Hello Forex Traders!
On today’s menu is the EURGBP, EURAUD, and USDJPY.
I am sure you are going to love some of these grand setups happening right now in the Forex market. But before we dive into that, please take a look at these 2 links:
1) In case you missed the analysis of the majors such as the EURUSD and GBPUSD, check that out here. http://winnersedgetrading.com/usd-at-thetalking-spot/
2) Also, dont forget to see Nathan’s awesome video and Tim’s great article about building EA’s. http://winnersedgetrading.com/traders-tech-writing-your-own-ea-part-37-strategy-tester/
The first thing I want to share is a really interesting fact about the EG:
The EURGBP has been stuck in a sideways range ever since mid….. March.
Wow. That is a tremendous amount of time. Almost 4 months to be exact. And a huge sideways consolidation zone like that would usually see a very powerful break to one side or another.
BIG TIME BREAK
Especially recently the currency has been bouncing up and down five times in a row with a tight range, BUT the break seems to have finally materialized last week when price pushed through the top of the range. The break seems to have occurred, and it is to the upside!
Not only has the currency broken the top of the range, but it has placed a daily candle close above the range as well AND yesterday’s candle remained ABOVE the broken range. This indicated that there were no sellers in the market and the buyers kept control.
So now the question looms: how far will the EG go?
The upside potential is at first limited to the weekly trend line and bigger tops ar around 0.88.
But if this trend line breaks, then a massive move up could occur which might bring this EG up to parity again, or even beyond that level and up to the -0.272 target at 1.06.
Make sure to check out the previous article on the EURGBP here. http://winnersedgetrading.com/first-class-forex-break-outs/
The EURAUD is making a pause in its tremendous up trend. Is it a pause for continuation or a pause for a bigger retracement? Both are possible of course.
And although someone might have a particular preference for an upside or downside break, in this case and with this currency I believe that both breaks are interesting.
The EURAUD loves to trend so once this currency starts to move, it can keep going forever and ever. And you don’t need to look that far in the past to see a great example. Recently of course the EURAUD has moved up steadily from 1.22 to 1.48.
Planning for the break!
A break down could easily translate into a 1000 pip move. A break up might see something similar, although the potential of the upside could be limited to a few hundred pips as the -1.000 target is at 1.4770 and the currency would need a break of the top at 1.4390 before the confirmation of upside has been met.
Both the downside and the upside breaks would be confirmed when the wedge (green) and the horizontal support and resistance (red) are broken.
Check out the previous article on EURAUD here. http://winnersedgetrading.com/european-versus-commodity-forex-crosses/
The USDJPY is in an uptrend and as long as the currency stays above the support trend line, then there could be yet another push up towards the 886 Fibonacci retracement Fib.
A break of the trend line could mean a bigger retracement back down, but the exact details would heavily depend on the new price action which develops after the Fib gets respected. That way we can judge how price action is behaving to judge whether a shallow retracement, a deeper pullback or a reversal is occurring.
Last but not least, the GBPCHF broke the huge down trend channel to the upside, but failed to break the bigger top which I was warning for. In the meantime the currency has replaced the down trend wedge with a wedge. That is why it is always important to see a major top or bottom get broken, along with the trend line, because otherwise the trend could halt and turn into a range mode in stead of a trend in the opposite direction.
Make sure to read this article to know more details about trading break outs and trading without indicators. http://winnersedgetrading.com/trading-breakouts-real-or-false/ http://winnersedgetrading.com/forex-trading-using-no-indicators-and-chart-patterns/
The key support and resistance are now critical for the GBPCHF. A break of either 2 could mean the trend mode is back on. A clear break would mean a daily close above or below the major horizontal levels. But in the meantime the GBPCHF could have the potential of bouncing back up and down for a while longer.
Ok, thanks for the reading and sharing of the article!!! Always so greatly appreciated!!!
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