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FX Pond, Weekly Analysis

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  • FX Pond, Weekly Analysis

    Meant to share market analyses of FX pairs. New posts will be made weekly which will contain articles and charts. Fellow traders will get an alternative perspective of the PA that they can compare with their own analysis. Stay tuned and feel free to comment!

  • #2
    Autumn Express EUR/USD

    It took PA three months and a half to complete 1115 pips long dip after it spent a similar amount of time hovering onto the upper limit of the yearly channel. The recent stop was less than a hundred pips away from a 61.8 retracement (at 1.1185) (low: 1.033, high: 1.1255) and has not yet been retested. It is clear to me that we are at a crossroads where one season/cycle ends to let another begin. If there is anything I can suggest is to read the article below.

    The regular bullish divergence on the daily chart (MACD) has yield impressive results, propelling the price around 340 pips north, and it is not finished yet. The 4h chart which entered into a bearish divergence (MACD) has to strengthen for at least one more day, leaving the gate open to our final TP zone 1.1690-1.1720. The RSI suggests a likely scenario at 67.65 (4h chart) and 55.49 (daily chart), both below 70 and heading towards it.

    If one studies closely the trendlines I drew on the chart, it will see the following:
    1) The intersection of the magenta lines was key to an extended bullish rally which was resisted by the blue line and then by the upper limit of the channel and the teal trendline.
    2) The blue trendline offered support for a short period of time but then gave in and the price found support onto the lower limit of the channel.
    3) After hovering a few hours on the lower limit of the channel, the price spiked towards the red line which put moderate resistance and then let the price reach the mid-trendline of the channel and make a peak onto the teal trendline.

    What's going to happen next?
    (Monday) The price might return to the lower limit of the uptrend channel and find support on the red trendline.
    It then may be propelled through the teal and blue line towards the limits of our previous symmetrical triangle (daily chart) which are going to put resistance and give us an entry for a 100 pips short.
    (Tuesday) If the scenario I wrote for Monday does not happen, then for sure it will happen on Tuesday.
    The price will then make a 100 pips move south but find support onto the red trendline again.
    (Wednesday) The price will make a final attempt to move upwards but be rejected by either teal or orange trendline. All three, teal, orange and green lines intersect in the same place. It means that either from that point the price will continue to move upwards or it will complete this cycle. By this time, the price will be out of the upwards channel on the 1h/4h chart.
    (Thursday) If the price moves down, then the next support after the red trendline will be offered by the up-aimed magenta line.
    (Friday) After 2 weeks long turmoil, the PA will take a rest.
    NOTE: If the price is to move up, a key resistance after 1.1720 will be 1.1820.

    What does September bring us?
    In my opinion, there is one more impulse wave (daily chart) that has to happen before the price retakes its upwards direction. The 3rd impulse wave (5-3 EW) which is the last one, will most likely make a truncation and bottom on either the sea-blue trendline or onto the down-aimed magenta line. Once all 5 waves are finished, an ABC corrective wave will happen that could propel price to 1.200x area and so finish the 5-3 EW (in October-November).


    • #3
      Autumn Express AUD/USD

      The Aussie bliss continues with new prime-minister being sworn in, the 5th in the last 5 years. This marathon that lasts for more than a decade is a tale of a third-world country rather than an OECD member. The only country to avoid recession might be the last one to enter it. It is said that there are more people on the streets than there were in the last 60 years. The interest rate is at record low but burrowing costs are growing. Is the economy really in shape and inflation rate within limits?

      Indicators are well known to present a technical reality of PA but algorithms for successful entries are part of a larger system that includes unsuccessful endings. The price, however, is in a channel headed downwards on the daily chart, it reached a key support trendline and certainly has to game it some more. The bottom of 0.70s was not reached yet and who knows maybe that is our chance at making some money out of shorting. The other objective is as clear, entering the market at one of the channel's limits.


      • #4
        Autumn Express USD/CAD

        The PA on the monthly chart is headed up, but the daily bars are in a downtrend channel. So, what is its direction?

        The pair is hovering for now on the top of two mid-trendlines: the daily and the weekly. It is visible on the chart that it made two attempts to cross the weekly mid-trendline and there are no clues it won't do it again and perhaps succeed. A second key element that drives us to believe that the pair is headed south is the fact that it tried three times to cross a key resistance trendline that is plotted on the yearly chart (the violet one). While a third key element is the downtrend channel that the PA plotted on the 4h chart (the orange one).

        USA and Canada are two strong economies where both FED and BOC* are increasing the interest rate. One country is 'exiting' international treaties with Trump leading the battalion while the other one is siding more and more with EU and its allies. The GDP growth rate QoQ is to be released this week and the forecast is positive for both. Though the US data will weigh a lot more and so influence traders' decision. Flash news to cause again short-lived runs.

        It is a tricky situation to decide whether the CAD will be stronger than the USD or not. Our goal, however, is to have a detached approach and to conclude that if there is a downtrend then shorting is not a bad idea, after all, if the price leaves the channel we can switch sides.


        • #5
          Downhill Skiing, Last Wave

          The pair has exited the uptrend channel and is now headed towards 1.13x. It would be the 3rd impulse wave on the daily chart (5-3 EW) which has finished or is about to finish the 1st impulse wave on the lower TF (4h for example). If this scenario is true then the 2nd corrective wave is rather short compared to the 1st corrective wave. Our aim, however, is to be aware of what might come next and if 2nd impulse wave (daily chart) was 550 pips long, the 3rd one could be as long.

          On the chart, you can see a projection of a possible PA channel with an extra blue line parallel to it which could act as support in the event of a breakout. The wave has its start at 1.1733 and a possible end below 1.13x but until it reaches its target there are key support trendlines that stand on the way. The magenta line is a minor s/r trendline which crossing will give the last signal of the 4h trend change. The green line, on the other hand, is a key daily support that can be used by traders to TP some orders before a major pullback. And the orange line, despite being so close to the green line, is the last defense. It is a weekly trendline that might be the lower limit of an up-channel on the weekly chart. If it holds, the corrective wave on the daily chart could bring the price back into the 1.20x zone.

          Trading Plan:
          One of the options, for now, is to do SOER until 1.1438 with a final TP in the 1.1410 area. That's at least 200 pips gain if we don't take into account the scalping on pullbacks between the limits of the channel.
          Next option, is to BOED from 1.1410 area, but it is risky because the price could dip as low as 1.1200.

          We are at the beginning of a bountiful new month and a new season. The very first week could set the bottom of the next 3 months. The price action has largely been predictable in the past months of this year, but the type of the ABC corrective wave to follow is unknown. Luckily, we have the trendlines, the fibo tool, and the technical indicators to aid us at any time. Let's ride these mountains!



          • #6
            (13Sep-15Oct/2018) My first approved article on platform. See chart here: EUR/USD Expanding Triangle
            Last edited by CRtrader; 09-14-2018, 05:31 PM.


            • #7
              (14Sep-20Oct/2018) An improved version of the chart Expanding Triangle, see here: EUR/USD Labyrinth


              • #8
                (20Sep-20Oct/2018) See more on EUR/USD play, here: EUR/USD Labyrinth, Act 2