Hi everyone,
As I warned you in the past and previous posts be very careful when you trade around the news. The NZD & CAD cash rates last week were a classic example of why not to trade the news. You can check the post out below. Weekly analysis: LESS IS MORE
I also made another post this week showing you how to reduce your risk in open trades. Traders 1st Priority? Don’t Lose
In the example of the USDCHF I got into it because there was a trendline break on the 4HR. Originally I had my stop 30 pips below but then when the price moved up I moved it just under the EMAs to around 10 pips risking less than 65% of my original position. I didn’t take any live trades last week as I am recovering from abdominal surgery (remember if you do not feel 100% do NOT trade). If I had risked letting it run through the news then (barring the stop being jumped) I would only have lost a small amount. Again less is more.
In todays video analysis, I have shown you that some of the pairs are still in a tight range. As it’s most likely that price is going to bounce again (remember we are trading “probability”) then it’s best to wait until the price breaks out and THEN we look to take the trades on a pullback/re-test.
The EURGBP was a classic example in recent weeks.
I explained it was better to leave it alone (the range was only around 35 pips).
I warned in advance there was no point trading it and it was best to look elsewhere as the risk-reward potential was terrible.
It finally did the breakout, followed by a near-perfect M2 pullback entry.
Murphys law it missed my entry by a pip (the spread) and is now 90 pips down in profit 🙁 Forex for you. Again less is more.
So you have to be patient and wait for setups to form. I have shown a few examples in the video of how you could trade these ranges. However, I prefer some of the cross pairs this week and I am willing to wait for the price to pull back, see the video at the bottom of the page.
Marc Chandler has written another very good article reviewing last week’s events & a look ahead as to what to expect in all markets:
US CPI, Fed, ECB, BOJ and the Week Ahead
The Forex Week Ahead+++++++++++++++++++++++
It’s one of those weeks again where we have plenty of red flag news and major news for different currencies. So you need to make a plan to be in and out of the market. Be realistic with your Take profits and take profit along the way as holding them during news events could have result in a loss or loss of all your profits.
There is GBP unemployment rate on Tuesday, then US CPI.
On Wednesday the BIG event of the month, the FOMC rate & press conference- wait until the latter ends before even thinking of opening new trades.
There is a LOT of news on Thursday, especially the EURO finance rate and finally Friday the JPY rate statement. The US CPI y/y should give us a clue about whether the FED will raise rates on Wednesday. Most likely they won’t as they have already given clues that they are at peak rates and have one more hike this year. However, do NOT try to guess the outcome of the news nor the sentiment
MAJORS
Keep watching the $index it is now at a major “make your mind up” area once again on the weekly charts. It is now stuck at the 55EMA and you have the 200 EMA just above it. If it could break above that we could be looking at $ strength.
Remember I am looking for “A” grade trades from weekly & daily charts that I can place the orders and then just walk away. A “B” grade is one that I will watch on 4 hour timeframes to see how it reacts if it hits my zone.
EUR/USD: Consolidating, would prefer a breakout above or below the EMAs. Have shown you an area on 4hr if you want to trade the range. watch the video
USD/CHF: A grade short at 0.93100, not interested where it is right now.
Do not take the Euro/$ & Chf at the same time. They are correlated so it’s the same “bet.”
GBP/USD: No multiple reasons to take it so leaving it alone.
AUD/USD: Interesting where it is now for a short, but it’s a bit risky considering the news we have ahead for the week. Worth watching on a 4 hour. The more conservative, for me, is to short at 0.6790. Keep your eye on iron ore for clues.
NZDUSD: No multiple reasons to take the trade.
USD/CAD: 1.33 is a major area, so its worth watching on a 4 hour to long. I would prefer a break below, pullback to short or just wait for the A grade at 1.30070 which has been a MAJOR area of support and resistance in the past. I will watch it.
USDYEN: 135 is the A grade for me but it’s too far away and unlikely to get there soon. On the 4HR 138 looks very interesting for a long. watch the video.
CROSSES
Some are A grades where I will place forward orders, most pairs have “areas of interest.” I have a lot of similar crosses so be very careful with the correlation.
EURGBP: Missed the entry, I will move it lower to 0.86300, its an A grade set up.
EURAUD: I would be looking anywhere around 1.57180 and 1.5640.
EURCAD: it’s in a range that needs a clear breakout above or below for me to take a trade.
AUDCAD: Interested to short again if it pulls back at 0.90700 where the EMAS are on the Daily.
GBNZD: Interested to long at 1.95700 for multiple reasons.
GBPAUD: Correlated with GBPNZD, Looking to long around 1.81150.
GBPCAD: 1.6450 is the sweet spot for me.
AUDJPY: A grade long at 91.55, multiple reasons. Might have a split entry.
CADJPY: is interesting at the whole number at 100. I will be watching it.
NZDCAD: Have a forward order at 0.83300
As always, remember correlation!
M3 -Shorter timeframes.
I do my analysis on daily and weekly charts first and make a note of the MAJOR areas of support and resistance. Then copy them onto Pierre’s Earth and sky template. Then I make a note of the weekly & monthly pivots points and add them to the charts. You will see lots of opportunities line up during the week. The important thing then is to select a bias for the next few days and do NOT take trades if the price is too near a trend line or pivot. Ideally, you want to buy when the price is near a major support and or pivot point line and has the potential to make at least 40 pips. Vice versa for a short.
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen):
Regards
Marc
