Welcome to today’s article. We will be analyzing the major Forex pairs for our weekly Forex trading advice. Today we will focus on How to Trade the Majors: the EURUSD, GBPUSD, USDJPY, AUDUSD.
The Cyprus news shocked the currency into a spiral over the weekend. The currency gaped down 160 pips and found itself back in the old down trend.
The EURUSD had done its best to fight above the down trend channel last week for the first time in weeks:
1) One weekend was enough to put the currency back in its downward motion. The upward break to the north seems short-lived so far.
2) Interestingly enough the support trend line was still respected as the currency rebounded in today’s market action.
Down trend or reversing?
The big question is whether the EURUSD will now reverse back higher and box itself out of the down trend yet again? Or will the currency stick to this down trend?
When looking at the screenshots it is clear that I am especially waiting for the breaks of:
a) either the red resistance lines for upside potential or
b) green support lines for downside potential before trading this currency.
The day chart shows the trade setups I am waiting for. Please keep a keen eye on all news from Europe and Cyrpus as well. Read this article on “Crazy Euro Bailout Bad for Euro Bulls” for more information.
The GU is maintaining its bullishness within the longer-term down trend. It has completed 3 waves to the upside in a very impulsive and aggressive manner and is indicating strength and a chance of a bigger reversal.
The bigger down trend is not over in my opinion, but a retracement at this point in time is certainly no unthinkable. Especially after 4 hour divergences and a break out of the trend channel.
What remains are these 3 moves:
1) A potential 5th wave of the first leg of the correction (wave A);
2) After that we should expect a 3 wave correction back to the 500/ 618 / 786 Fib;
3) Then a bounce from here to the upside to the -0.618 target for the 3rd leg (wave C).
I am very interested in this potential long at the +/- 618 Fib and am interested in catching this swing trade to the north. Will keep you updated with live Forex trading advice and FX tips via @winnersedgetrad.
The UJ made a decent fall last Friday and over the weekend, very similar to that of the EURUSD. The currency however is showing some signs of reversal.
The currency seems to be bouncing off the former resistance level of 94.50 which was broken last week.
The 94.50 level was of course a huge resistance zone:
a) The currency had tremendous problems with breaking though it and respected the level several weeks;
b) Last week finally signaled the break out and the same level has been reached but now as a retracement;
c) Therefore, this area could definitely act as support and the break of the top can be respected.
According to my current EW count, the upside potential and my EW count would be invalidated when the 93.70 level gets breached.
The AUDUSD has reached a resistance level of a huge day 618 Fibonacci retracement level. The currency respected that Fib to the pip.
The question is whether the currency will reverse into a down trend, or we will we just see a pause and continuation to upside?
The major levels on this week chart are:
- Last week’s high at 1.0410 –> upside space to 786 Fib to 1.05
- Today’s low at 1.0340 –> downside space to 1.0150, maybe 0.98
Your questions and currency
Please let us know if you would like to ask a question about your favorite currency via the comment box here below or via Twitter @winnersedgetrad – don’t forget, we keep you live updated via our twitter account.
We hoped that this currency trading advice on How To Trade The Majors has helped you. If you are looking for Forex live training, please send us an email to [email protected] to join our live trading room.
P.s Always be careful with Monday’s though. The currencies often needs to create a new structure and waiting for a bit more confirmation or till Tuesday can be good.
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