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Happy Holidays,
Thank you for your support these last few months. We are off on a break now until the 15th January 2010. Until then keep well and stay safe.
Cheers,
James & Chris.
PS. If you missed these here are some webinar links from yesterday with the OU guys…
Presentation Webinar
Q & A Webinar
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Weekly Trend direction: Bullish
Weekly trend reversal level: 1.4255
Key G7 support levels: 1.4450/80, 1.4280
Counter-trend opportunities:
Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.
Today's trade suggestion:
It’s about time! The euro spent most of the holiday month ranged between 1.4300 and 1.4450, and this morning seems to be the day it’s decided enough. 1.4450/80 is now the key support level, and we’ll look to buy dips to this level during this week. As we have only just broken out, a lot depends on how high and how fast we rally today
and tomorrow, and we may have to adjust the support zone higher before we get a chance to buy. Weekly support lies at 1.4255, and as long as we remain above there, the strategy to buy dips will remain unchanged this week!
Summary:
Buy dips 1.4450/80 after a clear G7 entry signal, target 1.4580.
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Update: No change. A chance to enter the trade today, now that all the entry conditions are lined up
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18th January
Weekly Trend direction: Bullish
Weekly trend reversal level: 1.4320
Key G7 support levels: 1.4320/50
Counter-trend opportunities:
Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.
Today's trade suggestion:
Despite last week performing a “higher high and higher low”, the candle spike high is a concern for bullish traders. However, this also gives us an opportunity to get into a long position this morning with a tight stop and a
weekly reversal level only 10-20 pips below us at the time of writing this. We’ll know if we are wrong very quickly.
Whilst above 1.4320 I’m looking to buy the euro with a target of around 1.4420 (the 38.2% retracement of the move down from last week’s high) or perhaps even 1.4450 (see chart – previous support and the 50% Fibonacci level). We are still in a consolidation phase with the key medium term support at 1.4220 still holding after 4 weeks of first contact. This week should be a decisive one, probably with a strong break higher.
Summary:
Buy dips 1.4320/50 after a clear G7 entry signal, target 1.4420/50.
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Update 20 January: Weekly direction now reversed. Stay out of this pair until Monday!
Summary:
Stay out.
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25 January
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.4414
Key G7 resistance levels: 1.4240/65, 1.4300, 1.4370
Counter-trend opportunities:
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
A good thing I stayed out of the market on Friday, as the currencies experienced “typical” Friday volatility and unpredictability. The reversal we experienced earlier in the week (after the weekly support level was broken)
served well to keep us out of further long trades and we are now able to re-evaluate at the start of this week. It’s a little tricky. The direction this week is firmly short, but we are at a major 38.2% Fibonacci support level which should provoke a sharp bounce. It’s best to wait for a bigger rally before selling, with a key resistance level in the 1.4240/65 level. Watch and wait for a clear G7 reversal pattern before selling into this level, with tight stops above the reversal pattern. Initial target should be around 1.4160 (the 25% Fibonacci level today)
Summary:
Look to sell into the 1.4240/65 level, stops above the reversal level, target 1.4160
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29 January
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.4414
Key G7 resistance levels: 1.4240/65, 1.4300, 1.4370
Counter-trend opportunities: 1.3850
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
A good thing I stayed out of the market on Friday, as the currencies experienced “typical” Friday volatility and unpredictability. The reversal we experienced earlier in the week (after the weekly support level was broken)
served well to keep us out of further long trades and we are now able to re-evaluate at the start of this week. It’s a little tricky. The direction this week is firmly short, but we are at a major 38.2% Fibonacci support level which should provoke a sharp bounce. It’s best to wait for a bigger rally before selling, with a key resistance level in the 1.4240/65 level. Watch and wait for a clear G7 reversal pattern before selling into this level, with tight stops above the reversal pattern. Initial target should be around 1.4160 (the 25% Fibonacci level today) Update: The euro continues its slide down. I wouldn’t call it unrelenting, but it’s steady. Now that 1.4000 has been broken, and we’ve had a daily close below there, it’s possible that the price is heading towards the 61.8% extension at 1.3850. There won’t be an opportunity to sell today, but if we do reach 1.3850, there’s an excellent chance to try a small counter-trend long trade if we get a clear reversal pattern. Other than that, see you next week!
Summary:
Perhaps try small counter-trend longs at 1.3850 if and when we get there!
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01 Feb
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.4200
Key G7 resistance levels: 1.3980/1.4000, 1.4020*, 1.4060, 1.4120
Counter-trend opportunities: 1.3850
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
The euro continues its slide down. I wouldn’t call it unrelenting, but it’s steady. Now that 1.4000 has been broken, and we’ve had a daily close below there, the price has reached the 61.8% extension at 1.3850. There won’t be an opportunity to sell today, but if we do reach 1.3850, there’s an excellent chance to try a small counter-trend long trade if we get a clear reversal pattern. Remember that counter-trend trading is riskier, and you should only attempt this with a small position and tight stops. The target for long trades is 1.3980/1.4000 where long trades should be closed while we watch and wait for signs of reversal back to short – to go with the main trend direction. We’ll see what it looks like if and when we get there. Interesting to note that last week’s bearish candle was completely “shaven” No wick on the bottom side. Sometimes that can lead to a dramatic
reversal.
Summary:
Perhaps try small counter-trend longs at 1.3850, target around 1.4000 (or earlier if it falters). Then watch and
wait for an opportunity to sell.
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Update 05 Feb: Well, I expected the euro to drop back from 1.4000, and it didn’t disappoint. We have had an excellent 8 days trading the euro, but it’s best to hang up the keyboard today, as it’s NFP Friday. If you MUST trade today, perhaps wait until 9AM Eastern before evaluating the impact of the news. Note that 1.3685 – 1.3650 is key support, formed by two 100% Fib extensions, and presents the best opportunity to BUY the euro if you are going to trade.
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08 February
Weekly Trend direction: Bearish
Weekly trend reversal level: 1.4030
Key G7 resistance levels: 1.3720/50, 1.3800, 1.3860
Counter-trend opportunities: 1.3580/1.3600
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.
Today's trade suggestion:
The Euro slipped further down on Friday after the jobs report, as I suspected it might. The 1.3580 level is such a key support area, that it was always likely to act as a price magnet as soon as 1.3800 was broken. This leaves the
euro in an incredibly oversold position (the most dramatic since November 2008) and we are likely to get a bounce or spike low sometime soon – perhaps this week. We’re still looking to sell euros from the resistance
levels overhead, but we need to be rather more cautious this week due to the factors just mentioned. Whilst on the topic of “oversold” and “bounces” it might be worth trying a small, counter-trend long trade from the vicinity
of 1.3580/1.3600 (if you can get it) with stops below 1.3570. Overhead, resistance levels lie at 1.3720/50, 1.3800 and 1.3860. As always, watch and wait for a clear G7 entry signal before selling for a target of 1.3600.
Summary:
Sell on rallies to resistance levels after a clear G7 entry signal, or try tiny counter-trend longs from circa 1.3600,
stops below 1.3570.
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