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09 Nov
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.4920
Key G7 resistance levels: 1.4920
Counter-trend opportunities: 1.4970
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
We remain just bearish whilst below the weekly reversal level at 1.4920 (last week’s high). However, it might not be long before the weekly direction reverses and there are no signs of hourly topping as yet. If we do break above 1.4920, it’s likely that the euro will rally to 1.4970 (the 78.6% retracement of the entire move down from the all -time high at 1.5063. It’ll be interesting to see if we stop there and move lower again, or if the euro is intent on testing the 1.5060 level. Time shall tell! In the meantime, watch for signs of reversal at either 1.4920 or 1.4970, before trying small shorts for a move lower back to 1.4850 and eventually 1.4650.
Summary:
Sell rallies to resistance levels after a clear reversal – stops above the reversal pattern – target 1.48500 and then 1.4650.
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EUR/USD:
Update: The weekly direction has reversed to long, and I advise staying out until next week.
GBP/USD:
Weekly Trend direction: Bullish
Weekly trend reversal level: 1.6240
Key G7 support levels: 1.6620, 1.6550, 1.6480
Counter-trend opportunities:
Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal
Today's trade suggestion:
A fantastic bounce from the floor last week means that the pound remains bullish for the 5th week in a row, and we are currently testing the crucial 1.6720 weekly resistance level and 78.6% Fibonacci (see the numerous
touches over the past few months.) Traders could look for signs of reversal here, with the possibility of a countertrend short trade, or simply be patient and wait for dips to the support levels well below – starting at 1.6550. Target for shorts would be 1.6550 and target for longs back to the 1.6720 resistance level. A close above 1.6720 almost certainly means a move back to the August high around 1.7000 for another bash at moving higher.
Update: We have had a sharp move higher and remain in the long direction. Continue to buy dips, with supports at the levels above.
Summary:
Buy dips to supports after a clear reversal has formed. Target 1.6720.
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16th Nov
Weekly Trend direction: Bullish
Weekly trend reversal level: 1.4820
Key G7 support levels: 1.4900, 1.4820
Counter-trend opportunities:
Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.
Today's trade suggestion:
Tricky conditions as the euro grapples with the idea that we may have a medium term top in place at the key 1.5060. Still, last week’s direction was (just) bullish, although not very convincing at all. Bear in mind that at major turning points there is often a titanic battle between both sides (bulls and bears) and this leads to messy conditions which may last for several weeks. All that having been said, we’ll go with the long direction whilst above the weekly reversal level at 1.4820. This leaves just two real support levels – 1.4820 and Friday’s bullish engulfing candle reversal level at circa 1.4900. Look to buy dips to these levels, keeping in mind that’s things could get messy. I suggest trading lightly if you must trade, or waiting for a change in direction one way or the other (a new dramatic rally above 1.5060 or a drop below 1.4820). Target for rallies is the Fibonacci extension level at 1.5120, and then 1.5400
Summary:
Buy dips to support levels if you must. Target 1.5120 and then 1.5400.
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23rd Nov
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.5050
Key G7 resistance levels: 1.4950/60, 1.5000, 1.5050
Counter-trend opportunities:
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
Another day – another dollar for range traders as the euro has been stuck in the 1.4800-1.5000 range since the beginning of the month. This really could break out either way (as it eventually will) but there are signs that the 1.5000/5050 barrier is going to be tough to break. Notice on the hourly chart that we have the makings of a “descending triangle” with lower highs each time the rally to near the range top takes place. We are currently
butting up against the downward top of the triangle as I write, and I’ll be watching and waiting for signs of reversal on the hourly chart. Target for short trades is the range bottom around 1.4800 and, on a successful break
lower, 1.4650.
Summary:
Sell rallies to 1.4950/60 or at higher resistance levels, target 1.4800 and then 1.4650.
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25th Nov
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.5050
Key G7 resistance levels: 1.5000, 1.5050
Counter-trend opportunities:
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
Another day – another dollar for range traders as the euro has been stuck in the 1.4800-1.5000 range since the beginning of the month. This really could break out either way (as it eventually will) but there are signs that the 1.5000/5050 barrier is going to be tough to break. Notice on the hourly chart that we have the makings of a “descending triangle” with lower highs each time the rally to near the range top takes place. We are currently
butting up against the downward top of the triangle as I write, and I’ll be watching and waiting for signs of reversal on the hourly chart. Target for short trades is the range bottom around 1.4800 and, on a successful break
lower, 1.4650.
Update: Danger signs as the euro is making “higher lows” and has broken the tentative downward hourly trend line. However, I’ll adopt a purely objective stance based on the G7 model, and remain with the bearish direction whilst below 1.5050. This means there is remaining resistance at 1.5000 and 1.5050, where I’ll continue to watch for signals to sell.
Summary:
Sell rallies to 1.5000 or 1.5050 after a clear G7 entry signal, target 1.4800 and then 1.4650
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01 Dec (My apologies this should have gone up yesterday...)
Weekly Trend direction: Bullish
Weekly trend reversal level: 1.4800
Key G7 support levels: 1.5000/4980, 1.4920, 1.4820
Counter-trend opportunities:
Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.
Today's trade suggestion:
Interesting week as the JPY strengthened sharply against the euro and the dollar, whilst the euro broke to new recent highs vs. the dollar. This has turned the euro weekly direction bullish and we have a new weekly reversal level at 1.4800. The markets are messy to say the least, but that’s what is to be expected as we near year end. Caution is required and assumptions to be avoided like the plague! Whilst above 1.4800, we’ll look to buy the euro into dips, with first support levels at 1.5000/4980 (the major one – having been the previous range top for several months) Below that we have 1.4920 and 1.4820. Watch and wait for a clear reversal pattern to form
before buying and make sure you have firm stops in place! Target for longs is the weekly 78.6% Fibonacci level at 1.5240 and then (if this fails to withstand) 1.6000, the all-time high.
Summary:
Buy dips to 1.5000/4980 or 1.4920 after a clear G7 entry signal, target 1.5240 and then 1.6000.
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07th Dec
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.5145
Key G7 resistance levels: 1.4950, 1.4980, 1.5000, 1.5020
Counter-trend opportunities:
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
Well, the jobs report sure got things going, this time – South, for the euro. We have performed a beautiful “bearish engulfing candle” with a “spike high” on the weekly chart, and this means that we’ll be looking to sell euros this week. Resistance levels are neatly defined above the current price, so it won’t be hard to pick the spot to enter. Watch and wait for a clear G7 reversal pattern before entering, remembering that these thin markets can lead to large retracements. Don’t enter too soon and don’t make assumptions. Key resistance lies either side of the 1.5000 area, with 1.4942 being the first, at the 38% Fibonacci zone. Whilst it’s hard not to be sceptical of last week’s reversal, year-end markets often present ideal technical trading opportunities and this week could provide an excellent opportunity to profit from the euro!
Summary:
Sell rallies to 1.5020/30, 1.4950/4980 after a clear G7 entry signal, target 1.4650.
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Weekly Trend direction: Bearish
Weekly trend reversal level: 1.5145
Key G7 resistance levels: 1.4800, 1.4850, 1.4900, 1.4950
Counter-trend opportunities:
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
7 December:
Well, the jobs report sure got things going, this time – South, for the euro. We have performed a beautiful “bearish engulfing candle” with a “spike high” on the weekly chart, and this means that we’ll be looking to sell euros this week. Resistance levels are neatly defined above the current price, so it won’t be hard to pick the spot to enter. Watch and wait for a clear G7 reversal pattern before entering, remembering that these thin markets can lead to large retracements. Don’t enter too soon and don’t make assumptions. Key resistance lies either side of the 1.5000 area, with 1.4942 being the first, at the 38% Fibonacci zone. Whilst it’s hard not to be sceptical of last week’s reversal, year-end markets often present ideal technical trading opportunities and this week could provide an excellent opportunity to profit from the euro!
Update 10 December: Excellent opportunity it was, and the euro is still moving steadily (but not dramatically) downwards. Key resistance levels, starting at 1.4800, will provide areas to sell into during the rest of this week. Target for the shorts is 1.4620 and then 1.4500.
Summary:
Sell rallies to resistance levels (especially 1.4800/50 after a clear G7 entry signal, target 1.4620.
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14th Dec
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.4905
Key G7 resistance levels: 1.4780/4800, 1.4860, 1.4930
Counter-trend opportunities: 1.4500/1.4480
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
The euro continued to drop last week, mainly due to a late dollar rally on Friday. Some have called this an “unrelenting” dollar rally, but I could hardly agree with that – this correction is a normal part of the process and we
could well see further dollar weakness before year end. However, we’ll go with the flow for now, and look to sell euros whilst below the weekly reversal level (now at 1.4905) resistance levels lie overhead at 1.4780/1.4800 (key)
and then slightly higher at 1.4860. Watch and wait for a clear G7 reversal signal before selling, stops above the reversal candles, and target around 1.4680 and then maybe 1.4600. Counter trend longs could be tried at
1.4500/4480 after a reversal pattern.
Summary:
Sell rallies to resistance levels
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