Tag Archives: Trade Leaders

Trade Leader Or Kahana presents technical analysis of EUR/CHF.

EUR/CHF is not like any other pair. Most of the time the price is held in a tight range. Please notice the most important highlights when trading in this pair:

  1. Recently, the average daily range is about 15 pips.
  2. Using the short time frames (15M to H1) in order to find entries. [I am using the hourly chart.]
  3. Use more than one indicator to find good entries. [When the graph is held in a tight range, some indicators will provide you with false entries.]
  4. The pair is for scalping.
  5. Hedging is possible.
  6. Patience and perseverance are necessary. Some trades can reach to their targets after a long time. If you are already holding a trade in EURCHF for a quite some time, you need to make an adjustment of the take-profit in order not to lose due to the interest.

EURCHF painted a bearish pattern in the monthly chart suggesting a nice decline to 1.2071. The graph usually moves between the upper Bollinger Band to the lower band and the contrary. In this case, EURCHF monthly graph began its movement in the upper band, closed a candlestick below the 20MA (the middle band) and should reach the lower band price level.\

EUR/CHF Chart

In addition when observing the Woodie's CCI weekly chart, one can see that there was an extreme movement upwards, the 50CCI (in black) toke off to 550CCI area.
In most cases, when the 50CCI reaches to the 200CCI, it will also reach the -200CCI.

I will monitor the hourly chart looking for a bearish entry. I am using a few indicators to help me to prefect my entries: Bollinger Bands, Woodie's CCI and Moving Averages (MA) and the best is to combine them with Japanese patterns (if created).

The final target is at 1.2071. As mentioned above, this pair is for scalping so the final target should not be used as your take-profit. Monitoring the short time frames (15M – H1) will provide you enough entries that in total could give you an opportunity for nice profits.

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Trade Leader Or Kahana presents technical analysis of the EUR/AUD

EURAUD uptrend is in its infancy. EURAUD is building a potential bullish Vegas pattern in Woodie's CCI daily chart. The pair created three hills in the -200CCI area and two hills in the -100CCI area. I am trading with the trend but here is an opportunity to take a trade-edge, using a trend Reversal Pattern.

EUR/AUD chart - click to enlarge

In the daily chart, EURAUD started its uptrend from the lower Bollinger Band. Usually the graph moves between the lower band to the upper band and the opposite.

In addition, the graph built a bullish wedge, closed a daily candlestick above it and made a pullback to it. The Woodie's CCI H4 chart and H1 chart also painted bullish patterns. The 50CCI (in black) should reach the 200CCI in both charts.

In order to avoid the bearish corrections, one should wait for a bullish ZLR in the H4 chart or in the H1 chart to join the uptrend. You can learn more about the Zero Line Reject from my earlier post on the topic.

The initial target is 1.4521 (the upper Bollinger band level in the hourly chart). The final target is at the upper band level in the daily chart - 1.4711. The interest in EURAUD is very high so one might prefer taking this pair to the short term.

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Trade Leader Or Kahana presents analysis of the AUD/JPY.

AUDJPY created numerous of bullish patterns on several time frames, from the hourly chart to the daily chart. The uptrend can develop into a monthly trend, depending on the monthly close.

AUD/JPY chart

AUDJPY created a bullish pattern in the Woodie's CCI hourly chart. The 50 CCI (in black) made a nice bearish movement by building two hills in the -200 CCI area and another hill in the -60CCI and crossed the zero line upwards.

In order to avoid the bearish correction, don't enter a long position in AUDJPY right away; wait for an hourly ZLR to perfect your entry. I've written earlier about recognizing Zero Line Rejects.

In the daily chart there is a potential for a ZLR in Woodie's CCI. If the 6TCCI (in blue) will reach the zero line a daily ZLR will be closed. It does not depend on the closing price level; it can be during this day or the next days. In the daily chart, the price also didn't reach to the upper band after it closed above the 20MA. Therefore, I expect the AUDJPY to target 96.440.

As mentioned in the first paragraph, this establishing uptrend can develop further even to the monthly chart.

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Trade Leader Or Kahana presents technical analysis of the GBP/USD.

GBPUSD created numerous technical bullish patterns in three different time frames: hourly chart, H4 chart and daily chart. At the time of writing there is a long entry at 1.6787. If GBPUSD will be around this price, you can still enter the trade but if not one should wait for an hourly or H4 ZLR.

Aside this, the weekly chart is establishing a potential Bearish Wedge. It is only a potential scenario since there was not a third retest of the upper line of the wedge. In order to minimize my risk and help me avoid the bearish corrections, I would wait for a bullish ZLR in Woodie's CCI hourly chart or H4 chart to join the trend. To learn more about ZLR, you can read my previous post.   Additionally, I liquidate a part of my trade for the short term and a smaller part for the medium term.

GBP/USD chart, click to enlarge

GBPUSD hourly chart painted a bullish pattern which is called "Rising Three Methods". This pattern is created when a large bullish candlestick is followed by three or more bearish candlesticks that do not cover the large candlestick. The technical correction is weak and we should expect the trend of the large candlestick to continue.

The H4 chart built two bullish patterns both in the graph and in Woodie's CCI.

In the graph, the price started to rise from the lower Bollinger Band and usually in those cases it should reach to the upper band. Also, the woodie's CCI didn't reach the 200CCI yet, observing on Woodie's CCI, the bullish trend is not yet to end.

Last but not least the daily chart bullish wedge and the "Rising Three Methods" pattern. Both are indicating strength in the pair. In the daily chart the pattern in the Bollinger Band is brighter. The price rose from the lower band and closed above 20MA (the middle band). Mostly in those cases the price would reach the upper band.

My targets according to my analysis:

A: 1.6816

B: 1.6831

C: 1.6886

 

Trade Leader Or Kahana presents technical analysis of the AUD/USD.

AUDUSD painted a bearish pattern on the weekly chart followed by a big bearish candlestick. Looking at Woodie's CCI monthly chart you can see AUDUSD is at the beginning of its downtrend. Last week the pair affirmed a bearish candlestick, which indicates the resumption of its weakness. The graph also created a technical pattern called 'Double Top.' The decline will start as a correction and might develop into a trend reversal.

AUDUSD-Multi-Bearish

Woodie's CCI daily chart built a bearish Vegas pattern. This pattern is created when the 50CCI climbs to the +200CCI, folds down and creates another hill in the +100CCI area (sometimes more than one) and crosses the zero line. (This particular pattern has a lot of nuances, so don't try to trade it based on this information only.)

When the 50CCI is crossing the zero line it's better to wait for the first red bar in the Woodie's CCI to affirm the bearish trend.

The daily chart also painted a bearish flag. A flag is a technical continuation pattern which is created when a correction of a healthy move is held in a tight range (sideways). The weakness of the technical correction indicates that we should expect the trend of the flag pole to continue.

Sometimes I am waiting for a candle that closes significantly (the amount of pips depends on the time frame of the flag) below the flag's support, but in this case I am using Woodie's CCI for improved entries. Woodie's CCI helps me to avoid minor or moderate corrections. I am searching for an hourly Zero Line Reject (ZLR) to join the downtrend.

I set three targets for the short and medium term on the weekly chart:

A: 0.9200

B: 0.9128

C: 0.9052

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Trade Leader Or Kahana presents analysis of the GBP/USD.

GBPUSD may create a bullish daily Zero Line Reject (ZLR) in Woodie's CCI. When the markets will open, a ZLR wouldn't be confirmed since the last daily candlestick closed with a shadow. There are many economic figures this week for GBP, so its pairs and crosses will probably make an aggressive movement. When a daily ZLR is affirmed (might look like the drawing in the right picture), I will search for an entry on shorter time frames.

GBP-17-5-ZLR-D1

On February 20, 2014 I wrote a post regarding GBPUSD possible strength due to a Bullish Right Triangle in the monthly chart. A confirmed trend on the monthly chart lasts months and even years, with deep corrections along the way. Whenever I see a strong pattern in the monthly chart I will look for a pattern in other time frames using my indicators and graphic patterns to join the trend.

When looking on GBPUSD daily chart, one may see the Woodie's CCI might provide us with the perfect entry for joining the monthly uptrend. This potential ZLR is nicely shaped; the 50CCI is quite close to the zero line, while the 6TCCI is in the -100 area, both bounds sharply in a V-shape.

Whoever wants to avoid the bearish corrections should look for a bullish pattern on the shorter time frames, using indicators or graphic patterns. I would use the hourly chart. Observing the hourly chart, I see a big bullish candlestick followed by many small bearish candlesticks, which indicate that the bears are weaker than the bulls. I would wait for an hourly bullish ZLR in the Woodie's CCI to join the bulls.

USD/JPY weekly Woodie's CCI is most likely to affirm a bullish Zero Line Reject (ZLR).

The weekly Woodie's CCI already painted a few ZLRs before, each of them gave a profit of a hundred to hundreds of pips. When talking on the fifth/sixth ZLR, it will give a nice profit, but bear in mind that the profit will be smaller than the profit of the first, second or third ZLR.

This ZLR is nice shaped, the turbo CCI (6) made a sharp V. I estimate that the current ZLR will give a profit of tens of pips.

USD/JPY weekly chart - click to enalrge

Observing the USD/JPY weekly chart, one can see that the price is held in tight range for the last 15 weeks which is more than 3 months. The Bollinger bands contract due to the tight range of the price. Whenever the space between the bands shrinks it is indicating that an aggressive movement will come. At the time of this writing, neither the bands nor the graph tell us when and where we are heading.

One who wants to reduce risks and avoid the bearish corrections should look for a bullish pattern in Woodie's CCI hourly chart to join the gains. A bullish ZLR forms when the 50CCI is between the +100 to 0 regions while 6TCCI is between the -100 to -200 areas, both rebounds sharply in a V-shape simultaneously. The pattern will be stronger if the V in both the 50CCI 6TCCI is big and very clear.

Bollinger Bands is a very common technical indicator that provides continuation and reversal patterns. The indicator works well on all time frames. I use Bollinger Bands from the hourly to the monthly chart. Like any other indicator, you must use another indicator and look for Japanese patterns to confirm the trend.

Logic behind the Bollinger Band is Normal distribution. By Gaussian distribution of a particular variable will be compared with the average, and this is reflected in the form of a bell so that the majority 68.2% of the group / feature being tested will be close to the average and the rest 32.8% are standard deviations from the mean.

Bollinger Bands consists of three bands. The middle band is a moving average (I use 20MA) and the other two are two standard deviations. Some use 5 bands, in the middle will always be a moving average and the first 2 bands which are lies close to the MA will be one standard deviation from the mean and last 2 are two standard deviations from the mean.

Bollinger Bands Strategies

I will give some examples of how you can use the Bollinger band when you are trading. I will combine Japanese patterns and Woodie's CCI to confirm the trend.

EURJPY-H1When one or two candlesticks close under the band and most of the body of the candlestick is under the band, the price will get back to the area between the bands. Woodie's CCI reached to -422 and folded.

gbpnzd-D1

According to some strategies traders tend to enter a position when the upper (for long) or the bottom (for short) line of the flag breaks. Bollinger bands have a critical role in those cases. Whenever the resistance/support line of the flag is lying on the upper/bottom band you might want to wait for a correction and then if the pattern is still valid, look for a better entry. The 6TCCI in Woodie's CCI folded down and gave a signal for a bearish correction.

AUDNZD-D1

Whenever the space between the bands shrinks it is indicating that an aggressive movement will come. The bands don't tell us to which direction we are heading or when it will come but we know that it will be massive.

This is the time to use more indicators to help us know where we are heading. Woodie's CCI created a bearish pattern, a reversed (V) shaped for short.

EURGBP-H4 Whenever the price touches the upper/lower band several times in a row without a correction to the middle band the correction will come soon, in most cases the price will correct to the middle band and in others it will even reach the other band. In EURGBP H4 chart the bearish correction is followed by an evening star for short and the Woodie's CCI reached far beyond +200 CCI and folded down.

Trade Leader Alex Kazmarck of SpotEuro presents forex market analysis.

Update

Euro top at 1.40 seems to be the magic number. Today, ECB President Draghi signaled during the Q & A part of the press conference that if inflation continues to come in at such low figures, the ECB is comfortable acting in June, sending the euro plummeting 100 pips. While we’ve seen the euro bounce back several times over the past few months, today’s price action is pointing to a more fundamental shift in policy. He also verbally intervened in the euro’s high exchange rate, saying that it plays a very large role in inflation figures and that something may have to be done   about it. Very important to keep an eye on June staff projections and inflation figures during the next few weeks.

Ukraine situation has recently been given a helping hand as Russian President Putin asked the Eastern Ukrainian population to hold off on the May 11th referendum; however, it seems the vote will go on anyways and I’m cautious at this temporary relief rally that we’ve seen in equities.

I continue to be bullish on the USD and today’s bounce in the Dollar index seems to have made clear that the bottom lies at the 79 level. Still, today’s markets are very dynamic, with many moving parts. Short term positions could see more volatility in the near term.

Technicals

Some charts to keep in mind during the next few weeks. Presented with little commentary.

EURUSD Daily

eurusd

GBPNZD Daily

GBPNZD

EURCAD Daily

EURCAD

Conclusion

While certain strategies could work very well in this market, specifically longer-term fundamentally driven, it’s been difficult to hold on to certain shorter term ideas. I think there are a lot of risks that have not been accurately priced in that are currently reflected in today’s record low European bond yields (Italy). While there could be a lot of volatility ahead of us, I think the opportunity lies in the US Dollar, not only for safe haven reasons, but more fundamentally in the economic recovery, which may or may not hold. It should be a win-win situation as a safe haven play and as a recovery play.

EUR/USD

Resistance: 1.3995

Support: 1.3810; 1.3700; 1.3500

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Trade Leader Alex Kazmarck of SpotEuro presents analysis of the EUR/USD.

Update

Frustration would be the word to best describe feelings for any trader attempting to short the euro during the past few months. As economic data continues to suggest that the ECB will eventually have to begin some form of QE in order to protect the euro-zone from deflationary pressures, the euro somehow finds a way to bounce following decent selling pressure and is now grinding higher, back towards the 1.39 level. Even recent data from German suggested a lack of inflation with preliminary m/m CPI figures coming in at -0.2% vs. -0.1% est. and vs. 0.3% prior. Euro M3 Money Supply y/y also came in less than expected and the European CPI Flash estimate y/y was weaker than expected with a reading of 0.7% vs. 0.8% estimated, but showed improvement from a prior reading of 0.5 percent.

We’ve also heard from different politicians recently. ECB policymaker Noyer said that the current strength of the euro is a powerful deflationary factor and that low inflation will persist in the euro zone for some time, echoing recent comments from ECB President Mario Draghi who also identified the strong euro as a potential trigger for policy action. US Treasury Secretary Lew, Chicago Fed President Evans, IMF chief economist Blanchard, and the OECD, have recently spoken out against deflationary pressures and the problems that inaction will have on the euro area. While current economic data isn’t confirming deflation at this time, a continued weak economic recovery will certainly push the ECB in the direction of asset purchases or negative interest rates in the near future.

EUR/USD Daily Chart - click to enlarge EUR/USD Volatility - click to enlarge

Technicals

The euro remains within a rising channel but has recently consolidated within a wedge with 1.3967 and 1.3906 as two important pivot highs. A break above 1.3900 and a closer above the figure will be bullish for the euro. A failure to close above the 1.3900 figure and a hawkish Yellen followed by better than expected NFP figures could reverse today’s action and a close below today’s low should being a new leg to the downside. I’m paying close attention to the wedge within the rising channel and am very bearish if the channel were to break, especially with a close below the 1.3775 level. Shorter term, the euro has momentum and there are some technical indicators pointing to further gains; however, with fundamental news still in front of us, momentum could change very quickly.

Conclusion

The euro is currently stuck within a wedge, it has momentum from today’s strong reversal to break above the downward sloping resistance line and head above the 1.40 level, especially if the Federal Reserve shows some hesitation in its tapering schedule today. Also, keeping in mind that NFP figures are out this Friday, I expect the market to react in favor of the USD if the figures beat expectations, especially in the unemployment rate. I expect a range from here until the next catalyst.

Resistance: 1.3900

Support: 1.3775 - 1.3700