Wow, yesterday the market had some nice movements! Did you manage to catch some of those pips yesterday? Please write down your comments below!
The Forex traders from our Forex trading room sure had a lot of choice: EURAUD, EURNZD, GBPAUD, GBPNZD, EURUSD, AUDUSD, NZDUSD, EURCAD, GBCHF. The Winners Edge Trading account choose the EURCAD long setup.
And for those of you who follow us on twitter, you know the details of this trade setup as we twittered the exact entry, stop loss, and take profit level. https:[email protected]
If you took it with us, CONGRATULATIONS with that 100 pip profitable trade for a great 3:1 reward versus risk trade!!! Awesome job!
MASSIVE BREAK COMING SOON ON WEEKLY WEDGE
On our menu today is the EURGBP, EURCAD, USDCAD and the EURJPY. If you want to read analysis on the majors such as the EURUSD, GBPUSD, AUDUSD and the USDJPY, make sure to check out yesterday’s analysis!
The EURGBP daily/weekly charts were surely stuck in a very tough wedge. But considering the strong up move prior to the wedge formation I did have a biased for the upside break earlier today.
The currency pair apparently agreed, as the smaller wedge of the 4 hour chart already broke earlier on. The bigger trend lines (red) still had an importance for the market as well, but they too fell pray to the upside momentum. Will this bullish momentum last? Read on for more information on that.
The EURGBP chart made by myself prior to the upside momentum, and in preparation for today’s article earlier today:
My primary interest for this chart is:
1) A break of the wedge to the upside
2) A bounce off the 618 retracement Fib (when Fibbing 8th of December 2012 to top at 23rd of February 2013 – green box)
3) To a lesser degree a break of the wedge to the downside (which I doubt would happen considering price action from earlier today)
Clearly price movement has been quite strong and the EURGBP is actually breaking all the resistance level as we speak. So currently the chart looks like this:
Interesting measuring points on the weekly chart are weekly highs and lows… plus the fractal indicator at tops and bottoms of course (green and red horizontal lines). We saw the beak of last week’s high which signals bullish strength. Next nut to crack is the high.
DAILY TUG OF WAR
The daily chart is a funky and wacky looking chart with tons of wicks on both the up and downside. There seems to be an ongoing and everlasting tug of war between these two European currencies (purple and orange box).
My main goal was to put the currency back on my list of currencies to look for trades, as soon the break out of the consolidation zone (orange box) were to happen. Now that the EURGBP has broken, I will be waiting for a small correction zone / retracement and will take next break out trade for the upside continuation. The break out trade will have some decent potential in my opinion.
There is one thing that I would like to monitor today: the daily candle close. I am going to show patience and wait for a clear break of the daily trend lines and fractals before attempting a trade. Today’s day candle will be important to see if the bulls can remain in control throughout the entire day. Once the resistance is out of the way, it could be bull movements for some time to come….. In that case, all bull flag corrections and break of those corrections could spell great trades to the upside. Let’s see.
CAN THE EURCAD CONTINUE?
Well the question seems redundant now. The answer of course was yes, as the currency has already broken to the upside.
Here too I started writing the article before the actual break out to the upside, which is part of the day to day reality of a Forex writer. Sometimes expected and anticipated moves happen before I can communicate them to you via this article 🙂
But I sure hope that you managed to catch the beak via our Twitter 🙂 https:[email protected]
Before reading the rest of the article, please make sure to read this article from 2 weeks ago.
It is a huge guide on how to trade the EURCAD, so check it out. The next link has been the update in between the last article and yesterday… and now I will speak about the most recent price action 🙂
More upside to come
So as stated above the upmove indeed happened…. BUT I am still expecting more continuation to happen soon… especially if we break the current top at +/-1.3670. The top can always cause a resistance or retracement to occur. Once the top is broken, I can see nothing sanding in the way of the EURCAD moving to higher ground and there is a very high likelihood of this currency pair continuing on to the targets.
Targets and break out
So that should mean clear sailing to the bigger -0.272 target at 1.3792 for yet another up move on the EURCAD. Also, this should really only cause a small pause and then the currency should continue towards the -0.618 target at 1.3990.
Personally, I will wait for a correction to develop on the smaller time frames and take the next break.
OTHER BREAK OUTS
Also the USDCAD and EURJPY are making attempts to break to the upside.
The resistance trend lines and resistance horizontal lines are being pushed aside by the strong bullish moves as we speak. Let’s see if the bullish momentum can knock all of the resistance today or tomorrow.
At the current pace both currency could finally be well setup for some upside break out trades later on this week…
Thanks so much for reading and sharing this Forex article.
Please make sure to read the articles from Tim, Nathan and Tony here:
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