Throughout this Week I’ve stood by the notion that Indices may be near to forming a top ahead of a decent correction. Although that’s speculation I remain committed to monitoring charts ahead of the trading possibility that will follow.
The USD:CHF swing long remains intact but more interesting than the trade itself is the fact that the USD remained strong in general against some of the large one day rallies we’ve seen across Indices – another potential market topping sign.
There is one trade taken this Year that I’m already starting to regret closing and that is the GBP:USD short. To be honest, I was actually looking at it for a swing long from support and decided the support level was such a high probability target that I’d short price down to that level with a view to switching long if support was confirmed. I closed that short on target and of course, never got the confirmation to switch long. A GBP:USD post from Olu over at “Trading for People with a full time job” prompted me to post up the following Cable charts which I’ve been watching for Months but forgot about until he reminded me!
This Weekly chart shows an unlikely, but quite possible support area where price may rebound, maybe a great opportunity for a day trade but it probably wont be enough to mark a long term low:
The Monthly chart is somewhat more interesting. I’ve had this triangle marked out on the chart for the best part of 2 Years and finally price has broken down. MACD suggests loads of downside room is available. Obviously this kind of move could well be a fake-out ahead of a sharp reversal and a new huge rally, it doesn’t seem likely but there are instances of this occurring throughout GBP:USD history.
From a T.A point of view, my interest here would be a back test of the triangle as shown in the small black circle for a new swing short entry but seeing as this is the Monthly chart we could be waiting a long long time for that set-up to come to fruition, though spotting these things well in advance does give you a head start and I try to keep a list of such set-ups just as a way to try and remember them.
For this coming Week I’ve not really prepared myself so I’ll attempt to scan some more charts this evening or Monday evening and post up anything of interest.
If you’re a regular follower you’ll know I’ve been looking for a stock to buy and missed out on some opportunities a few Weeks back due to personal commitments being elsewhere, but I have now bought a stock (GKN) but it rallied from my entry so quickly that I didn’t get a chance to post about it in time and although I remain long, its probably too late to talk about it with a view to entering positions at current slightly overbought levels. I’ve no idea what GKN does, but having scanned through every FTSE 100 chart it was the most promising one I found and has paid off thus far.