Woo hoo! Is this it? Is this the break out we've all been waiting for? I'm not at all sure but I suspect the next few trading sessions will spell out an answer for us.
The USDX has broken down and out from its triangle pattern on the daily and 4 hr chart. The thing that makes me think that this fall could just possibly be sustained is that it occurred with minimal spikes and volatility. It was like a gradual concession...'yeh...ok....I'm going...'. Also, the ADX has given me a TS SHORT signal and the Bollinger bands have opened up.
The EURX has risen and I also have a TS signal to LONG this. This index has some resistance in its path though in the form of the 4 hr 200 EMA first off and, then, the bear trend line of the triangle that it is trading within.
The TS signals on these indices then translate to possible trends on the currency pairs. I do have a number of signals now and I'll update on these in my later w/e posts. This could spell an end to the sideways doldrums we've had for weeks. Hooray to that! Whilst I don't quite understand the market sentiment I'll happily trade it once it gains conviction!
The E/U LONG signal that I jumped into early did, indeed, continue to evolve and I am currently up around 50 or so pips.
The G/U LONG that my TS system found the other day has now delivered up to 120 pips! Sadly, I didn't get into this trade. It would have only needed a small Stop too.
The USDX could easily bounce back up from here too, as it has done before. Look back to the USDX charts from early April for an example of this. I will want to see this break down hold its position to be fully convinced of this new trend.
The G/U LONG that my TS system found the other day has now delivered up to 120 pips! Sadly, I didn't get into this trade. It would have only needed a small Stop too.
The USDX could easily bounce back up from here too, as it has done before. Look back to the USDX charts from early April for an example of this. I will want to see this break down hold its position to be fully convinced of this new trend.
It is Saturday morning here and we are headed down to the beach. Autumn here has been translating into sunny mild days with temperatures up to 19 degrees often as early as 8am. We have had some rain though too. It is my husbands birthday so we're fairly busy with friends for lunch. I will try and post my update later tonight but it may end up being posted tomorrow.
There are a few new TS signals forming up now that should develop fully on the next 4 hr candle close. That will be midnight for me!
I've taken a LONG on the E/U.
Friday 20/4/ (7.30 pm)
The indices are still seeming to push towards 'risk on' for the moment at least.
The GBP/USD trade, a TS + trend line break out LONG, is now up 85 pips.
The E/J seems to be rallying and is up over the 4 hr 200 EMA for now. The USD is falling but the USD/JPY is rising...go figure!
PS: I'm listening to this tonight whilst keeping an eye on the charts...in memory of Levon Helm, drummer and singer from 'The Band', who succumbed to throat cancer earlier today: http://www.youtube.com/watch?v=q-w9OclUnns
PS: I'm listening to this tonight whilst keeping an eye on the charts...in memory of Levon Helm, drummer and singer from 'The Band', who succumbed to throat cancer earlier today: http://www.youtube.com/watch?v=q-w9OclUnns
There seems to be a bit of a risk on rally starting with the USDX moving lower and the EURX moving higher. I'll wait to see if this lasts though. Something has to give soon though, surely!
No new TS signals just yet. The G/U LONG TS signal from yesterday is up 50 pips now.
The EUR/JPY looks interesting though. It has broken up above the daily 200 EMA and is now attempting to break up over the 4hr 200 EMA. This pair had already given me a TS LONG signal on the 4 hr chart earlier in the week which I ignored. So, I just flicked to the daily chart to see if a daily TS signal was looming. One is close to forming BUT, what struck me, was the Head and Shoulder pattern that looks to be forming. (see chart) Hmm. These H & S patterns are bearish. So, conflicting signals. I'll watch it though. I will LONG the E/J but, like with the other Yen pairs, won't SHORT the E/J due to BoJ efforts to keep the Yen low.
BTW: there is red flag EUR and GBP news out in the next couple of hours. Watch out for these @ http://www.forexfactory.com/calendar.php
Well, apart from a spike overnight, both indices are back to exactly where they've been parking themselves for the most part of recent sessions. The USDX is back at the 79.50 and 4 hr 200 EMA whilst the EURX is back at the weekly pivot just above 103! (see charts)
PS: Take a look at the ADX indicator on both of these indices. The ADX and DMI lines are all below the 20 level on both of the indices. This is a clear extra visual stating the same thing: there is no overall trend. Thus, no trend = no trend trade!
Also, look how tightly the Bollinger bands are closing in on price action too. Tight Bollinger bands reflect low volatility; which is another way of saying 'no trend' or 'little movement'. Tight Bollinger bands are often interpreted as a warning sign for a pending break out. Yeh, bring it on...please!
PS: Take a look at the ADX indicator on both of these indices. The ADX and DMI lines are all below the 20 level on both of the indices. This is a clear extra visual stating the same thing: there is no overall trend. Thus, no trend = no trend trade!
Also, look how tightly the Bollinger bands are closing in on price action too. Tight Bollinger bands reflect low volatility; which is another way of saying 'no trend' or 'little movement'. Tight Bollinger bands are often interpreted as a warning sign for a pending break out. Yeh, bring it on...please!
Most of the pairs are, similarly, chopping around sideways. There have not been any decent short term trends on the pairs I watch. The only consolation is that the G/U LONG based on TS and a triangle breakout is still hanging in there as valid, for now and, although it hasn't moved that much, it is still up about 40 pips.
You can't catch fish when they ain't runnin'! It's going to take a sustained break out on the indices to get some trends happening on the currency pairs. We just have to wait until that happens.
BTW: the broader markets are currently down but there is still 1 hr until close. It seems that poor economic data and ongoing Euro zone concerns overshadowed some good earnings reports. The USD has not committed to this move in stocks just yet though but will be worth watching.
The indices are still giving little away just as yet.
The GU trade TS LONG on the 4 hr that was also a triangle breakout has continued to evolve. It is currently up 40 or so pips.
Thursday 19/4 (1.30 pm)
The indices and most of the pairs are just trading sideways. Very little to note. The G/U triangle breakout and TS LONG is still valid though, for the time being at least.
Thursday 19/4 (6.30 am)
Same old...same old. The indices continue to bounce. The USDX is now back at the comfort zone of 79.50 and 4hr 200 EMA. The EURX is back just above support of 103 and hanging out near the weekly pivot. Creatures of habbit!
The Yen TS signals have faded out after giving pips though. They each gave between 60 ~ 70 pips.
The only new TS signal on the 4 hr chart that I have is a LONG on the G/U. The G/U has also broken out and up from a triangle pattern. The indecision on the indices and the broader markets has me suspect about the life of this move though. Also, the latest breakout candle on the 4 hr has 75 min to close but is currently forming a pin bar reversal candle. So, I won't jump into this trade just yet.
The USD is having a bit of a rally this evening. Essentially though, the indices have chopped around all week.
The A/J long has recovered. I should either have taken an early profit or set a wider stop. Next time!
I don't have any TS signals on the 4 hr charts, except for on the Yen pairs which I will not take.
European shares are flat, as are the US pre-markets. The Cable is up and bucking the overall trend though based on positive employment data. This pair is butting up to key resistance in the 1.6 level and upper bear trend line area......again.
Wednesday 18/4 (5.00 pm)
I have been stopped out at b/e on my A/J LONG trade based on the 15 min charts. I'm not used to trading this time frame and, if I do so in future, I need to do things a little differently. This trade did deliver up to 50 pips today from its initial signal. See chart below:
BTW: I still have a valid TS signal to LONG this on the 4 hr time frame and, if I was trading this pair on the longer time frame I would have had a wider stop and, thus, be still in the trade. The lack of signal on the indices is keeping me out of longer time frame trades at the moment though.
Note to self when trading off 15 min charts in future:
- Don't chase trades.
- Get in the trade on the initial signal.
- Be content with smaller profit targets eg: 30 ~ 50 pips.
- Set profit targets???
- Monitor charts early during the Asian session when trading Aussie pairs on 15 min charts.
Wednesday 18/4 (1 pm)
The USDX is having quite a rally since I last posted. I'm not sure why. I have moved my stop to b/e on the LONG A/J and it is currently only up about 15 pips. I did get into this trade quite late from a 15 min chart perspective though. It's up about 45 from the initial signal!
Wednesday 18/4 (10.30 am)
I have taken a LONG on the A/J based on 15 min charts. In at 84.382. I don't defer to the indices so much when looking for trades on shorter time frames. I'm late into this trend trade though as it kicked off much earlier this morning. See the trend on the 15 min chart below. BTW: I do just have a signal to LONG this pair on the 4 hr chart though too!
There seems to be a bit of 'risk on' appetite this morning. Asian stocks are currently up due to good news from US earnings and Spanish debt sale results. Thus, it is not surprising to see the A/J rally first. I have mentioned before how this pair is the 'risk on' or bell weather currency pair. Also, FX Live advises about a favorable report on the Aussie economy that is, no doubt, helping boost this pair:
Wednesday 18/4 (6.30am)AUD sentiment getting boost from IMF forecasts
Written by Sean Lee
April 18, 2012 at 00:32 GMT
April 18, 2012 at 00:32 GMT
The IMF again forecasts that the Australian economy will be the strongest amongst the developed nations; more from The SMH.
AUD/USD is consolidating above 1.0400 and AUD/JPY is nearly 2% above yesterday’s lows.
The indices chopped around last night with very little deviation. It looked less like a tussle between them but, rather, a case of...'you go first'..... followed by.....'no, you go first'. Neither pair seems to want to make the first move.
Why this struggle and why the tight ranges? I put it down to the broader markets. The DOW ended up last night back up over the hugely significant and psychological 13,000 level. These markets are still at critical levels where they have to commit, soon, to either continuing with this rally, after a bit of a recent pause, or, to having some form of deeper correction. The indices are simply reflecting this struggle.
My TS system isn't failing, it is working fantastically! It is keeping me out of being whipped around in potentially losing 4 hr chart trades that have no follow through and, thus, from losing money! Preserving capital is a key priority in trading!I'm absolutely cool with that but, I have to be patient. I'm getting better in that department!
My TS system is delivering good signals and trades, where they pop up, on the shorter time frames, that is, the 15 min charts. This is the only place to look for trend trades at the moment guys. Even with this indices chop last night there were 2 possible trade on the A/U 15 min charts that delivered up to 50 and then 30 pips. That is phenomenal in this market for just one night. Sadly for me, I slept right through it! (see chart below)
My TS system is delivering good signals and trades, where they pop up, on the shorter time frames, that is, the 15 min charts. This is the only place to look for trend trades at the moment guys. Even with this indices chop last night there were 2 possible trade on the A/U 15 min charts that delivered up to 50 and then 30 pips. That is phenomenal in this market for just one night. Sadly for me, I slept right through it! (see chart below)
I don't have any TS signals on the 4 hr charts, and given the current markets, nor would I expect any!
The indices are back to where they were this morning. The USDX is sitting on the 4hr 200 EMA, again, and the EURX is sitting on the weekly pivot.
Most of the currencies have just bobbed along sideways as well. The only outlier seems to be the G/U. It has had a little trend run this evening that could have been picked up on the shorter time frame 15 min chart for about 60 or so pips. This was, no doubt, prompted by the release of some positive GBP and EUR data out earlier this evening.
These choppy markets are best navigated by either trading off bounces (not for me) or by trading from shorter time frames. There is simply little, or no, follow through for trend trading off the longer time frame 4 hr charts. You just need to accept that and roll with it.
Tuesday 17/4 (4.30 pm)
The indices are still bouncing around without any clear cut clue as to the main trend.
I almost have a signal to SHORT the A/U but would be loathe to take this unless there is a clear break, close and hold below the bottom trend line and a clear and concise return to 'risk off'.
I almost have a LONG on the USD/SGD too.
I am away from my computer for a few hours.
The USDX is bouncing back up a bit off the 79.50, 4 hr 200 EMA and monthly pivot levels; nothing new here!
I don't have any new TS signals. I don't expect any on the 4hr charts until there is a clear break through and trend on the indices.
Price on both indices has barely moved since my 6.30 am post. I've spent some time this morning looking at the main pairs I study and made some observations. Price is range bound on many pairs making trend trading on longer time frames all but impossible:
E/U: price is bouncing between the 1.3 and 4hr 200 EMA levels.
A/U: price is trading between bottom triangle trend line and the 4hr 200 EMA
A/J: I have re-drawn trend lines for this triangle pattern to reflect new resistance. I won't short this pair and will only look to long when signals and trend line breaks arise.
G/U: trading within a descending wedge supported by 1.58 level and held by triangle bear trend line.
Silver: bouncing sideways.
Gold: bouncing sideways.
Tuesday 17/4 (6.30 am)
The USDX has bounced down from its key 80 level on the results of some good data out of the US overnight, as suspected.
These are tough markets to play on the 4 hr charts as there is little follow through. This is mostly due to the fact that the USDX is literally bouncing off the margins of an ever increasingly tight triangle as it nears closer to its apex.
These markets, yet again, are ones more suited to trading from shorter time frames, during high liquidity, or by trading off bounces. The former doesn't suit my lifestyle and the latter doesn't suit my trading style! I make this observation often BUT it is important that traders realise when their trading regime works in the markets and, when it doesn't. For me, at the moment, trend trading on 4 hr charts, especially from the Asian trading zone, is challenging if not impossible. I'd be quite ok though if I traded from a different zone and off shorter time fame charts. Trend trading from the 15 min charts yielded good pips overnight from very simple and straightforward TS trades on the popular trading pairs. Only small stops would be needed for these trades too so the risk : reward ratios are excellent:
E/U: yielded 100 pips
G/U: yielded up to 40 pips
Swissie yielded 45 pips
Interestingly, the broader markets ended up mixed with the DOW up but the S&P500 down AND the Aussie pairs didn't get involved in the 'risk on' party overnight. Also, I don't have any new 4 hr TS signals yet. I'd be cautious with these anyway given the set up on the USDX.
Needless to say: I've cancelled my forward short orders!
I've placed some sell stop forward orders on the E/U and G/U, at prices beyond the key S/R levels (discussed below), in case the USDX keeps rallying and these pairs break down during my night.
The 'risk off' momentum has eased a bit and the dollar is only just hanging in above the break out 80 and trend line level. The trend could still go either way from this point. This could just be a re-test of the break out level before further up movement but, there also seems to be a real under-current of support for returning to 'risk on' though which has me cautious. I think we could see a return to 'risk on' if the USDX breaks back below the 80 level. There is USD 'red flag' news out later tonight and I think the slightest hint of any good news might also encourage a return to 'risk on'.
I had moved moved my stop to entry on the Swissie so have been stopped out on this long trade. The E/U and G/U have bounced off the key S/R levels I was watching for, at least for the time being that is. I missed the moves that these 3 pairs made starting back last Friday.
FYI: The Asian stock markets were down today but the US markets are up in pre-market trading suggesting risk appetite.
BTW: The A/U and G/U seem to be the pairs that would be closest to forming new TS LONG signals so I'll be watching them if we do get a return to 'risk on'.
The USDX candle closed looking more like an indecision spinning top than a pin bar reversal candle. As such, it's still looking more bullish to me.
I'm long the Swissie with a small stop just the other side of the trend line. I'll look to the E/U and G/U too as well if 'risk off' remains. These TS signals came in late last week though and have already given off pips so, I'm kind chasing these trades on the 4hr; the E/U has already given 100 pips and the Swissie over 60 pips since the signals late last Friday.
The USDX is currently forming a pin bar reversal candle on my charts. There is 1 hr before this candle closes though. I'll wait and see how this index evolves over that time. My 'risk off' trade ideas are still as per the 12 noon post if indeed the USDX keeps up with this rally.
Monday 16/4 (12 noon)
The indices have breached their key levels and, after breaking out with some momentum, have just started to pull back a bit. There is another hour before I have a 4 hr candle close on my indices charts so, I will be watching to see if they can close above these breakout levels.
My preferred 'risk off' trades are the:
~ E/U on a break of 1.3. My TS signal for this pair came through last Friday whilst I was away and has already delivered up to 100 pips!
~ G/U on a break of 1.8
~ Swissie on a hold above the triangle break...yes...the Swissie!
I have had TS signals on the above pairs BUT they are all approaching such key levels of S/R that I want to see these breached before I would trade them. They could just as well bounce back up from these levels, as they have done in the past. Interestingly, I don't have good TS signals on the A/U or A/J just yet but they may well develop over the next 4 hr candle. There was talk on FX Live though of strong buy orders around the 1.031 level for the A/U.
Monday 16/4 (10am)
My indices charts have now opened and the USDX is butting up against the 80 level whilst the EURX is struggling to keep above the 103 level.
I am still waiting until the 12 noon candle close here before considering any trading. I want to see if these levels on the indices can be breached. This will give me more confidence to trade 'risk off'. Some TS signals are beginning to form up now too, although, the E/U short came through last Friday whilst I was away for the weekend and is well under way now.
I am waiting until at least the 12 noon candle close here before considering any trading. My indices charts will be open by then as well.
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