Analyst Picks

Jeremy Wagner , Head Forex Trading Instructor

My Picks:  Short AUD/USD
Expertise:  Elliott Wave, Technical Analysis
Average Time Frame of Trades:  2 Days - 2 Weeks

After a strong sell off in 2013-2015, AUD/USD began to consolidate those losses in September 2015. During that time, we have seen open interest in trading the pair slowly drift lower as the trend quieted down.

For the past 3 months, AUDUSD has quietly carved two bearish patterns in a row which offers an opportunity to position short.

Market Interpretation: Retracement

Bias: Short AUD/USD

Entry: Near .7520 - .7600

Stop Loss:Near .7680 (-80 to -160 pips)

First Target: .7000 (+520 pips)

Second Target: .6500 (+1,020 pips)

There are 3 charts below that work off one another.

First, we can see on the daily chart below, from September 2015 to April 2016, AUDUSD carved an A-B-C expanded flat correction higher. It is an Elliott Wave pattern that suggests the whole pattern is likely to be retraced at some point in time in the future.

AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

Secondly, as price chopped through the A-B-C correction, open trading interest in the pair plummeted. Traders typically try to pick tops and bottoms. However, they also tend to chase after tops in bottoms in strong trends. As AUD/USD consolidated, their interest in trading the pair waned.

AUDUSD Open Interest Quiets Down

AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

Then, beginning April 21, 2016, an impulsive wave formed to the downside followed by a three wave corrective move higher. This 5-3 wave combination, especially when it starts a new trend, can be a good pattern to trade strong risk to reward ratio opportunities from.

We highlighted this bearish potential on June 27. That is the first bearish pattern that suggests lower prices to retest .70 if not lower.

Now, from the July 14 high, it appears we are in the latter stages of another smaller degree 5-3 bearish pattern. If this outlook holds, then AUD/USD would be at risk of falling hard in a 3rd of 3rd wave lower. Third waves tend to be the longest and strongest of the Elliott Wave sequence. So it is a force that is recognized when it occurs.

AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

Therefore, we’ll use any bullish strength into .7520 to .7600 (see above) as an opportunity to short the pair. Other commodity currency pairs like NZD/USD may follow suit as well.

So the first bearish pattern carved from April 21 – July 14. The second bearish pattern is in its final stages with a bump higher.

This trading opportunity includes a positive risk to reward ratio as we are risking 160 pips to target 520 pips (first target). We discuss this as one of our Traits of Successful Traders in pages 3-9 of our TOST guide. Grab it here.

Interested in a quarterly outlook for USD? Download our quarterly forecast here.

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

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Check out the latest standings for the FXCM trading contest HERE.

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Walker England , Forex Trading Instructor

My Picks:  USD/JPY Pending Daily Breakout
Expertise:  Technicals
Average Time Frame of Trades:  1 Day - 1 Week

Market Condition: USD/JPY Pending Daily Breakout

Target 1: 1X ATR148 Pips

Target 2: 2x ATR296 Pips

Invalidation: Continued Consolidation

USD/JPY Daily Chart

USD/JPY Closes the Week with Consolidation

(Created using Marketscope 2.0 Charts)

Last week we discussed the emergence of an inside bar on the daily GBP/USD chart. Today, we have a similar pattern emerging as the USD/JPY is set to close the week with a consolidating inside bar. Using Thursdays’ daily candle as a reference, resistance for USD/JPY may be found at a price of 107.49. Support may be found at 105.41 by referencing Thursday’s low. If prices close the week between these values, traders may look for a potential breakout starting with next week’s open.

Traders should note that ATR for the daily USD/JPY graph measures at 148 pips. Traders may use a 1X ATR extension to find initial bullish or bearish breakout targets. 50% of daily ATR measures 74 pips and can be used to create a 1:2

Risk/Reward ratio for any attempted breakout.

In the event that prices fail to breakout, traders may elect to trade the continued consolidation between the previously mentioned values of support and resistance.

To Receive Walkers’ analysis directly via email, please SIGN UP HERE

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Jamie Saettele, CMT , Sr. Technical Strategist

My Picks:  Short crude oil until at least 42
Expertise:  Technical
Average Time Frame of Trades:  Swing

Since breaking down on 7/7, crude has former a triangle which appears on the verge of breaking down. Also, a parallel that crosses inflection points since February 2015 (magenta line) has provided resistance the last 2 days. The measured move from the triangle would be 41.91, which is in line with the March 2015 low at 42.01 and March 2016 high at 41.87. The slope I am operating on is based on the 2013-2014 trendline.

This analysis and chart appears in today's SB Swing Update. For more, visit SB Trade Desk.

Please add a description for the image.
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Michael Boutros , Currency Strategist

My Picks:  Near-term Setups in GBPJPY, GBPUSD & USDCHF
Expertise:  Near-term Technicals
Average Time Frame of Trades:  1-2Days

Post-Brexit setups are in focus as we get a flurry of UK economic data this week. Here are the trades I’ll be following into the releases and setup’s we’re currently tracking on SB Trade Desk.

GBPJPYHighlighted this setup in today’s scalp report- Heading into tomorrow’s UK employment read the pair remains at risk for further losses here after the pair failed to hold above up-trend slope resistance. (also note that daily momentum failed to mount-50). This suggests that the immediate risk is weighted to the downside with a near-term Fibonacci support confluence eyed at 137.64/92.

GBPUSD 60min

Near-term Setups in GBPJPY, GBPUSD & USDCHF

GBPUSD- Sterling broke below slope support on continued USD strength and the pair remains at risk for further losses near-term while below confluence resistance at 1.3165/82 (also the weekly open). Now testing interim support at 1.3090/99 with a break lower targeting 1.3055, 1.2999 & the 100% extension of the decline off the monthly high, at 1.2965. Review Latest GBPUSD Update

USDCHF- Swissy has traded back up into the 9863/80 Fibonacci resistance zone highlighted last week. This level remains our near-term bearish invalidation mark and a breach higher is needed to keep the long-bias in play targeting 9906, the May high-day close at 9921 & 9946. Bottom line: the pair is vulnerable while below this level with interim support seen at the weekly open. A break below the April high at 9797 needed to suggests a more meaningful correction is underway. Review Latest USDCHF Update

Continue tracking all these setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!

Looking for more trade ideas? Review DailyFX’s 2016 3Q Projections

---Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or ClickHere to be added to his email distribution list

Join Michael for Live Scalping Webinars on Mondays on DailyFXand Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET)

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James Stanley , Currency Analyst

My Picks:  Long Gold
Expertise:  Price Action + Macro
Average Time Frame of Trades:  Few Hours - Few Days

We’ve been discussing a long Gold setup in our technical analysis pieces with eyes on catching a deeper retracement before triggering the top-side position. In our last article, we looked at RSI divergence showing the potential for a deeper retracement. Price action worked on a support base around the $1,330 level throughout the week, and now Gold has begun to breakout on varying news reports around a coup taking place in Turkey. Given the extreme geopolitical risk being seen of late, the long Gold trade could get some continued top-side run, and we're triggering the position ahead of the weekend close.

The position can be opened at market with stops set to approximately $1,318 in order to get risk levels below the prior price action swing-low. Targets can be set to $1,359.41, followed by $1,375.04, and should Target 2 be met quickly, a tertiary target can be cast towards new highs at the psychological level of $1,400.

Long Gold at Market

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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