We had some news out of the UK which caused the GBP to rise up near the 1.5700 figure – where it failed to close above. It also appeared heavy after it hit our Target 2.  Knowing statistically that a pair can only rise or fall so much in a given day, before it is highly likely to reverse off its highs or lows gives a trader a powerful edge.

After the second lower high and a close right at our upside Target 2, we enter short with a stop loss above the lower high.  Price penetrates yesterday’s high and retests it before moving further down. As price begins to rise, it creates a double bottom for the session – filling a pattern and we exit.

Thanks to the UK news this pair was active.  The market awaits the risk events of the FOMC meeting minutes today and ECB Draghi’s comments on Friday.

Good luck with your trading!

Find your edge, keep it simple and be consistent!

Back tomorrow if we find a trade.

The AUD set up nicely for a short trade consistent with the trend.

An interesting note here is the Reserve Bank of Australia has not ruled out intervention and has repeated that the AUDUSD  remains above estimate of fundamental value… which sounds to me like they are okay with the AUD getting weaker.

Although it’s been moving up recently, I prefer to find short setups consistent with USD strength.

Unfortunately this nice setup ran out of time for results at the UK close for me.

Good luck with your trading!

Back next week.

The CHF intrigues many traders at the moment.

The Swiss National Bank Governor Jordan stated that they won’t give up the cap for the foreseeable future and that the currency cap is key for preventing deflation.

If the EURCHF (moving currently at a snail’s pace) approaches/penetrates 1.2000 – we anticipate an intervention by the SNB.

Although the USD remains strong, a countertrend setup appeared today which exceeded our Reward for Risk ratio of 3:1.  With a stop loss above structure we attempt to get down to the Asian low and yesterday’s low… then down  to our Targets 1&2.

As this is a countertrend trade, the idea is to be nimble and definitely not greedy.  Always heed what price is telling you.  As price moved down and we get a wicky bottom to our bearish candle, we tighten our profit stop for the minimum we want out of this trade – should it reverse.

Price takes us out and we move on with modest gains. What is most important is that we executed according to our rules and trading plan.

I have found trading to tricky the past couple of weeks.  Be very selective in choosing trades and if trades don’t meet your criteria – come back tomorrow.  The market isn’t going anywhere.

Good luck with your trading!

 

It’s been an active week for GBP economic news, and with the last item out of the way, the GBP showed strength against the USD, EUR and CHF this session.

The GBPCHF has been very active lately unlike the EURCHF.  It has made higher lows daily since Tuesday.  When price attempted to take out the Asian low today…buyers entered.  With a stop loss a few pips below the Asian low, a long trade is entered during the US session.  The first level for price to challenge will be the Asian high, followed by the post news spike high, then yesterday’s high.

Price did almost that.  It moved up to the Asian high retested the level.  It moved higher and lost momentum at the post news spike high, producing wicky candle tops indicative of sellers entering at this level.  As price has been stalling near the 1.5320 level this week, despite the higher lows…it may be a bit of grind to get higher in the near term.  We will see what next week brings us…

Enjoy your weekend!

Back Tuesday if we find a trade.

A fairly quiet session for the EUR today despite lots on the economic news calendar.

As the UK session got underway the EUR attempted to break the Asian low but found buyers keeping price above the 1.2600 figure…for now.  As price moved up, the 1.2670 area became a mini resistance level.  As price tried to push through this level and is unable to close above – a short entry sets up with a stop above the spike high.   Our targets (not shown) are 1.2577 and 1.2560 for the session.  This gives us a better than 6:1 R/R with a stop loss of 15 pips.

First things first…we must have price start closing below the Asian session high and then continue to close below yesterday’s low and the Asian session low.  We also have US Unemployment claims pending.

Price begins to move down then reverses and retests the 1.2670 level again, but does not close above it… which gives us confidence that the level will hold.  The US news pushes price down and we begin to test the Asian session highs, but cannot close below.  Price finally breaks through and stops at the Asian session low.  We are not willing to give back more than half the previous candle’s pips.  Price reverses off the Asian low and takes us out for a modest gain.

We continue to look to fade the rallies in this pair anticipating the October lows to be targeted in the near future.  As mentioned yesterday, the 1.2600 figure will find buyers so protecting profits is paramount.

Good luck with your trading!

Back tomorrow if we find a trade.

The EUR chart continues to set up for shorts.  Be cognizant of the October 10,13 and 15 lows where it has moved upward as it approached the 1.2600 figure.  If this level cannot hold the 1.2500 figure awaits a test.  Be very careful position trading around these levels as you may give back some nice gains.

In advance of the US session today, the EUR made a lower high for the session and a short entry is taken just above the 1.2700 figure. As price moved down, we move our intial stop loss to plus one pip in advance of the US CPI numbers.  Price moves down after the release and continues down one more candle…looking very bearish.  It then began to retrace upward for 2 candles – where we choose to exit before giving back any more of our profits.

Overall we continue to have USD strength and EUR weakness from an economic fundamental perspective.  There is both French and German news tomorrow… if negative the we may see the 1.2600 and or the 1.2500 levels tested.  The US Unemployment number tomorrow will also certainly be watched by traders.

The GBPCHF is a very active pair and has been a good one to trade. (not shown)  The SNB’s Zurbruegg has warned of unlimited intervention and more actions regarding the EURCHF.  This pair currently is barely moving each day, so I much prefer the active GBPCHF.  Keep an eye on the EURCHF 1.2000 big figure for fireworks.

Good luck with your trading!

Back tomorrow if we find a trade.