Reviewing The FX Market With Some Charts From The Watchlist

Reviewing The FX Market With Some Charts From The Watchlist

It’s fair to say I spent much of the last Week sitting on my hands. The 2 currencies taking centre stage have been the Japanese Yen and the Swiss Franc which is exactly as I suggested in last Week’s trading review. As the latter has some quite significant risks attached to it in  the form of SNB’s (so far weightless) promise to intervene, only the short Yen trade offered safest level’s of risk reward and I traded this in the form of a USD:JPY long that I closed bang on my target level on Wednesday for a nice 223 point profit.

There were plenty of other Yen pairs worth trading and some performed better than USD:JPY, but without wanting to put all eggs in one basket this was the trade I went with and the result was more than satisfactory.

Going forward I’m finding it very difficult to find new confidence inspiring swing trading setups so for now I’ll give a run down of my fairly feeble watch list in the hope that one of them will offer something worth trading next Week.

NZD CHF

Going by EUR:CHFs testing of it’s 1.20 peg, the Market really wants to test SNB’s resolve and probably doesn’t believe further intervention will be forthcoming. If signs of intervention start becoming apparent, then NZD:CHF having closed last Week bang on support, could be act as an ideal barometer:

CAD JPY

Whilst everyone continues to sell the Yen, CAD JPY closed the Week bang on major resistance. Again, worth keeping an eye on as a sign of whether strength against the Yen can continue as it has done thus far:

AUD NZD

I’m still in a swing long on this pair from support. That support is now marginally broken and I’ll probably end up closing this trade out for a loss, though a daily close below last Week’s low could offer a signal to get short ahead of further downside:

GBP:USD

I shorted the highs on Friday as a day trade and go into the Weekend still holding the position. The Daily chart pattern shows similarities to the previous topping action in which case we’d need to see some imminent downside and my short is based on at least a very short term attempt by the Market to try and initiate that downside. However, a daily green candle on Monday that finds support above the green 200 MA could well signify a continuation of this rally initially targeting 1.5980 and that would have me looking to switch to the long side. If I choose to take a proper swing position based on the outcome of the current inflection point, I’ll post details in the comments section and update the Swing trades log:

EUR USD

Friday’s candle closed beneath the approximate resistance area of 1.3465. A daily close above this level would have me interested in the long side for a continuation up to the combined 61.8% Fib retrace and green 200 MA. Imminent Weakness from here would have me on the lookout for a lower high to initiate shorts:

EUR AUD

An interesting chart that does seem to imply further upside. A small pull back may have me interested in buying this initially targeting the falling trend line that originates from March 2000, and ultimately targeting the major resistance in the 1.2930 area. That’s around 400 pips North so buying a pull back early to middle of next Week could offer a great risk/reward with a view to seeing the Weekly Candle finally closing green as confirmation that the rally is likely to continue:

If EUR:AUD does pull back, where can we look to enter a long position? Well, the 4 hourly chart clearly shows high probability support in the 1.2478 area, so buying this level would certainly offer an excellent risk/reward trade, however, anyone who’s not already positioned long is probably looking at exactly the same idea which often means we won’t be lucky enough to see it happen, or, it will look like happening but smash through this support when least expected! That’s the risk of low risk/reward!

4 Comments
  • RS2OOO
    Posted at 22:36h, 27 February

    Everyone thinks I’ve gone crazy, but I went for the EUR:AUD long today on the basis that this sizeable pull back does fit with my analysis.

    Entry at 1.2440 and initially I’m going to manage the trade on an intraday basis stopping out quickly if the trade looks like failing.

    Will almost certainly stop out on a daily close below 1.2340. Upside targets remain as described above, however I’ll be watching the 1.2480 area as possible resistance on the 4 hourly time frame.

  • RS2OOO
    Posted at 19:03h, 28 February

    Closed half EUR:AUD at 1.2523 for + 83 pts.

    Will almost certainly look to add this portion of the position back to the initial part of this trade on a pull back.

  • Create Your Own Trend, Then Trade It!
    Posted at 23:27h, 28 February

    […] on the chart.I’ve been watching GBP:USD for the last few days as detailed over the Weekend in this post.On the daily time frame there are similarities in the current price pattern versus the Candle […]

  • RS2OOO
    Posted at 22:34h, 29 February

    2nd half of EUR:AUD long was stopped out at breakeven.

    As the first half of the position took 83 pts and the 2nd half took 0 pts, I’ve shown the trade as a 41 pt profit in the log.