Marc Walton on March 16, 2014
Here is my analysis for the Week Ahead: March is off
to an interesting start!! The markets definitely seem to be “alive”
and kicking, but that doesn’t mean all the trades are filling our
accounts with incredible pip counts. We are still looking very sticky on
many pairs, but some like the Eur/Usd and Usd/Cad (believe it or not)
are producing nice trades, while our die hard pairs that have been
awesome (gbp/usd and usd/jpy) have slumped a bit.This week, focus on what the market is showing us with pairs that seem clearer (Eur/Usd, Eur/Cad, Usd/Cad) and avoid pairs that look simply ridiculous (Aud/Usd, Aud/Jpy, Usd/Jpy). We have FOMC on Wednesday so BE CAREFUL!!! This is like “mini-me” for NFP and is THE mid-month announcement that tends to set the pace for the last two weeks of the month.
Euro/$: Triangle broken. Confirmed on the weekly for 2 weeks but we still don’t have a monthly confirm to verify this multi-year triangle break. When we look for big trades, we need big timeframe confirmation. In the meantime, 1.3825 area looks absolutely appealing for a long trade and 1.4000 for the counter-trend short trade. Focus on these two areas and check out the video for the “bigger picture” of what we should focus on on the pair.
Gbp/$: Geez. 1.6730 just seems to be a bully of an area. Price is now moving sideways after such a nice uptrend for so long. I am a one-trick pony on this pair and the only trade I would entertain is a clear break above 1.6730. Otherwise, I’m just leaving this pair alone. We can also short from this area, but the more times price comes slamming into it, the more likely it will finally give us a break. I hate when I see rejection a bunch of times, and then when I finally place a trade there, it breaks. So I’m just waiting for the break.
Aud/$: This pair is a tale of two pushes. Weekly chart appears to be bullish……sort of. We have reason to think this pair will go up, BUT we need a confirmed break above .9050 which we haven’t had yet. It keeps dipping below .9000 which would normally have me shorting this region, but price action has not been kind to that approach, so I’m just skipping that option for now. Leave alone until we see a clearer picture.
Euro/Gbp: Nothing to see here folks. This pair is absolutely silly for so long now. WE have come back to .8350 area but failed to break it. We could short if we move back below .8300 again for a “deja-vu” trade YET AGAIN. Otherwise, I would look to see a good, confirmed daily break above the 200 ema at .8350 before thinking about longing.
$/Yen: Don’t let the engulfing candles fool you, they are not being honest. We have reversal after reversal, and clearly a battle for domination is taking place as the “race to the bottom” continues between the BOJ and the FED. I don’t want to get involved so I am avoiding trading this pair until we get a clear break either above 103.75 or 101.50 keeping in mind, things get very messy as we move below the bottom area. I think it’s a good time to step aside, and let the central banks duke it out. We will be there to collect the pips from the winning side. Check the video for a deeper look into this pair.
Euro/Yen: Due to the fact that this pair has the Eur/Usd component in it, it looks slightly better than the Usd/Jpy. Look to long from 139.00 AGAIN, or a break above the monthly 200 ema at 141.45 area. Watch the daily 55 EMA as it has been a really great dynamic s/r on this pair lately and an indication of what it might do.
Aud Yen: If the Usd/Jpy and the Aud/Usd look silly at the moment, what can we expect of the Aud/Jpy??? A DANGER ZONE!!! Stay away from this pair. Although it certainly seems to be bouncing between well-established areas of s/r, we are not getting a clear picture of HOW those areas will work from day to day. If you simply MUST trade this pair, focus on 93.00, 92.00, 91.00 and 90.00 as your s/r areas to long and short from. Sure that seems simple enough, but price action can hurt you big time through those areas. I say avoid, avoid, avoid, until we get a clearer picture.
Usd/Cad: This pair has been very nice to me lately. I can’t believe I’m even writing that. Again, we focus on 1.1000 and 1.1175 as our areas to trade from. Staying with the trend places longs at 1.1000 which is a great combo of horizontal s/r and super-important 55 ema. A break above 1.1175 gives me a great area to long from as well. Counter-trend shorts from this area are valid until it breaks. Go Loonie!!!!
Eur/Cad: Good grief. A stronger uptrend, for longer I’m not sure I have ever seen. Once again, the Eur/Cad looks strong to the upside, and above 1.5300 we have SEVEN HUNDRED pips of CLEAR trading!!! Look to long from this area, and give it some breathing room to potentially take us on a very nice move up. Check the vid for the total picture!!
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!!!