Hi, I recorded this weeks video analysis on Saturday noon, London time.
At the time of writing, 18.00 hours the same day, the EU have announced the first change to the proposal to try come up with a deal.
The EU is notorious for coming up with last-minute “fudge” solutions that usually do not stand up to close scrutiny.
So there is a great danger of an over-reaction when the markets open.
In either direction.
Often EU deals turn out to be “lipstick on a pig”- ie it’s still a pig!
My best advice for anyone planning on trading the Euro is to wait for London to open and see what the reaction is once they and their European counterparts have opened their trading desks for the week.
Do not under any circumstances try to guess what the reaction will be as that is a sure-fire way to lose!
Last week saw little movement on most pairs, except the Euro which went on a bit of a run, but price did respect the bigger areas on most of them, that I pointed out in last Sundays analysis.
I made a short video on Friday showing how price bounced or stopped where expected on the Euro/$, Gbp/$, Aud, Aud/Yen, Nzd et al. Clearly we are in summer markets and as a result you need to be flexible and adapt to the smaller ranges and limited moves.
I showed in the video how the Euro lost its correlation with the other majors which was a clear sign that something was “off.” You need to be aware of not only changes in market patterns but also any unusual moves & be able to adapt accordingly.
The live training session: Here is a link to register for this weeks live training session which takes place on Tuesday 21st July at 11.00am London time (BST/GMT+1).
Then we can have a more detailed, up to the minute look at what’s happening and potential trades for the rest of the week. Last week I showed possible setups on the M3 system that worked the next day, so don’t miss out 🙂
The Forex Week Ahead
As I am trading from longer timeframes then not much has changed on most pairs, since last week BUT I have “tweaked” quite a few entry areas, so you need to double-check the areas I am looking at and why.
This week has a small amount of red flag news. There is of course, the chance that the EU result could have a major impact on all Euros and the ever-present danger of unscheduled Tweets from the White House, so check news before placing trades.
Do not be too optimistic in current markets. The average daily ranges are well down on most pairs and price is clearly ranging, so don’t be expecting 100’s of pips of movement when calculating the risk versus reward as it probably won’t happen.
I explained earlier that I made today’s video and analysis on Saturday. At the moment all seems to be quiet on the White House front. If there is any surprise news or extraordinary event before the market opens I will update you on Monday or in Tuesdays live training session.
€uro/$: Murphys’ Law, I was focusing n the Gbp last week and it was this pair that went on a bit of a run-up. Where it did it stop tho? virtually to the pip at the monthly 55ema as I had cautioned.
I would not long in its current position until it can break and close above 1.1500 on a weekly chart. I also do not want to short form its current position as the weekly 200ema is just below and that should at least hold it up.
If it drops then 1.11200 is the A-grade trade for me to long, but 1,1000 is also an A grade . AT 1.1100 there are multiple reasons for the entry and stop (61.8% fibs, whole number, previous support and resistance, 55ema) plus a decent potential risk reward, see the video.
It lost its correlation with the Chf last week. I am very wary of trading either of those pairs right now. Better opportunities elsewhere.
Chf: My bias is still to short it. 0.9500 using the M3. If it breaks the current double bottom/low I need at least a daily candle close. Swing traders will be interested to long again at 0.9400. That is the area to look for on M3 for me, not a forward order.
Euro/Gbp: Too messy right now. Keeps slicing through 0.9000, leaving for now. If it crashes after the EU result then I will be looking to long at 0.8820
Gbp/$: Hopefully I kept you out of a losing short last week. I showed why the move up or down was likely to be a limited one and price bounced back up off the 55ema, to the pip as expected.
Its still in a 1600 pip weekly triangle. Almost the same as last week: I need it to break and close on a daily chart above the weekly 55ema at 1.2635 and ideally above last weeks high at and 1.2665, then pull back to long. It has the potential to do at least 500 pips to the next major resistance. If it drops I need it to break and close on a daily below 1.2435
Intraday (M3) method The areas of interest are a long at 1.22000 and short at 1.2650.
Gbp/Aud: Has a big daily range and the spread can widen alarmingly AND its a wild ride often but apart from all that 🙂 1.8250 is a big area for a short if it shoots up, lots of resistance to hide the stop behind.
Gbp/Nzd: 1.9500 is an A grade short for me, if it shoots up. It is currently in a range between 1.9250 and 1.9140 so watch there for clues if using the M3
€uro/Aud: 1.6480 is a big area to short. Previously it bounced to the pip off a weekly trend line after the drop. The trend line is at 1.6140 now so watch there for a possible long and definitely at 1.5960/1.6000.
$/Yen: Still too messy for me on longer timeframes.
€uro/Yen: I haven’t traded this for months, but 120.30 is a huge area to long and 124.00 to short- see the video.
Cad/Yen: A grade is a short at 83.00 for me. If it breaks and closes below 78.00 look for an M2 short.
Cad: Hopefully you avoided a losing short as per my advice over the last 6 weeks. Yet again it failed to break below 1.3500. Same advice as last week: If it doesn’t pull back and keeps dropping I need a daily candle to clearly close below 1.3500 which has the weekly 55ema acting as support now.
M3 look at 1.3660 for possible shorts and If it shoots higher I will short again at 1.3825. If it drops dramatically I will long half at 1.3070 & the other 50% @ 1.3000. Remember any levels I post here I place long orders 10 pips above and shorts 10 below.
Nzd: Last week bounced off the upper trend line at 0.6600 and to the pip off major support at 0.6500. Only watch those areas if using the M3. Too small an area for M2.
The A grade long for me is at 0.6400.
Aud: Correlated with the Nzd. 0.7000 is key. Same as recent weeks when I said “Broke higher, stopped at the HUGE area of previous support and resistance of 0.7000.” again it was an M3 due to a lack of a strong area to hide the stop.
If it pulls back its an A grade long for me. I will look to split the entry/scale in 0.6740 & 6700.
As with the NZD. I would need a break and close above 0.7000 on at least daily to think about a long on a move higher (more conservative is to wait for a weekly candle close) to try avoid a “fake out”
M3 Shorter timeframes
See the new course & recent blog posts as to how I do this: 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 on to 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.
For more up to the minute, updates do not forget to drop by the forum.
Watch the video for more detailed explanations of this week’s detailed analysis and trade plan.