Monitor the Market sentiment, oil, and gold, Chf, and USD to follow where the money goes. Safe havens are being sought for now, until this Bailout issue gets resolved.
Expect panic selling. Expect support/resistances to be broken both directions in all pairs.
EASY Money
Sell rallies in gbp/usd, eur/usd, and aud/usd. Buy dips in usd/cad and usd/chf.
Forex Chart Analysis:
Click on the charts 2 times to zoom in a bit. The daily chart shows price trading inside the white 5 sma channel. We see a breakout to the upside of the white pennant triangle formation, then a subsequent retrace/re-test of that formation, where it broke support, and bounced at the white 5 sma low.
Resistance is formed by the brown 55 sma and the white 5 sma high, which are touching each other. The 55 sma is sloping downward at a steep angle, and has crossed the 100 (red) ,200(aqua) ,and 300(pink) sma’s.
Candlestick formation is showing an inverse head and shoulder or a possible cup and handle, but not confirmed yet. Price was rejected hard before completion. There is definite selling pressure where resistance resides. We are looking to sell this pair hard next week sometime if we get our price. We are standing aside with cash waiting for some no-brainer opportuniites. If the U.S. congress acts in a timely manner with a good bail-out program, then the downtrend should resume.
The new daily one candle mom is showing a resumption of the move up or a consolidation pattern. Triple swap wednesday. We took profits on our short positions. Up +215 pips for the week.
The daily chart for eur/usd shows a breakout of the white ascending triangle and a subsequent retrace to re-test the breakout level. We have been selling this pair from 1.4800, and booked some nice profits. We have one remaining short position from 1.4770 that has a stop loss of +10 pips for now. The position is approximately +100 pips as of the time of this forex tutorial.
Remember: All breakouts will retrace and re-test…
Easy money….
Eur/usd is in consolidation. We may have a temporary bottom in this pair. Range trade scenario is our strategy. Our sell order at the green 22 sma was hit and took profit at the yellow 5 sma for around 150 pips.
Cable has hit my upside target of that green 22 sma, and was rejected at 1.8128. Consolidation is progress. Buy dips and target resistance. Sell rallies and target support. Until we see a breakout…
The monthly chart for eur/usd shows a rejection of the corrective wave 4 down around the blue 50% fib, at the 1.3884 area. The 1 candle momentum indicator showed us this retrace was coming long before it happened. You can see from from our previous articles on eur/usd, that we have been warning about the upcoming consolidation/retrace, and we closed our USD positions across the board, booking some very nice profits.
We have studied price action in relation to many different indicators, such as the MACD, RSI, CCI, ATP, ADX, etc. We have found them all to be lagging indicators. The Momentum indicator used at different values has given us a leading indicator that is predictive rather than reactive. We do not trade indicators, however, but rather candlestick formations, price action, and support/resistance.
New Forex traders need to learn to read and interpret what the charts are telling them. Learning to recognize reversal candlestick formations, and knowing where previous swing highs or swing lows are located, will greatly enhance your odds of being on the correct side of most price movements. Studying the longer time frames will remove the noise and the choppy price action. Monitor the direction and slope of the Momentum indicators at the candles’ open/close of each time frame you choose to study on any currency pair.
We finally saw the profit taking take place before the weekend. The charts have been telling us this would happen. It is possible that we may see another gap monday Asian session. 1.8100 area is the possible upside target, which is that green 22 sma.
The monthly chart shows a bounce upward in price from the yellow 50% fib. If there is profit taking and closing of positions for the weekend, we will see more upside.
If traders continue to hold their USD positions, then we will see a resumption of the downtrend.
This pair, and others, have been on multi-year trends against the USD. What we need to determine is whether this is merely a correction to the uptrend, or is this a change of trend?
We have been standing aside since Tuesday of this week, after booking nice profits.
September is always a tricky month to trade for a lot of reasons. We are standing aside with cash waiting for set ups to make some easy money.
