Hi, this is a copy of the analysis I share with members on a Sunday before the markets open. If you see this post before Tuesday the 13th October, you can also register to attend the live training session.
Hopefully, you saw my update last week cautioning that I thought that the Yens looked as though they were going to break higher.
Most of them did, I hope you followed my lead and avoided a losing trade. Make sure to look out for updates and forum posts during the week.
With everything that’s going on right now with Trump, Brexit, the upcoming US elections and the “slight matter” of COVID 19, nothing is easy. However, those who persevere will always have a greater chance of success if they follow the right path or listen to people who have been there before!
We had a really easy summer period this year, which is very unusual for those trading the markets. Now things have become harder we need to step back and look at the bigger picture and choose the right battles to fight.
This week for example is D Day for the Brexit deal. Boris Johnson set Thursday the 15th October as the final day for negotiations. If he sticks to his word (he has made more U-turns than most of late) then as this comes nearer to the day things are likely to become very tense with anything related to the GBP. Equally, if there is a “no- deal” then that will not be good for the €uro either. The simple matter is that despite all the posturing and nonsense, neither side can afford to lose the other in terms of trade.
The graphic shows which countries sell more goods and services to the UK than they buy. The UK is Germany’s 4th biggest market and sells around $80 billion worth of goods and services to the UK annually. They can no more afford to lose the UK than the UK can afford to stop trading with them.
What we have seen is a great deal of posturing from both sides and its likely to heat up this week and make trading the GBP high risk. The simple choice is do not trade any GBP pairs. If you do then zoom out and only look at the big areas on weekly charts where price is most likely to react.
Be especially careful with the Euro/Gbp, I did consider it in the video but in retrospect, my best advice is to leave it alone. A deal, or no deal could cause it to shoot up or down more than once!
Source of the image and more details can be found here: Everything you might want to know about the UK’s trade with the EU
As ever I will update you in Tuesday’s live training session: It will be more important this week because of the aforementioned events.
The live training session: Here is a link to register for this weeks live training session which takes place on Tuesday 13th October at 11.00am London time (BST/GMT+1).
Then we can have a more detailed, up to the minute look at what’s happening and potential trades for the rest of the week.
It’s Columbus Day in the USA & Thanksgiving in Canada on Monday, so its probably going to be a slow day, especially on the Cad ($/Cad) so once again, choose your battles! Its more likely than not that this pair will go nowhere so leave it alone!
If it does shoot up or down then focus on the BIG areas where its most likely to bounce.
Because I trade from longer timeframes many of my setups are the same/similar to last week, but there are some subtle changes where price has advanced along a trend line or Ema.
€uro/$: The BIG area if it drops is still 1.1520 to long although it’s tricky on the stop”. If it pulls back to 1.1730 I will look for a possible long entry. If there is a successful Brexit deal then one would presume that both the €uro & Gbp would move up, but its risky for the reasons mentioned above.
Chf: Same:” I won’t touch it unless it gets back up around 0.9370/0.9420.
Euro/Gbp: As per my comments above the safest option is to leave it alone this week. I did explain in the video that I need a pullback. Ideally to 0.9010, but in retrospect, I will leave it alone for now.
Gbp/$: My best advice is to leave it alone. If it does drop then the BIG area is 1.2760 is key.
$/Yen: Won a little last week but it was very slow: 105.90 is a short for me. If it moves higher I will short again at 106.90
Cad: As stated above, leave alone on Monday. I prefer a long at 1.3020. 1.3000 is huge previous support and resistance I will long if it drops. If it goes up I will short at 1.3430.
Nzd: I will long again, this time at 0.6520 with a stop below 0.6465. Target 0.6690. Swing traders will be looking to short near the 200ema but the stop concerns me.
Aud: 0.7000 is interesting to long again but there are not multiple reasons for the stop. I won’t place a forward order, but will watch it on smaller timeframes for a possible entry. 0.7200 will interest swing traders, again not for me.
Aud/Nzd: not my favourite pair but one of my private students pointed out a possible long at 1.0820 that does look a good area.
As per my update last week, most of the Yen cross pairs broke higher, so now the bias changes to look for longs, but be careful, they could just as easily flip back down. The one I like the look of most is the Cad/Yen but not on Monday.
Aud/Yen: Worked again last week with a long at 75.00 but the stop is not great, 74.10 is a lot stronger.
Euro/Yen: 124.00 was the area to consider a short. Now its broken higher my bias is to long. 124.60 is the place BUT the risk-reward is better on the Cad/Yen. If it plunges lower then 122.00 is the next area for me to long.
Cad Yen: I will long at 80.10. Multiple reasons for the stop and good risk reward. If it shoots up I will short at 82.70- see the video
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.