Forex Analyst Picks & Strategies
October 8, 2015
My Picks: Short EUR/USD
Market Condition: Retracement
Bias: Sell EUR/USD
Entry: 1.1250 – 1.1350
Stop Loss: 1.1460
First Target: 1.0970 where this anticipated wave lower would equal in length the Sept 18-22 wave lower
Second Target: 1.0833 where this anticipated wave lower would equal in length the Aug 24-Sept 3 wave lower
Third Target: Open – we’ll reassess if we get close to 1.05
Risk Management: Move the stop loss to 1.1325 on a move below 1.1210
(Click on the chart to zoom in; after zooming in, press the play button towards the right to set the market in motion)
It appears the jump higher this afternoon on the release of the Fed Minutes was enough to clear out the chop and slop higher for EUR/USD. If so, the EURUSD is ripe for an aggressive move lower that likely tests 1.1000 and possibly lower levels.
An aggressive move is anticipated based on the Elliott Wave model projecting a possible continuation of the wave 3. Third waves tend to be the strongest and longest. Therefore, we look for this leg to have similar proportion in length to the previous down moves of late August and late September.
Though we never know for sure if the move lower will transpire as a third wave or if prices continue to elevate higher. If higher prices do ensue, the next level of wave relationships show up in the 1.1380-90 area.
From a timing perspective, Kristian Kerr warned of a budding negative bias in the pair as the 1x2 Gann angle was tested this week. See his piece below.
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October 8, 2015
My Picks: EURJPY Offers Attractive Risk: Reward Bias toward September 4th Lows
Point to Establish Short Exposure: Close below 134.40 (Weekly Open Gap / TL Drawn on Closes)
Target 1:133.15 September 23rd, 2015 Low
Target 2:132.15 September 4th, 2015 Low
Invalidation Level:135.80 is 61.8% of 9/17-9/22 Range as Invalidation
What happened to the JPY? After August 24th, it appears to have had a hard attack or to have gone on vacation against the USD. In fact, USDJPY is currently posting its narrowest Volatility Band range in over three decades. The last few times we’ve seen this narrowing on the JPY, the subsequent breakout was worth at least 2.5%. Another recent example is SPX500 that set the narrowest Volatility Band range since 1993 this summer before breaking down aggressively. A similar move could bring amazing JPY strength.
EUR, on the other hand, has its own set of worries. In a word or two Quantitative Easing, which the ECB may embark on this quarter due to the weakness in Germany and “developments abroad.” This combination of no volatility in the JPY and potential ECB action makes EURJPY specifically interesting. However, it’s worth noting there is also the hope of more BoJ action. This central bank anticipation is why the trade is shorter term in nature.
Due to Ichimoku, we prefer to fade upticks while the daily cloud caps price and look for a move lower towards support in the 133.15/132.15 area. Move below would signal downside towards our targets near the 132.20 range lows and then further out towards 129.30. Nearby resistance is at 135.85.
EUR/JPY remains in S-T downtrend below multiple DMA resistance
2nd resistance: 135.91 55-DMA / Ichimoku Cloud Resistance
1st resistance: 135.63 Oct. 7 high
1st support: 133.15 September 23rd, 2015 Low
2nd support: 132.15 September 4th, 2015 Low
EURJPY likely would be without much support from a strong drop if we break below 1.33/132 zone. This significant Volume at Price zone is worth watching if we put further pressure due to JPY strength. . Considering the macro backdrop (e.g. risk-off as Emerging and Developed Markets recede economic growth), a break below this level, most notably 132.15, could open the floodgates of JPY buyers.
October 2, 2015
My Picks: Sell EURUSD
Market Condition: Consolidating Triangle
Target 1: Triangle Support 1.1100
Invalidation: Bullish Breakout Above Resistance
EURUSD 1Day Chart
(Created using Marketscope 2.0 Charts)
The EURUSD continues to trade inside of a descending triangle, after today’s NFP news event failed to produce a breakout. The triangles line of resistance is formed by connecting a series of lower highs, starting with the August 24th high found at 1.1714. Price is currently trading at resistance, which is now found near 1.1300. A retracement from this value would potentially expose a move back towards support near 1.1100.
In the event that prices move above resistance, this suggests that the EURUSD is attempting to breakout towards higher highs. In this instance, price action would invalidate the current triangle pattern.
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October 1, 2015
My Picks: Looking to buy GBP/USD early next week
The 61.8% retracement in time of the July 2014 - April 2015 decline earlier this week failed to elicit much of a response from GBP/USD. Focus now turns to the first part of next week as it marks a convergence of several key geometric timing relationships including the 261.8% extension of the time between the April and June lows, the 161.8% retracement of the time between the April low and June high and the 61.8% extension of the time between the June and August highs. This confluence of different timing relationships increases the possibility of a reversal in my view and key levels of focus for me heading into the window will be the 61.8% retracement of the April – June advance at 1.5085 and the median line of the June high near 1.5045. The 1.4880/60 area also looks like a potentially important support area as well if the decline gets more aggressive into the timing period.
Looking to buy GBP/USD around the support levels mentioned early next week (Tuesday).
October 1, 2015
My Picks: Short AUD/USD, NZD/USD, GBP/USD
My long USD/CAD position was stopped out as a pickup in risk appetite into the end of the third quarter drove the risk-geared currency higher. The dominant trend remains bullisih however and I will monitor positioning for a new entry opportunity.
Other active trades:
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September 30, 2015
My Picks: Long NZDUSD
Despite recent carnage in the commodity sector, the NZDUSD low from 8/24 remains intact. In fact, the rate is going to make an inside month and the month's range is the smallest since August 2014. Like dojis, narrow range bars (NR) indicate indecision and are useful reference points. Even if this is just consolidation before another move lower, risk is well-defined. I do think that the move is higher though.
For more analysis and trade setups (specific entry, stop, target, etc.) visit SB Trade Desk.
September 22, 2015
My Picks: Pending Long GBP/NZD
With USD-pairs in tumult, the GBP-crosses may be the simplest way to find exposure to a currency with a hawkish central bank. Ideally, we'd be looking to pair the GBP with a currency whose fundamental backdrop is eroding, and immediately three pairs come to mind: GBPAUD, EURGBP, and GBPNZD. Our focus today is on GBPNZD.
GBPNZD Daily Chart: June 2015 to Present
GBPNZD may be on the verge of its next leg up in its multi-month channel. The recent consolidation over the past three weeks has resulted in an ascending triangle after an uptrend, a potential bullish continuation pattern. While ascending triangles can occur at the bottom of a downtrend (signaling a reversal), regardless of where they occur, ascending triangles are usually bullish patterns.
Confirming the bullish potential higher are momentum indicators. With Slow Stochastics and MACD trending higher on the H4, daily, and weekly timeframes (and in their respective bullish territories), "full time frame continuity" exists that favors a bullish move shortly.
With the Bank of England offering more hawkish commentary of late and with the Reserve Bank of New Zealand reigniting its dovish policy burner, the fundamental bias may be higher in the pair over the near-term. In context of the combined fundamental and technical influences present, there's sufficient fuel to see follow through on a GBPNZD breakout to the topside.
Trade Idea: Long GBPNZD
Entry: 2.4630 or above
Stop: 2.4040 or below
Risk: -590-pips (or more depending upon exact entry/stop)
Target #1: 2.5200 (channel top one-week from date of publication) (+570-pips)
Target #2: 2.5550 (ascending triangle measured move) (+920-pips from 2.4630 entry)
--- Written by Christopher Vecchio, Currency Strategist
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July 15, 2015
My Picks: Sell gold on close below 1150
Gold is testing a key trendline as it's remained in 'neutral' territory for its longest stretch since 2010. A breakdown targets a much larger decline and a resumption in the multi-year downtrend. I like getting short on a daily close below $1150 with initial targets at March, 2010 lows of $1040. Max risk on the position would be a daily close back above key trendline support at $1150.
Comment and view the chart live update here at this link: http://www.dailyfx.com/charts/tradingview/view?id=kuPrcaGM
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