Friday, March 7, 2014

Trading Week 03/03/14 Tech patterns triumph!

Fri 7th March (6.30 am)
Technical patterns seem to be triumphing across a number of pairs. The E/U is currently setting up under a major triangle trend line and traders need to be on the lookout for any possible triangle break.

Indices: some positive data and optimism have boosted risk appetite across currency trading and lifted the EURX at the expense of the USDX:


S&P500: still consolidating at the new high:

Indices and Ichimoku Alignment: the Forex indices are once again aligned in 'risk on' across the 4hr and daily time frames. Such alignment does not always indicate decent follow through but it is worth noting as some periods evolve into long running trending periods:

EURX Ichimoku: trading above the Cloud on 4 hr and daily time frame:

USDX Ichimoku: trading below the Cloud on the 4hr and daily time frame: 

Forex: Euro pairs have finally got their mojo back and have started to move again.

E/U: The more optimistic tone with ECB has helped to lift the EUR. The E/U has now rallied and is sitting above major resistance. A close above these levels would be very bullish and suggest continuation. The E/U is currently sitting above the 'triple top' region and the the major 61.8% fib level of the 2011-2012 bear move. It also now sitting just 80 pips below a major triangle trend line that has contained price since 2007! Traders need to be on the lookout for any technical triangle break here as the suggested move from any breakout is of the order of almost 3,000 pips! The theory of these breakouts is that the height of the triangle represents the possible target for any breakout move. This quoted target is even a bit conservative though as I measured the triangle height from just near the 2011 region.

E/J: I had posted an extra article about this pair during the week. I mentioned the possible triangle break and how any such break would result in the E/J moving above the Ichimoku Cloud across the 4hr, daily, weekly and monthly time frames; a most bullish development. This technical triangle break has now evolved. The move so far has yielded almost 200 pips! I suggested the first target for any bullish move would be the 143 level and price is sitting just under this level right now! I do believe that this pair might now aim for 100% retracement and head to the 170 region:

Aussie: the Aussie has enjoyed some positive data and general mood of optimism and has rallied to trade above the resistance of the 0.905 level. This level is the 'neck line' of the bullish 'inverse H&S' pattern on the daily chart. There is AUD news later this morning that might impact here BUT a daily close above this level for Friday would suggest bullish continuation. The 'height' of the H&S pattern is just over 380 pips and this would suggest that any bullish continuation would extend by the same number of pips above the 'neck line'. This would suggest a target for any follow through might be up near the 0.945 region.

A/J: this bullish inverse H&S might be forming up too. Again, it might be better/safer to see what the RBA says today. I do note though that the TS signal from earlier this week, although not supported by the Ichimoku Cloud, has now yielded over 230 pips (signal candle marked with an arrow)!

Cable: is holding above the key monthly 200 EMA but hasn't move too far:

Kiwi: a bullish trading channel break continues: 

U/J: hasn't moved too far BUT the break and hold above the monthly 200 EMA is a major achievement in itself! 

AUD/NZD: this bullish 'inverse H&S' continues to shape up as well: 

GBP/AUD: as does this bearish H&S: 

There is some frustration here that many of these technical pattern moves have not evolved with TS signals. I continue to be on the lookout for any alignment of signals and technical breaks though.

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