Marc Walton on May 18, 2013
Hi, a couple of videos for you this week and a note to say that it is important that you watch the videos, not just read the notes.
I had emails from members and private clients who were disappointed to
miss a short on the Aud & Gbp which both went 100′s of pips and yet I
had covered the subject in great detail, including my entries in last
Sundays video analysis. I had explained in the write up that were lots
of possible entries on the Gbp/$ for instance but I can go into far
greater detail in the videos and I can’t write everything in the notes
because they would be the size of a small novel!In this first video I recap on the previous weeks trades including how I explained that although I was hoping for a pullback on the Aud, a clear break of parity (1:1) on the Aud would see me wanting to short at a pullback to 0.9990 (1.000 -10 as always). One of my private clients was disappointed to miss the Aud because price didn’t pull back to the Earth & SKy zone. Two things to note here: If you are only trading 1 system and nothing happened and you walked away, well done. You followed your rules. However if you want to be able to trade on a more regular basis then you need to learn to be flexible.
What happened? It worked on a daily chart to the pip and gained 300 pips! One trade and more than half a months profit from a move I had pointed out last Sunday. The week before I showed you why I was looking to long the Cad just above parity at 1.0020, that trade is currently 250 pips in profit from a single trade off weekly charts analysis.
The thing to note here is the importance of parity and major whole numbers. These numbers are HUGE. Why? Because every single trader around the world is, or certainly should be, aware of it! Fibs are subjective, emas differ from one platform to another, as do candlestick formations & therefore different traders will have them in slightly different areas. Parity is the same for everybody and therefore it over rules other analysis. Whole numbers are also important. I remember years ago the Gbp hitting 1:2 $USA another huge number.
Less important, but still something you should be aware of are numbers like 1.5000 on the Gbp/$, 1.300 on the Euro/$ etc etc.
Here is the first video: http://youtu.be/3HBEmxpSb7o
The Forex Week Ahead
Another week were there are multiple opportunities on many pairs. $USA strength continued across the board last week even when negative news came up. Usually when this happens its a case of sentiment having changed rather than logic. Has the $USA’s debt mountain gone away? Nope, its not even stopped growing at a rate of $Billions per day, but the markets doesn’t seem to care. Often when this happens it takes a major, unexpected news announcement to bring about a change so pay extra attention to big $ news this week, especially the FOMC and Bernanke’s speech on Wednesday. There are rumours that changes to QE could be on the way, THAT could really rock the $.
Spanish Bonds: I live in Spain and was forecasting last year that Spain would need a bail out due to the fact that the situation here is much worse than advertised. The bail out “wasn’t needed” in the end. In reality Spain received a bail out by another name. The money went directly to Spanish Banks (the first of many Directors went to jail this week) rather than the other PIIGS countries where the money went to the Government first with all the harsh strings attached.
I believe that this happened because Spain being the 4th largest economy in Europe was too big to fail and they held out against direct austerity measures. This was more to do with Spanish machismo than anything else. The country is on its knees. 30% adult and +50% youth unemployment and things are getting worse. As a result the ratings agencies are rumoured to be reducing Spanish bonds to junk status THAT will cause a huge sale by existing holders and a run on the Euro is likely.
Technically we have clues that some major falls are due on the Euro as well (see the video)
Monday is a European and Canadian Bank Holiday and therefore many traders will be missing from the markets so be extra careful with those currencies.
If the $USA suddenly turns it will do so against all pairs so only be in one trade at a time until you have stops to entry.
Gbp/$: I said last week that this pair was at a “Crucial area.” and I pointed out in the video lots of potential entries on multiple time frames, its the same this week. From longer time frames my preferred, forward order trade is to short at 1.5330 once more for multiple reasons.
However this pair has a lot of potential smaller time frame trades. Price is currently stopped at a weekly double bottom.
On the 4 hour we have a clear down channel which when fibbed gives 1.5230 as a possible 50% pullback zone for a short and that coincides with a daily support and resistance line so I will look for 4 hour clues to short there ( I made a mistake in the video but 1.5230 is correct).
Euro/$: Prefer over the Chf this week unless major pullback on that pair. There is a monthly potential 2000 pip brewing and a weekly 720 pip head and shoulders potential move and we are in the neck line zone right now!!
The head and shoulder entry will be a break and close below 1.2790 followed by a pull back – explained in detail in the video.
Intraday we have a 4 hour channel with 61.8% fib and 1.2875 is the area for a possible pullback short. 1.2900 was strong daily support so added confluence.
Euro/Gbp: Price continues to bounce between 0.8500 (won again last week) and 0.8400 those are the areas for bounces. When they eventually break I will look for M2 break out pullbacks.
Chf: Missed my entry at 0.9510 last week by 10 pips and went 200 which was not pleasant, this week I am looking at 0.9550 for a pullback. Another option is a break and close above the weekly 200ema but I will leave that for now.
Aud: Break of parity, M2 short worked to the pip last week for 250 pips, see the video. Another pair with numerous possibilities this week including a (not recommended for new traders) bounce back up at 0.9600 for multiple reasons, explained in detail in the video. Nothing less than a 4 hour chart for that trade for me. If it breaks and CLOSES below there and gold and silver go as well, look for M2 break out pullback on DAILY chart candle close only.
Intraday a pullback to 0.9800 will also be interesting to short. Finally if it roars back up then a further short at parity for all the reasons stated above.
Aud/Yen: Watch the Aud closely, if it continues to drop then this will break, watch 100.00 for a bounce back up from 4 hour charts, worked Friday but I prefer the Euro/Yen at the moment.
Euro/Yen: Bounced repeatedly off the monthly 200ema last week at 131.00 so interested to long at a pull back there.
$/Yen: I am only interested to long, 100 is the place for a pull back after a major move up. More aggressive entry is long at 101.60 or break and close above monthly 200ema around 103.00 not for me.
Cad: “Neutral” – this is expert speak for “I have no idea”!
250 in profit from Parity bounce 2 weeks ago, leaving alone.New members please note: If I am looking to take a trade long, at for example 1.6000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself. For more up to the minute updates do not forget to drop by the forum
Pierre, Vassilis (Capsmart), Raa, Omar, Mary, and other experienced members will be available in the forum to give you a more up to the minute assessment & whether they see any potential trades lining up in the next few days. Many members tell me this is the best forex forum there is (no back biting & bitchiness, nor spam, that spoils most forums) and all members are happy to help new visitors. Its a great resource, USE IT: Forex Forum
To View the Video click here http://youtu.be/8p3eVLdL_gA