Active markets are good

Surprisingly Monday morning was quite active. G/J bounced off the rising trendline again, then finally broke it. I missed the short, but got some pips on the bounce.



E/G continued its upmove, turning previous resistance into support and retesting it one more time.



-Tyler

Weekly recap

Let's quickly look at what happened last week. Monday was a holiday in the US, I didn't trade at all. On the other hand, Tuesday was pretty good, since it was the first US session after NFP so volumes and volatility were expected.

Now, G/J. NFP made G/J spike, then it completely reversed despite positive numbers - strong indication of a fishy nature of the move up.



Here's G/U. My personal opinion on this pair is that it is the most-manipulated instrument of all majors. One has to be very careful when attempting to scalp it, and closely monitor E/G as it has a great impact on G/U.



E/U was stuck in a range the whole week. First two trades would have been clearcut, the last one might have been been stopped out, depending on where your stop was.



U/CAD gave a major headaches this week. First, if you go back to my post from 8/25/2010, remember we were predicting U/CAD bouncing from the daily highs. Today the situation looks like this:



Had you held the trade until today (with a stop at BE of course), you would be looking at 350+ pips of profit (with a 20 pip risk). Quick look at hourly suggests a channel. The last two big moves down were during NFP and CAD employment figures, hence not tradeable on the short side.



E/G had nice bounces off the rising 4-hour trendline:



On the H1 chart, bounces happened too:



On daily charts, E/U, G/U, E/J and G/J have been consolidating for quite a while now. This suggests a big move might happen sooner or later so be ready. Also, I've heard talks of Japan planning on an intervention, so be careful with long yen positions. Take your profit quickly, don't let the market take it away from you (because it will)

-Tyler

Trades from Friday

Quick look at what happened last Friday.

E/J was stuck in a range for a while, then retested the hourly lows and finally broke out higher.



Similarly, U/CHF squeezed all shorts heavily and then broke out to the upside.



-Tyler

Yen is stronger than ever

We had three very interesting days this week. All yen crosses were pretty much in a freefall and the BoJ threatened with intervention. Probably empty words...

E/U has been caught in a range with the topside limited by 1.2725 with several strong bounces from there.



G/U also hasn't moved much. After the initial break below 1.5478, we haven't moved higher:



U/CAD looks like it has ended its rally. Where? At the daily highs:



And how? With a textbook double-top:



E/G hasn't moved much yet, just whipsawing:



And finally, let's look at the Yen. Daily lows at U/J, E/J and G/J got taken out and all stops evaporated. There were little bounces off those lows for 15+ pips, but one would expect this to bounce more.

U/J:


E/J:


G/J:


I got taken out on the bounces as well, pretty heavily.


-Tyler

Few trades from Thursday and Friday

The most important thing that happened on Thursday was the following headfake that cost many people a lot of money (including me this time). On M1, U/CAD broke support shortly after 7am and went down to 1.0248. From there, it rallied 250 pips in 9 hours. At the time of the fake break, M1 looked like this:



Today, H4 looks like this:



The reason is pretty obvious, it was a 61.8% Fibo bounce. Also we had divergence on the RSI (which I didn't notice at that time :\) This is suggesting upcoming USD strength. The markets confirmed this by heavy selloffs seen in E/U and G/U on Friday.

Moving on, E/G had a few nice bounces. The first long only went for +9 pips, but bear in mind that pips E/G are worth 1.55x more than pips in USD majors.



Finally, U/CHF broke the strong daily support at 1.0350. The break was one of the statement-making ones, over 100 pips in two hours. The support then became a resistance and we had a bounce for 15+ pips.



Finally they put up the price to the previous hourly support and sold off from there.



The weekly close on U/CHF was exactly at 1.0350 so we'll what happens next week. E/U will most likely head lower, along with E/G, judging from strong bearish candles on the weekly. Also, we have a double/triple bottom on U/J daily and a trendline that is begging for a break.

-Tyler

Stick to the strategy

Well, this morning was interesting. I woke up and G/U was up over 150 pips for the day approach previous high. Of course I sold it. It was fighting a bit, the market slowed down, but eventually sold off 25+ pips. This was pretty much it as nothing was happening until after 8am. And since a real man doesn't trade dead markets, I didn't do anything else.



Granted, I should was a bit inpatient with the G/U short as the second one was way better. The next trade was a long E/U after it showed a strong move after NY open. I covered around the previous high.





Then I left for work, but what followed was a textbook bounce from the previous hourly high.



Another one that I missed was a long on E/G. This was happening as I was already long E/U and decided to pass.



And finally, E/J had a solid bounce off support. I would have passed on this one probably, as it wasn't as oversold I would have liked it to be.



What did I learn today? First, don't trade dead markets. This was crucial to avoid any blind sucker plays before the NY open. Second, be smart. Even after seeing a strong breakout, price pulls back before continuation. There's no point jumping in too soon.

-Tyler

Waiting for PA confirmation

Tuesday morning has been interesting so far. I was looking at shorting G/J because its advance was very weak and it was approaching previous high that was also coinciding with a trenline. I didn't short it right away, but rather waited for a price reaction. The reaction came in the form of a very strong bounce. I got in short and exited at previous support:



A similar thing happened on E/J but the reaction a more subdued, because E/G was trying to go higher. I again waited to a reaction, I saw U/J selling off, E/U breaking down and got in short. Exit simultaneously with G/J.



During the day, U/CAD broke the ascending trendline, but 1) I missed this because I was at work and 2) I probably wouldn't have taken it anyway, because the move was rather unconvincing in strength.



-Tyler