Following up on yesterday’s GBP/USD post. Following the Monday’s hammer we got a decent little 100 pip rally but the question remains whether or not there are any teeth in this hammer or if GBP will slip further. Either way I’m on breakout patrol now.

There is some pretty decent news on the docket for the U.S. Dollar tomorrow including ADP Payroll, ISM Manufacturing and Pending Home Sales. Event risk could help a break this pair out of it’s current range just above the minor daily chart trend line.

The breakout box I’m watching is between $1.4377 and $1.4108. We’ll have to wait and see what the market gives us if anything.

Also if you’re looking around for a well defined range, checkout the 60 minute GBP/CHF chart.

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

It is funny to think of a trading day when GBP/USD moves in a range of 180 points as quiet but that is how I felt about today’s price action. There were some good moves during the New York session but this blog is about long term trading and right now I’m coming up dry on options.

This week is also Non-Farm Payroll week so it wouldn’t surprise me if we saw some wacky ranges ahead of Friday’s data.

One interesting daily candle to note is the hammer GBP/USD printed. The pair tested a rising trend line but the question now is will it have any teeth or will the pair fall further.  If the pair can establish a channel over the next day or two it could be an interesting breakout setup.

Best of luck this week,

Ryan

In my last post I speculated if the AUD/USD trend was strong enough the pair may bounce early on support around $0.6930 and bounce it did, three times. With two hammers and a bullish engulfing pattern I hope you found an entry that worked for you and caught some pips.

Deciding how to enter a trade when price approaches an potential support and resistance zone is subjective but since I get email about it, I thought I’d share this chart as an illustration of what I look for.  To me, support and resistance trading to me is about waiting for price action to tell you the story.

If I am very confident in an entry zone I may use an entry order at the boundaries of the entry zone however if I am not confident I will wait for the market to show it’s cards to me first through price action. I like to see long candle wicks suggesting strong price objections to that entry zone or very strong reversal patterns such as bullish or bearish engulfing candles.  I use the same process regardless of the time frame I’m trading.

Best of luck!

Ryan

Howdy!

Last week was slow on the blog, I took some time out to spend it with an old friend and what a show I missed! USD/CAD tanked, Bernake made more promises, EUR/USD rallies 450+ points in a day and GBP/USD makes comeback! I hope you were able to capture some of the fun last week!

Tonight I’m looking at the AUD/USD. This pair continues to trade within a channel we marked up weeks ago and has made a decent bounce off the bottom, presumably headed for the top of the channel eventually.

If you look at the hourly chart, there appears to be a small head & shoulders pattern which may suggest the rally needs a pull back to find more buyers.

I’d like to see some support build in following a pull back to the $0.6850 / $0.6800 levels I’ve drawn on the daily charts before this trend continues but if it is strong enough, it may turn around $0.6930 / $0.6900, I am awaiting the right bullish price action along support…

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

Last week I speculated $1.30 would hold and I was flat out wrong. The longs dried up while the shorts piled on pushing this pair down to $1.2630ish. Looking at the Daily chart I have to wonder if support is building in around $1.27 / $1.2650.  This pair has tested the $1.2630 level twice with support holding at $1.2650ish. Should the inside trend line break down this week I’d say the run at $1.30 will be over for now but if support holds we may see another assault on $1.30.

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle. Forex trading involves substantial risk of loss and is not suitable for all investors.

EUR/USD has been on a decent little rally the last few days and it appears a breakout may be forming on the EUR/JPY.

A break to the upside may run to $131.00ish which the top side of the channel this pair has been trading in since mid October.

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle.   Forex trading involves substantial risk of loss and is not suitable for all investors.

The “Thrilla From Mississauga” is underway again as Loonie is pummeled overnight and now tests major resistance at $1.30. Mississauga isn’t the Canadian capital of course but it is close and is sounded better with “Thrilla”.

I guess the question is do we short this again or will $1.30 fall this time?

Let’s look at the last week’s fundamental performance for Canada:

GDP:  -1.0%

Overnight Rate: Cut .50 basis points

Building Permits: -4.6%

Ivy PMI:  45.2 (Better than expectations)

This week Canada releases employment data which is expected to shed 50,000 jobs and grow unemployment by .02%.

The picture doesn’t look very strong for Loonie and given the light economic calendar this week the Dollar may benefit more from risk flows than fundamental drivers, retail sales is the only event on the docket for the U.S. this week.

My opinion is $1.30 falls. The hourly chart is already starting to demonstrate support around $1.2950. Technical analysis of the triangle that broke overnight nights suggests a long term price target near $1.34 if the pattern holds up. As usual, I’d rather get long on a pull back day than chase a breakout so for now I’m sidelined.

What do you think about $1.30? Click here to share your comments.

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle.   Forex trading involves substantial risk of loss and is not suitable for all investors.

Dollar rallied against the Yen again today preparing to test the psychological number of 100.00 even. All things being equal, we see technical evidence headed into the Asian session that a run on 100.00 may be coming soon.  Classic technical analysis tell us to measure the rally ahead of flag consolidation patterns to determine a price target for any ensuing breakouts.  This puts today’s breakout target near 100.22 which gives us a 100 point run from 99.00 to 100 even, well within the average daily range for this pair which is around 130 points (ATR(14)).

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle.   Forex trading involves substantial risk of loss and is not suitable for all investors.

The GBP/USD continues to look weak as it broke the 61.8% Fibonacci level from the rally that started back in January. There is plenty of event risk scheduled with most numbers forecast to deteriorate further, including a rate cut expected on Thursday.

GBP/USD is maintaining a high correlation to the DJIA so another sell off like Monday may help drive this pair lower as well.

Broken support looks to be between $1.41 / $1.4150 which may offer some short positioning ahead of any further declines.

Best of luck,

Ryan

IMPORTANT NOTICE: These comments are for information purposes only. My opinions or other information contained in this post do not constitute investment advice. It should not be understood as a direct recommendation to buy or sell any currency contract or other investment vehicle.   Forex trading involves substantial risk of loss and is not suitable for all investors.

Sunday evening in my corner of the globe and I’m pondering mixed fundamental data out of Australia. HIA New Home Sales (MoM) delivered 8.3%, far hotter than an expected -1.7% yet Company Operating Profits fell -6.5%, far worse than an expected -1.2%. So the mixed messages from the economy down under continue.

Last week we saw unexpected growth in wages, construction work and private capital expenditures leading some to believe the Aussie economy is stronger than it looks.

This week we see more key indicators including retail sales, gross domestic product, trade balance and the RBA rate decision which is an expected cut of .25BP. Some folks think the RBA will be more aggressive and cut by .50BP which would likely weaken this pair further; particularly if risk sentiment in the U.S. begins to stink again this week.

Technically speaking, this pair is along a rising trend line and support around $0.63. Bullish data long with bullish price action may see a turn in this zone but until that outlook is confirmed this continues to be a sell the rallies scenario for me.

Best of luck,

Ryan