 73.92 with a slightly lower low than the previous swing low from August 2007. She is attempting to form a head and shoulder formation, but these monthly chart formations take a long time to play out. We see 3 red bearish candles in a row. That is called a 3 crows formation. Google it. It is bearish.
Momentum indicators are below 100. This is bearish. Shorter term moms show a retrace up to resistance. This pair may test the white 5 sma low or even the ascending trendline. All breakouts usually retrace and retest the breakout levels. Look for a lower high to be formed. Then sell it……
Monthly chart for aud/usd shows price has broken the the green 22 sma and retraced. Gold is bearish, and oil has weakened for now. Downside target is the previous swing high around the .8008 area, which is also the brown 55 sma.
Strategy: sell rallies targeting .8450, then lower if that support breaks.
