Awesome Setups In The Currency Market

Welcome traders to yet another trading day!

On this Wednesday we are currently exactly half way the trading week…

And this is a day to reckon with because there will be a FOMC announcement at 2pm EST time. A news event like this can certainly rock the Forex boat so be very careful today!

Today’s analysis will cover lots of currency pairs so I am sure you are going to love this currency market analysis.

Please, could you drop a comment down below which currency pair you find the most interesting setup? Thank you! I hope that this article will help you with how to trade the currency market.

1)      EURGBP

Last week’s article already discussed this currency pair in depth. This article intensely analyzed the potential movements and we identified that the EURGBP is at a talking point.

a)      Either the currency was going to make a break to the upside and maybe even a bigger up move on the week chart;

b)      Or the EURGBP was going to correct lower before moving to the upside;

c)       And the least likely scenario in my opinion is a continuation to downside.

Yesterday and today are finally giving an indication that this currency pair is heading up north. Scenario A indeed seems to be playing out.

We are getting a clear break of the trend line and previous day high. The break is also very impulsive, which indicates that the there is currently lots of strength to push this currency pair higher.

I would advise to wait for today’s day candle to close. A close of the candle near the high confirms the power the upside, but if the close would turn out to be too far (with a wick on top), then the currency might have made a false break out.

If we get the confirmation, the the EURGBP is back in an uptrend and any hook backs are opportunities to go long.

There is still a major top at 0.8630, which could cause the currency to retrace from that level. Once the currency has completed an ABC corrective pattern, then I am looking for the upside to continue.
MAY 22 2013 DAY EURGBP

2)      GBPCHF

The GBPCHF is in a great up trend, but could the power to upside be fading? And if so, could the GBPCHF be ready for a big trend reversal to the downside? Of course needless to say that this is the beauty for Forex traders, we can capitalize on both sides of the currency market!

I am looking for either a break to the upside or downside.

A)     Downside would become interesting when the trend line (red) and tops get broken (orange);

B)      Upside would become interesting when bottoms get broken (purple) / the steep trend line (green) is already broken.
MAY 22 2013 DAY GBPCHF

3)      USDCAD

The other very interesting situation in the currency market is occurring on the USDCAD.

This currency pair is at a huge bounce or break spot because price is hitting a major and huge weekly trend line. This trend line is a major area of resistance from the weekly chart and could send this pair down a lot lower. It is needless to say that a break to the upside could propel a lot upside momentum as well. So I am keeping an eye out whether the pair breaks or bounces!
MAY 22 2013 DAY USDCAD

 

Just in case you were wondering why I have so few indicators on my chart, take a look at this article on trading “naked”.

4)      XAUUSD

Also Gold has been moving very nicely. I would almost say “golden” moves on Gold yet again 🙂

The downside trading went very smoothly but currently the commodity has bumped into support at the 886 retracement Fib. At that level the currency posted engulfing day twins, which is definitely a very important price action signal.

If the commodity pair can break above Monday’s and Tuesday’s daily high at 1400, then XAUUSD might be ready for yet another up move back to the huge broken bottom on the weekly chart, which is around the 1530 level.

Downside would only come back into picture when Monday’s low at 1338 is broken. But even then the bigger bottom 1321 will be around the corner. The best down trade is either upon the break of 1321 or when the commodity turns back down at the 1530 resistance levels.

Make sure to check out this article if you need some extra help with the Fibs.

MAY 22 2013 DAY XAUUSD

Well I sure hope that this article helped you with how to trade the currency market!

Don’t forget to drop a comment down below which currency pair you find the most interesting setup? Thank you so much!

Also, any sharing of this article is greatly appreciated and I thank those who have shared the article in the past!

Last but not least, make sure to read this Friday’s article! We will be releasing part 2 of the million Dollar strategy. Here is part 1.

Good Trading Everyone!

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