Poor data out of China has sent the Aussie pairs down today. The big move has triggered a TS short signal on the A/U and one is trying to form on the A/J.
The USDX has yet to get over its resistance levels though:
The USDX is still struggling at the 82.65 area: a fib level, weekly and monthly pivot plus 4hr 200 EMA:
I suspect that the making or breaking of this level will determine whether we move 'risk on' or 'risk off' from here on.
Hopes of further stimulus stemmed the fall of the EURX too much. There was more choppy action again with price still stuck near/in the clouds:
The USDX is back to a significant area. It is tucked under the 4 hr 200 EMA, monthly pivot and the 82.65 level which is that 61.8% fib retrace from the last major swing high:
Last April when we had similar choppy action I noted that 30 min charts are often safe to deal with. This was the case again overnight with the E/U giving a good 50 pip trade off the 30 min charts during the US session:
There are two other charts worth noting today though. The A/J and the Loonie:
A/J: a look at a compressed daily chart shows how price is near to breaking and closing above a significant previous S/R area in the 83 level. A break, close and hold above this level would be quite bullish. The chart also looks like it could be forming a bearish Head and Shoulder pattern though too. So, if the 83 level can't be broken then we may be on for a big fall here as price tries to finish forming the final shoulder (see chart). So, the 83 level is of particular interest to me! I have no idea which way it will go but I will be watching it closely for new trend signals. I would probably be loathe to short an Aussie pair though given the relative strength of the Aussie economy and also given thoughts of further easing. That's just me though!
The Loonie: I have been pointing this technical pattern on the Loonie out for some time here now. I actually made a mistake last week when I noted that the Loonie didn't form a new TS signal with the big moves last Friday. Well, it did and it has kept on going and is now trying to break a significant trend line of a symmetrical triangle on the weekly chart that dates back to October last year. The move since Friday has only gone on for 60 or so pips but the trend line break, if it evolves fully, could spell a significant new move for the Loonie:
We're getting some big moves down on the EURX at the moment:
I don't have any TS signals just yet though. They might kick in overnight.
We're still stuck in the cloud:
The currencies continue to chop around. I don't have any TS signals.
I'm loving the fact that I've found the Ichimoku Cloud! It's keeping me from getting whipped around in these choppy markets. There aren't any 4hr TS trend signals though anyway but, even if there were, I'd wait to clear the cloud first!
US stocks bounced sideways last night as did the currencies. I suspect that this choppiness will remain whilst price on the indices is stuck in/near the daily chart Ichimoku clouds:
The 'risk on' signals petered out sideways too. I won't be taking any signals until these 'clouds' are cleared, up or down, and until I get more conformity amongst the pairs.
Wednesday 8/8 (8 pm)
The EURX has broken back down below the 4 hr 200 EMA:
I have had a few 'risk off' signals form: E/U, E/J, A/J, USD/SGD and the Swissie.
Wednesday 8/8 (6.15 pm)
Still no full TS signals have formed. This reminds me a bit of last April when the markets were choppy. The USDX daily Ichimoku Cloud chart offers a good reason for this:
No new signals yet. EURX still hasn't closed below the 4 hr 200 EMA either:
I'm starting to get some 'risk off' signals trying to form up on a few pairs. I'd be reluctant to take these if they do form though with the EURX now holding up above the support of the 4hr 200 EMA:
I'd prefer to see this support fail before taking any new 'risk off' signals. Also, Asian markets are up, yet again. It seems to be 'risk on' for stocks but not for currencies......weird! I'm blaming the Ichimoku cloud...weird things happen when price is near/in the cloud!
US stocks finished higher and above significant psychological levels. Currencies continued to bounce around though, with many of them approaching significant trend line breaks (see last night's post for charts). The EURX has closed above the 4 hr 200 EMA but is just hanging there as if it doesn't know what to do now:
The Ichimoku daily charts show how the 'cloud' resistance on both the EURX and USDX is proving to be a challenge for further 'risk on' movement:
I've been warning for some time that, based on this Ichimoku cloud resistance, we could be in for some choppy trading sessions. Past experience back in April taught me this! So, even though the EURX has closed above the 4hr 200 EMA, I will be very cautious taking any further trades, especially 'risk on' signal trades.
BTW: I've closed both my trades out.
Tuesday 7/8 (7 pm)
It seems that 'risk on' is creeping back into the currencies. There are a few pairs building up for possible and significant trend line breaks that might provide some good entry opportunities. Price could just as easily bounce back off these key levels but they are certainly worth watching!
The Swissie: a significant bull trend line, dating back to July last year, is just under current price:
The E/J: this pair is trying to break above a bear trend line that dates back to March this year:
The Loonie: price is fast approaching the bottom trend line of a symmetrical triangle dating back to October last year:
Murphy's Law is alive and well...all the signals are kicking back into life. I'll keep an eye on them for the heck of it.
Asian markets all traded up again today. The 'risk on' approach is still not flowing into the currency markets though. This positive sentiment will have a tough time cutting through resistance evident in the daily Cloud charts on both indices:
The markets could move either way from this point. I'm 'closing' the remainder of the other hypothetical TS signal trades out for the sake of administration. These values are based on their current position compared to the time of the signal on Friday; E/U +15, A/U + 20, USD/SGD +5 and Swissie + 10. From earlier this morning: E/J: 20 pips, A/J 30 pips, G/U 35 pips. Thus, the net result from signals so far this week is -35 pips.
I'm still in my 2 trades though.
I'm still in my 2 trades though.
Tuesday 7/8 (7am)
'Risk on' flowed through all of the stock markets yesterday but currencies mostly bounced sideways. The EURX has still not made it up over the 4 hr 200 EMA:
You can still see how the daily Ichimoku cloud is helping to support price on the USD:
I would not enter any new trades until the EURX either makes or breaks the 4hr 200 EMA. I had said this in my w/e update and wished I'd followed my own advice. My two trades are still limping sideways though. In fact, some of the signals from Friday are trading positive: E/U, A/U, USD/SGD, Swissie and NZD/USD. The ones in negative territory aren't down by that much either but could be exited now for a small loss: E/J: 20 pips, A/J 30 pips, G/U 35 pips. None of the signals hit the 100 pip stop loss level either.
I am very mindful of April this year when 4 hr trend trading was whipped around. The current daily Ichimoku cloud charts are indicating that we just might be heading for some more of that. Hence, I'm watching these cloud charts closely.
The EURX has not made it up over the 4 hr 200 EMA:
The daily Ichimoku USDX chart shows the support being afforded to the USD:
We could be in for some choppiness. European stocks are higher following the lead from Asian markets earlier today. It's all a bit odd really.
New TS signals might be a bit of a way off if we do return to 'risk off'.
Stock markets have rallied across Asia today but this hasn't been matched by the currencies. I had pointed out the Ichimoku 'cloud' charts over the w/e and earlier today. The USDX is currently bouncing up off its daily cloud. This could prove to be a deal breaker for further 'risk on' trading. 'Risk on', if it does continue, would probably be choppy:
I had said I'd wait to gauge market sentiment before trading but, like I tend to do, I jumped in early. I'd also said I'd wait for the EURX to clear the 4 hr 200 EMA before taking 'risk on' trades. This has not evolved as yet either:
Many of the signals have faded from their Friday trigger entry points and are now back to entry levels. I wouldn't take any new trades just now.
I may regret my earlier trades. Time will tell.
Anyway, if market sentiment turns back to 'risk off', I'll jump into these new signals when they come too.
I may regret my earlier trades. Time will tell.
Anyway, if market sentiment turns back to 'risk off', I'll jump into these new signals when they come too.
Stock markets across Asia are up so far but the currencies, whilst having an earlier burst of 'risk on' are back to near open levels. The USDX is going to find support here, no matter what else, from the Ichimoku daily cloud and, conversely, the this cloud will provide resistance to the EURX. The EURX is also currently struggling against the 4hr 200 EMA:
There are some long legged Doji candles, and other reversal type candle patterns, around after the first 4hr close. Even so, with the usual lolly shop problems, I've taken two trades.
I'm out for a while this afternoon and will update later.
I'm out for a while this afternoon and will update later.
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