Massive Bearish Candles Lead Traders to Expect A Volatile September

With the trading month of August completed, traders can now look at the monthly candles to search for new clues and information. Remember, each candle stick has its own story and message and it’s up to us to interpret them as profitable as we can. Let us review some of these monthly candles in their bigger context, and see how we can analyze and understand them.

EURUSD MONTHLY

The break of rising wedge chart pattern has been exceptionally strong so far. Last month’s monthly candle was extremely bearish with a candle close only a couple of pips off its low. This means bears stayed in control throughout the entire month, even up to the last minute of August.

With the bears clearly dominating and not losing any ground before month end closure and last weekend, traders can look for more bearishness during the September trading month as well. We will be releasing new articles throughout the month of lower time frames to identify how we can capitalize on the bigger time frame bearish momentum.

EURUSD monthly

GBPUSD MONTHLY

The Cable downtrend started later than the EURUSD, but the GU is building a ton of bearish momentum as well: both the July and August monthly candles were clearly bearish. More importantly, last month’s candle close was near the candle low which means that the bears were strongly in control. It also means that the break of the uptrend channel was a decisive and clean break out. All in all, I am expecting more bearishness during this month of September. Of course some retracement up can always occur but the Cable could be at the start of its drop to retest the bottom.

1- 9- 2014 gu

USDJPY MONTHLY

The USDJPY monthly chart had a bullish candle last month. Here too we see USD bullishness. The big question is: can the UJ break the monthly resistance? When looking at the August monthly candle, there is a good chance that the answer is yes.

1- 9- 2014 uj

EURAUD MONTHLY

As the Euro is dropping against the US Dollar, it is also weakening against other currencies such as the Australian Dollar. Here the monthly candles are showing lots of bearish momentum. The major obstacle for a downtrend continuation is the weekly bottom and the 1.40 psychological level. A break of that could translate into lots of wide open space.

1- 9- 2014 ea

AUDCAD MONTHLY

Last but not least, a review of a pair without a Euro or Dollar: the AUDCAD. This monthly candle turned into a Doji, which means that the opening and closing price were roughly equal to each other and thus no winner was available. The bigger picture is showing bearish momentum but most recently the AUDCAD has been able to pick up some gains to the upside. With resistance close by though one more break up seems to be the maximum.

1- 9- 2014 ac

Which monthly chart and pair do YOU find the most interesting? Let us know down below!

Happy Trading!

 

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  • Chris

    Hi Alex, thank you for the comment, appreciated. These 3 pairs are doing great indeed. 🙂 good trends. Cheers!

  • alex

    thank you chris for that analysis, we like the look of the cable, usdjpy and euraud. cheers. kind regards alex.