FX Setups

Dear Readers,

another day, another market, another chance!

Grab a cup of coffee and get your self well prepared for this upcoming trading day!

As we start off our analysis, the big questions today are:
* Is it risk on or risk off?
* The USD has showed signs of weakness, but does it have the muscle to turn it around?

The answers:
* The truth is that the USD has been range bound for quite a while;
* The USD index is at the bottom of that range, so the USD could find support right soon.

Will the USD get the bounce again or will it make the break?

For those of you following this blog regularly, you know that the currency pair’s show mixed prospects. The YEN has been in a tremendous trending mode, but the USD has varying setups in all other pairs:

–          EURUSD: had strong impulse and looks bullish, but might have a slight pause

–          GBPUSD: at the bottom of support, but is not able to find much power as of yet

–          NZDUSD: in an uptrend, moving slowly up

–          AUDUSD: at a top of weekly resistance à not able to break it, but has equal trouble breaking down

15.01.2013 EURUSD WEEK



The EURUSD is pausing, but for how long? A move up to the 1.35ish level could happen soon. The 1.3480 price area is a substantial resistance zone:

1)      It is the 2012 high

2)      It is the 500 Fib of the move down

3)      There are 2x -272 targets

Waiting for a pullback to enter a trade which targets the 1.3450-1.35 area is a wise trade setup and a Forex strategy I will be monitoring. Selling the resistance zone area at around 1.35, together with price action confirmation, might be another trade opportunity as well, although it is substantially riskier. You want to be very experienced and have sufficient experience how Forex works before attempting a trade as that.

What is your own plan for the EURUSD? Please share down below!

If the USD is not an easy nut to crack, then it could be wise to look at XAUUSD for more clues.

On the week chart we can see a base a pivot point being built on the support trend line. After bouncing off the 618 Fibonacci retracement level with wicks on the bottoms, the bulls are pushing XAU to the upside. Wave 2’s often retrace back to 618 Fib levels and this one has respected that level as well. Maybe this is a Wave 1 and Wave 2 setup. If so, we should wait for a break of the down trend and looks for buys on dips, which is one of the Forex basics.

15.01.2013 XAUUSD WEEK


Last but not least, While the USD is having trouble trending, the crosses are moving up and down too, wildly. Let us take a look at 2 crosses: GBPAUD and EURAUD examples of the week chart.

15.01.2013 GBPAUD WEEK

The GBPAUD has been moving up and down in a heartbeat. We saw an impulsive move up, followed by an equally impulsive move down and up again, which is starting to resemble a wedge. We are right in the middle of it. A move down back to the bottom seems to have slightly better odds..

On the day chart, weakness seems imminent but a break of the bottom and a hook back to the bottom would be a setup with the highest probability of success rate. Let us see if we get that setup.

15.01.2013 GBPAUD DAY

The EURAUD, interestingly enough, is showing a different picture. Here we can show the signs of an ascending wedge being built. This has a slightly higher chance of breaking to the upside. The difference of course is explained by the uptrend of the EURGBP.

15.01.2013 EURAUD WEEK

If you would like more FX advice like this, make sure to keep an eye out on our blog or add us to twitter at @WinnersEdgeTrad.

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Good Trading!

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