Marc Walton on February 2, 2014
Omar has also posted a very important article on the subject of risk which you will find directly beneath this one: You Risked How Much! & he will update you about his “Groom Project” in the forum & guest blog area.Here is his analysis for the Week Ahead:
The winds of change blustered through to finish our first month of 2014. Although we saw different forms of news catapult many pairs quite a ways, it happened in a volatile way. Looking at the market in general, we are seeing many things that are normally in synch, not be. Keep an eye on bollinger bands as I try to point out in the video. Moves, large as they may be, might not be telling you the whole story. Tread SUPER cautiously this week, as it is NFP week. That aside, it seems that the trading session we have been looking forward to, is starting to get in motion!! Let the market lead, and follow along to scoop up the pips (as dog owners can understand immediately!). Try to make your move early in the week and then be done to watch the potential NFP fireworks from the sidelines.
Euro/$: Oh the Euro!! Finished the week with an even larger range for the 4th consecutive week. The bollinger bands tell a story of liquidity drying up though!! This pair concerns me, although it does appear that the bearish argument is getting stronger by the day. In this week’s video, I go into quite a bit of detail over this pair and all the nuances I see at the moment. 1.3485 will be the first major area to watch, as CT traders can look to long here. A break below this area and shorts will be the best way to go. A move higher to 1.3715 has me interested for a short from this area, or a change to bullish outlook if this area is breached to the topside. More Details Explained in the video.
Gbp/$: Doesn’t seem as bearish as Eur/Usd but still might be heading down. Look for shorts 1.6510 on a pullback. Longs at 1.6300 which has been a huge area in the past. Breaks below 1.6300 and this area becomes key for shorts.Daily 55 EMA may be used as dynamic S/R for more aggressive trades on smaller timeframes. See the video for more!
Aud/$: Still looks very bearish to me. .8750 worked well before and that will be the area I focus on to start the week. Moves back to 8850 and eventually 9000 may also be areas to focus on shorts for trading with the trend. See le video!!
Euro/Gbp: Starting to look a bit clearer. Still looking bearish and once again, a move back to .8310 for a short is plausible. Our next area on the way down is .8150 and this will be an area to long for CT traders, although I prefer a break below this area for a short.
$/Yen: After some very strong bullish moves for a while, this pair finished the month and the week looking decidedly bearish. A break below 101.50 will be my ideal place to look for a short, but the monthly 200 EMA can be used for dynamic s/r to trade from for more aggressive traders on smaller timeframes. Keep t/p’s short as the BOJ will continue to try and push its currency down although technicals seem to suggest this pair is due for a fall, at least for a little while. Video for more explanation.
Euro/Yen: My favorite pair to trade seems to be coming back into focus again. Primarily a pullback to 139.00 for a short will be my main focus early in the week. The trendline is in the way on the way down but not for almost 200 pips from 139.00. A break below the trendline suggests a further fall to 135.50-135.00 so there is some room to make some good trades here. Seems to be the best for potential size of move. Let’s see if the market answers the call!
Aud Yen: Looking at this pair on higher timeframes, the moves seem regular and almost obvious, but trading this pair on a daily basis has been challenging over the last few weeks. We have fallen rather sharply from 93.60 and finished the week and the month below the crucial area of 90.00. This will be the first place I will look to short as there are multiple reasons to trade this area. Below is pretty clear all the way down to 86.25 so over three hundred pips if this pair obliges.!
Usd/Cad: After a remarkably strong January, this pair certainly looks bullish. Those of us who couldn’t long at 1.1000 may get our chance this week, as a pullback to this area seems likely at the moment. Below we may come back to 1.0850 but the pair seems awfully bullish to come back that far. Above we don’t run into any real resistance till 1.1700 so longs may get a chance to stretch their legs if we can get a nice move up from 1.1000.
Eur/Cad: My favorite of the Cad’s has been a gem lately. We are currently sitting at the major area of 1.5000 and this will be the first area of focus to start the week. Above we have 1.5300 for counter-trend shorts or continuation breakout M2 above this area. Below we could see a pullback again to 1.4800 if the Usd/Cad slides below 1.1000 in my opinion, but 1.4800 should provide excellent support if we get there.
New members please note: If I am looking to take a trade long, at for example 1.5000 , 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.
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Hope you enjoy the analysis!! See you Wednesday for an update!! Best wishes and happy trading to all!!!