Learn the strategies you may need for profiting in Forex with David Aranzabal, full time trader & CEO at FxForaliving
Using Fibonacci ratios to manage your trades efficiently
by Sunil Mangwani
November 23, 10:00 GMT
Register for the webinar
Mondays are traditionally good days at the European opening. And today was not the exception. Cable formed a double top at 1,6340 and was confirmed after the Trendline breakout. If you missed the entry we got another good opportunity at the pullback, for a fast scalp (25 to 45 pips, depending on your entry). If you left some lots running, the price broke the Asian support, reaching Friday’s low.
See the chart for more detail:
GBP/USD
Cable staying within the defined large trading range. Resistance is at 1.6565/85. Sellers will be here at these high revels looking to drive this lower back to 1.6380.
Sellers will put stops in at above 1.6625. If this resistance breaks, buyers will come in and look for this to trade higher to 1.6665. Buyers will cover. They will take on the sellers here as well, as if this does break out of this range buyers are looking at 1.6830 to entice.
1.6565/85 holding keeps the market within defined range and sees sellers take this back to 1.6380. Here they will cover. Sellers will only re-sell below 1.6320 for 1.6240/20.
Eur/Usd hit 1.4298 yesterday which was near enough to the 1.4300 resistance. Buyers are going to be looking once more to cover in this region. Now 1.4300 holding leaves the market with a short term double top pattern. This should drive the market lower. However above 1.4335/40 all bets are off.
Now you do have resistance, good resistance in the 1.4335/40 region from previous highs, and this is obviously going to be a sticking point for buyers. Sellers are likely to come in at these higher levels and try and hold the buyers at bay. This should work initially, as the market will then have a topping pattern. However if buyers can crack above 1.4365 you would find sellers scattering, leaving buyers to hoist the market higher with 1.4440 then the next objective.
Now if 1.4300 holds it will come lower to support at 1.4205. If sellers break this support look once more for this to come lower to 1.4155/35. Sellers will cover to here. Only below 1.4110 would sellers once more be interested.
Source: FXstreet and Charmer Charts.com
Today at Trading for a living:
- VIDEO: RBA: Australia Economic Risks Now More Balanced
Source: CMS Forex and FXstreet.com
Cable came lower as expected, hitting target of 1.6040/20 then 1.5980. All shorts positions have been covered. Buyers have been evident this morning and have taken this slightly higher.
Resistance is located at 1.6160. Here buyers will be looking to cover all longs. Sellers are expected to be around, but if buyers get to grips with the market and break through 1.6180 sellers will evaporate in a cloud of confusion leaving buyers to grab the reins and run up to 1.6240. Sellers will be waiting here and they will be looking to keep a lid on the proceedings. Buyers will take profits, and will either re-enter the market on a break back to 1.6160, or buy a break of 1.6260. The latter will have sellers reeling once more as they scramble to reduce or quit shorts as buyers will have the upper hand and 1.6335/60 would be their short term objective.
Support is located at 1.5980 and if sellers break 1.5960 buyers will jump out leaving sellers to take this lower to 1.5895/1.5850.
Source: FXstreet and Charmer Charts.com
EUR/USD
Eur/Usd broke the uptrend line yesterday and sellers then pushed this lower to 1.3875. There has been a little bounce back from these lows and this does leave scope for buyers to come in and take this higher today.
1.4035/40 is your first obstacle. Once buyers have dispatched with this resistance it would leave the 1.4076 targeted. Buyers therefore will be covering to here. Sellers, as stated, will be around, but they will be nervous and they will not hold shorts if buyers take this above 1.4085. 1.4110 to 1.4150 would then be the short term objective.
Now if the buyers fail in their duty today and the market loses 1.3950 you will see th 1.3875 support once more tested. Sellers are expected to cover to here. Buyers will be evident, but they will be nervous and looking to turn if the market breaks 1.3825
Source: FXstreet and Charmer Charts.com
Cable is looking under pressure and if this cannot break and hold back above 1.6360 then you will see sellers take this lower with 1.6240 the immediate target. Now sellers have tried for this level once already this morning and only reached 1.6260. If buyers can get to grips with this and break the 1.6360 region there is scope for a recovery with 1.6410/25 the immediate target.
Here buyers will look to take any profits. Sellers will be around at these higher levels to snuff out the buyers intensions. Sellers will not budge from their task unless this breaks above 1.6440 breaks.
As stated support is located at 1.6240. If the buyers cannot hold onto this support and 1.6210 breaks sellers will have their way and this will lose ground to 1.6160. Sellers will profit take at these lower levels. Buyers will come to the rescue and try and defend this important support and they should win the first round. However sellers know they have the upper hand at the moment, and they will be waiting and watching for their opportunity to smash this lower to 1.6040/20.
Source: FXstreet and Charmer Charts.com
Eur/Usd broke higher and traded up to 1.4200. The sellers have smacked this lower this morning, and looking to test the 1.4085/80 support. Sellers will cover shorts at these lows. Buyers will test the water, but they will be quick and nifty to bail out if sellers take this below 1.4065.
You would then find the 1.4020/00 support coming under attack and buyers will show solidarity and stand fast at these lows., They should be able to manage to drive this higher, as the short term charts are obviously oversold after yesterdays move.
Now if 1.4085/80 holds there is scope once more for the 1.4180/1.4200 resistance to be tested. Sellers will command respect at these highs and only a determined effort by the buyers will break their resolve. If buyers manage to break above 1.4200 look for 1.4250/70 as your immediate attraction.
Source: FXstreet and Charmer Charts.com
Cable finally has broke higher. The break of 1.6665 has taken this to the next level of 1.6720. Here this should halt a little before continuing its upward journey.
However pullbacks currently look limited to 1.6665 and buyers will be waiting in the wings for this level so they can re-enter the market. If however the sellers decide further downward moves look likely they will bust through this support, leaving 1.6621/00 then exposed. However buyers will once more be waiting at these lower levels and this support is expected to hold.
If above 1.6720 then buyers will take the reins and the will drive this higher to our weekly level of 1.6830. This is important resistance and unlikely to break first attempt. Buyers will thus take profits ahead of this resistance and sellers will abound to cap. Only above 1.6850 would you see sellers jump ship and then 1.6910 will entice.
Source: FXstreet and Charmer Charts.com
Sterling basically traded sideways yesterday, bouncing off 1.5852and reaching 1.6015.
1.5984 to 1.6040 offers good technical resistance. So would at this point still sell into strength to these higher levels, but this time put stops above 1.6108 if possible… If not get out if 1.6060 breaks but look to get back in if the market disappears back below 1.6040.
1.5870/55 is again your first target. Here sellers are looking to cover shorts. They will re-instate if below 1.5850 as a break of this support keeps the immediate bias to the downside and sees 1.5780 to 1.5725 then as your targeted area.
Source: FXstreet and Charmer Charts.com
Target achieved yesterday of 1.3668, and as expected the market is currently correcting.
You have good support at 1.3520/10 and 1.3480 and buyers will look to defend this support. Only below 1.3400 would they wobble and reverse , joining sellers in their quest for 1.3340.
1.3668 is your resistance. If sellers fail in their task, look for buyers to break through this level and reach 1.3722/40. Above 1.3840 sees 1.3856/96.
Source: FXstreet and Charmer Charts.com