What happened here? We called the short scenario and mapped out the trade, but passed anyway. Why? The explanation can be found in other markets. Equity markets on Monday showed major indecision and no conviction. The Shanghai Composite, which has been a major driver for the Aussie, was flat on Monday and the US was expecting some news. During uncertain times...
Go to any chart and you'll very likely see a consolidation or a price stuck between two major levels. After 3 weeks of heavy selling, we found some support but the bounce is not convincing. In the DAX we expected to see 10,000 to load up on shorts again which hasn't happened yet. Monday was a low momentum day without any movement. The area between 10,000 and...
the Aussie moved into a demand zone and found resistance. Momentum shows a divergence on the RSI. Lower highs indicate a sentiment shift. The missing link is the confirmed break of the lows. Downside potential - potential cover of previous bullish trend wave; clear path of least resistance.
Last week we highlighted the divergence within the consolidation. With the recent recovery in global equity markets, risk appetite rose and the safe-haven trades weren't as attractive anymore. The YEN was the greatest loser among currencies and it helped our trade unfold. The upside target is very obvious. If price can make it past the 1.19 resistance, 1.20 is...
The AUDUSD is showing the most interesting setup of the week. After the fake breakout to the downside, the shorts got squeezed a lot. The Aussie traded back into demand where it found sellers immediately. The question for the Aussie is: how does China and Crude influence the AUDUSD ? Falling Oil and depreciating Chinese markets weighed heavily on the AUD which...
The uncertainty of last week, whether the major support levels would hold, is somehow put on hold. Support did hold this week. All major indexes saw a bounce off their support levels. Only China is showing mixed results and a lot of up and down - but even the Shanghai closed up for the week. Now the new question for this week's trading: are the moves we are...
We called the sell-off yesterday. The long rally was just too much and profit taking right at the supply zone and after the completed Fibonacci run was the most likely scenario. Add to that the bounce in oil and the USDCAD seemed like a logical consequence. The short opportunity is gone for now if you haven't entered in the zone. IF it can extend the sell-off,...
2 days of relief for the Wall Street guys. 2 days ago, 1820 acted as support as expected. Price had just gone too far without any significant pause and 1820 was the obvious level after 1873 did not hold long. The three questions to ask yourself are: 1) Are we seeing a retest of 1873 and a retracement - an opportunity to load up on shorts? 2) Is this a dead cat...
As a trader which pair he is watching and the USDCAD will be on almost everyone's list. The recent run-up has been very strong and it is now facing a road block. The USDCAD completed its Fibonacci sequence. At the same time, it briefly dipped into a supply zone which also coincides with a resistance level. ---> MAJOR OBSTACLES From a fundamental perspective,...
Looking for high probability trade setups, the USDJPY made it back onto our watchlist. Although it's trading in a consolidation, the path is obvious with the well-defined boundaries to both sites. We just saw a rejection of the 116 level together with a RSI divergence.Although this is a bullish signal, as long as price is in the range, it's not a signal. A...
Yesterday we said that unless the Shanghai Composite is showing another major down day, the Aussie won't break lower. Wednesday, the Shanghai Composite 1% lower but this was certainly not enough to start a new bearish trend wave. The Shanghai Composite is still above its support level at 2983. As long as this holds, there is no reason to short the Aussie. It's...
The DAX showed a major gap into its support level. The S&P made its first attempt breaking his major level at 1860. Expect to see some more opposition before it breaks. This level is an important one so unless a catalyst accelerates the sell-off, we could stay here for a few days. The Hang Seng is breaking lose after the consolidation. The Nikkei is tanking...
We stressed the importance of waiting for the Chinese market before shorting the next down-wave on the AUDUSD. On Tuesday, the Shanghai Composite closed 3% higher and also the Hang Seng ended up closing positive. Those profits "boosted" risk currencies such as the AUD and the NZD. A look at the AUD shows the short squeeze on the AUDUSD. Price went all the way,...
Besides the AUDUSD short that we are still watching, the NDZCHF is the second most interesting short candidate on our list. With the NZD weakness and the safe-haven aspect of the CHF, this pair made for good trading opportunities whenever China saw a new bear wave. Right now, the NZD is testing its support level at 0.639. The Fib extension target points to the...
A look at the daily EURUSD chart immediately shows that this pair is not tradable at the moment. The consolidation is getting smaller and smaller. The DXY is showing the same behavior - a very tight range between a trendline and a resistance area. The Euro Futures are also trapped in a very narrow range. Keep in mind that both, the USD and the EUR have been...
The AUDUSD is almost setting up for a new short trend wave. It has broken its major support but the sell-off hasn't happened yet. The key factor for the AUDUSD is the Chinese market. These days, the Shanghai Composite leads the development - not only from a safe-haven point of view, but also because of the connection of the Australian and the Chinese economy....
Well, the CADJPY has been the best mover for us. Check out our latest published ideas and all our short target have been hit. However, it is hard to come up with reasons why this pair shouldn't keep falling. With the continuous sell-off in China and the safe-haven flows into the Yen, and the plunging oil prices that drag down the CAD, it's hard to imagine buyers...
We have to start with a very big IF for the Aussie pair. Although we saw a clean break on Friday, we have not seen a valid retest yet. Furthermore, the S&P 500 is just dealing with its major support level. So, A rejection of the S&P level could lead to a correction. Nevertheless, the clearest path is definitely to the downside for the Aussie. The Chinese market...