Hello Forex Traders!
My Aussie short trades are doing great and are up 130 pips. I hope that you managed to check out the video with exact trading plan for the EURAUD and GBPAUD longs and AUDUSD short. I recommend moving all Aussie shorts to break even and hanging to target. If you have any questions regarding the trade, feel free to leave a comment down below with your question.
Also Nathans trade on the EURJPY worked out perfectly as planned so the week had an awesome start. Make sure to view his analysis of yesterday here, together with Tony’s take on the economy and Tim’s ideas on the EA programming.
Simply put: make sure to join our trading room this week! 🙂
All of the great trending moves of the last 1,5 weeks occured mostly on the AUD and CAD weakness. In fact, the AUD has provided great trending trades for the last 6 months. The next break out trades might occur on the NZD, read more about that here.
The USD however has been quite quiet the last 2 weeks and the price movements have been very subdued.
1) The uptrend on the EURUSD slowly transformed into a range.
2) The rising wedge on the GBPUSD was broken but did receive support at daily levels.
3) The USDCHF broke a triangle to downside on the 4 hour chart, which was followed by a hammer candle, yet still fall back to the bottom.
Let us take a look at the US Dollar index for more guidance.
Obviously the USD index is at a pivotal point because price is at major support:
1) Weekly trend line connecting all bottoms since spring 2011
2) Weekly horizontal support at 80.50
Despite the fact that price has been “hanging around” near support for a while, the USD has not seen any momentum swift from down to upside. The down trend on the lower time frames still remains firmly in tact.
The grand 1 million or billion question is: will the US Dollar break the support and continue in its down trend or will the currency bounce?
Now as you probably realize, both options are viable and possible. In fact, the currency could go sideways for longer than we can imagine, as well.
But in my opinion, I am expecting a BOUNCE. Yes that means USD strength.
Usually speaking a major support level is not breaking immediately without a bit of bounce. So far the daily down trend has not seen any retracement at all. The weekly support should be able to contain the daily down trend and at minimum the likelihood of a bounce and then break is decent. If not, a total reversal back towards to previous tops to retest the tops.
SIGNS TO WATCH OUT FOR
The major levels to keep an eye on for the downside are:
1.) Daily double bottom at around 80.75 – 81
2.) Weekly bottom at 80.50
3.) Weekly trend line
A break of those levels could see the USD index move lower, but be cautious of the monthly horizontal support at 78.50-79.
The major levels to keep an eye on for the upside are:
1.) 4 hour high at 81.60
2.) Daily top at 81.75
3.) Top of down trend channel
A break of those levels could send this USD booming to the upside.
What do you expect on the US Dollar index? What are you looking for? Which currency pair would you trade the USD strength or weakness?
In my opinion the USD strength would be best trade on the continuation of the AUDUSD down trend. This currency pair is already in a down trend so USD strength has a decent probability of adding more momentum to that trend. Runner up would be the GBPUSD because it has broken a rising wedge with weekly bearish candle last week.
USD weakness could probably see most success with the EURUSD as this currency pair could still be considered in a slight uptrend at the moment.
Looking forward to your comments In the meantime, I thank you for reading and sharing and wish you all Good Trading!
Latest posts by admin (see all)
- Money Management in Forex: More Than Just Trading - February 17, 2018
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