There was poor US data but good Euro bond auction results released overnight. This has seen the USD pull back a bit and the Euro move up. All rather strange but, hey, at least with trend trading you trade what you see...not what you think.
The USDX is still around 80.81 but the double top, the bearish sign, could still be forming. I would still want to see a break close and hold below the daily trend line before shorting the USD though. (See chart).
The EURX is trading up at 101.65. I would not be surprised to see it pullback all the way up to the previous trend line break area. That is up around 102.7 or so and, also, coincides with current bear trend line. (see chart).
Really, both the USD and EUR currencies are struggling and it's just a matter of what bit of data, or news item, moves one of these more than the other. This kind of volatility is much easier to play from a trend trading approach to trading. You just have to get the time frame right.
The AUD/USD is looking interesting. It's trading into the apex of a symmetrical triangle. I have no idea what it will do but, with help of the ADX, indicators and trend line breaks I aim to try and catch the next move it does make. (see chart).
I'm still away so just keeping my eye in on things.
Thursday 12/1/12 (11am)
The EURX continues to chop along sideways and is still at the 101 level; near the daily pivot and monthly S1 level. The USDX has broken up above the 81 level again. (see charts).
Currently, I am getting mixed signals from the USDX. It looks like it could be forming a double top, which is bearish, but, breaking back above the 81 level is bullish. Hmmmm. This is where the ADX comes in. I'd be watching this for clues...on both indices.
I've noticed two of the pairs that I watch and have mentioned here in recent posts, the G/U and N/U, have both given 100 pip trades based on easy ADX and trend line break signals. Especially the G/U, I've been on about this for days now. This is easy stuff to trade guys!. Whilst I'm at the beach.., dining with family etc etc.....there is a lot of stuff happening for you all to trade!
Price has just chopped around on most pairs during the overnight US session. This isn't surprising given the lack of big news items. The USDX and EURX both haven't moved much. The USDX is still sitting at the weekly pivot level of 80.84, clinging on to near the 81 level. The EURX, still at 101, is just below its weekly pivot. (see charts)
The most interesting instrument to mention this morning is Silver. I had previously posted charts of Silver showing it hugging the upper trend line of a symmetrical triangle pattern. It broke out and up from this triangle last night during the London session for a 100 pip move. The chart below shows how easy it would have been to catch this move, or some of it, by even just using the ADX with the trend line break as confluence.
There still isn't much scheduled news on the horizon. This sideways movement though is giving the ADX on the indices time to retreat. This always helps with spotting the next major trend or move.
Some good data from Australia and China during the Asian session today has sparked a bit of a 'risk on' rally. The AUD, CAD, NZD and SGD have surged against the USD in response to this positive news as they are generally viewed as 'risk on' currencies. The EUR has not been dragged along with these buoyant currencies as it often is.
Interestingly, the EURX has been fairly well flat lining still at 101 whilst the USDX has pulled back a bit to 80.9. There isn't any more red flag news for nearly 24 hours so I would expect to just see more of the same kind of price action, failing any other news items or announcements that is.
Interestingly, the EURX has been fairly well flat lining still at 101 whilst the USDX has pulled back a bit to 80.9. There isn't any more red flag news for nearly 24 hours so I would expect to just see more of the same kind of price action, failing any other news items or announcements that is.
Tuesday 10/1/12 (7.30am)
Not a lot has happened overnight. The USDX has indeed drifted down to re-test the 81 breakout level and the EURX has drifted up to the comfort of the 101 level. This pause in price has formed what looks like a bull flag on the USDX and a bear flag on the EURX. I have drawn these patterns in the charts for you. (see charts).
Theory has it for these flags patterns that price pauses and then breaks out, in a continuation trend, to a similar extent as the length of the initial flagpole. Now, I'm not saying that this IS going to happen, I'm just saying that this is what I'll be watching for. Price on both could reverse here...you just have to watch. The beauty of these 'pause' periods though is that it lets the ADX scuttle back to the 20 level.
BTW: There seem to be flag patterns forming on the EUR/USD, EUR/JPY, GBP/USD, USD/CAD & USD/CHF too, to name just a few.
I've also posted a chart of Silver as it looks so weird hugging the trend line as it is doing.
PS: My girlfriend and her kids are coming to stay with us down here on holidays for the next few days so, I may not get to check charts or update the blog.
Monday 9/1/12 (5pm)
The market gap is filling at the moment. This often happens; price re-traces to fill the gap. At the moment the USDX and EURX are both pulling back to the levels they were at as of Friday close. I will check again later to see how things are moving.
Monday 9/1/12 (9am)
Market has just opened and has gapped down a bit.
I'm also watching to short the N/U and Silver...if this USD rally keeps on going that is....Trend line breaks will add confirmation to any TS signals. I'll update again later. Just watching for now...
Saturday 7/1/12
Last week was a fantastic week for trend trading with my TradeSpotting system. There were two, very easy trades confirmed with clear TS signals and aided by having the confluence of trend line resistance on the EURX.
The short on the E/U is currently up 220 pips and the short on the E/J is up 140 pips! Both of these trades are still running too! (see charts)
I have a few pairs on my radar for next week. I'm still away for a week and may not get a chance to catch these trades though.
I'm looking at the GBP/USD. It's trading at the bottom edge of a symmetrical triangle. I would be watching to see if it breaks, closes and holds below this level and then look to short this pair. It may well bounce up and keep trading within the triangle too. I'm not making predictions, I'm just saying what I would be watching for! (see charts)
I'm also watching the AUD/USD. This pair is also trading within a symmetrical triangle pattern on the daily chart. I'd probably wait to see if this trades bearish and then look to take this if it breaks, closes and holds below the 1.015 level. This is the 4hr 200 EMA and the monthly pivot. There is not too much blocking its continued fall once past this level until it reaches the bear trend line. (see charts)
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