Hi, this is an example of the analysis I provide to members every Sunday before the market opens.
I show them what I intend to trade and why using our strategies.
Members should create their own trade plan first before checking mine. The goal is to teach them how to trade forex for yourself, NOT to just blindly follow me or anyone else.
The €uro finally made a move up on Friday along with other majors, so reversal or retracement?
That is the question 🙂
The €uro/$ in recent months has tended to go to sleep during the week, especially Mondays and then liven up Friday.
It did it once more last week.
At the moment my feeling is that this is most likely a retrace before the trends resume. I could, of course, be wrong, but after a period of sustained $ strength, it was to be expected that there would be at the very least a pause for breath.
Fridays USA flash manufacturing came in worse than expected, hence the $ weakened a little, but one piece of bad news is not going to see the trend reverse in a day.
As per recent posts I continue to prefer to trade the trend and last Tuesday I showed in the live session how I entered the Euro/Aud long for multiple reasons using this strategy and it went over 250 pips whilst the €uro/$ initially went nowhere.
You can see how and why I took the trade in last Tuesdays live session and here was a short video showing how I had managed it:
I also used the same strategy to help a student avoid a losing trade on the Chf/Yen, here was my explanation, before the event, why I did not think his idea to short was a good idea: It went 250 pips the other way!
The Forex Week Ahead
The $/Yen finally broke above 110.00. Now that becomes of interest to long it. There is also a lot of talk amongst commentators that the Yens days of being a safe-haven currency are over and I tend to agree. It hasn’t made sense to me for a few years as the Japanese economy is screwed and they are still printing billions of Yen notes annually to prop up their economy.
Thankfully I had explained in last Sundays analysis why I preferred the Aud/Yen last week and that worked and certainly was a better call than shorting most of the other Yen pairs. I was asked by a student why I had suddenly gone off the Cad Yen and switched to this pair and the honest answer is I think it just comes down to 10,000 + hours starting at charts!
There is not much scheduled red flag news and Trump has been quiet so far this weekend, let’s hope the markets are a little more predictable this week.
Emas: I often get asked why I place so much faith in the 200 & 55 ema’s- see today’s video below. The Gbp/$ again bounced to the pip off the daily 200ema. I cautioned against shorting it, until or unless it broke, so that should have kept you out of a losing short. The Chf & Cad/Yen bounced back down off the daily 200ema. The Aud/Yen off the daily 55ema, the Cad back up off the daily 200ema. You get the picture 🙂
I have not changed my bias on any pairs. We still see $USA strength and nothing has changed fundamentally thus far to make me believe there will be a sudden crash. There is always, of course, the chance of something extraordinary occurring, but there have been none seen so far this weekend. I did my analysis on Saturday so if anything does change I will update you here and in the live session on Tuesday.
Gbp/$: “I am still Neutral”(this is what the experts on the TV say when they have no idea)!- If in doubt leave it alone. It bounced back up off the daily 200ema to the pip. I would not short it until or unless that breaks and closes on a daily chart. The news was quite positive last week so no apparent reason for a drop so my bias is more to the long side, but not now. If it closes clearly above 1.3000 then I might be more interested later in the week.
Euro/$: For weeks it was oversold. Finally, on Friday, we had a mini-surge back up but I will not buy it. There is a weekly pin bar reverse candle suggesting a move higher but my bias is still short. It has now broken and closed below 1.0900. If you are trading intraday it is the first place to consider a short BUT it is miles away from emas and anything to place your stop behind, so not for me. I feel a lot more confident to place a forward order at 1.1000. If it moves higher then 1.1100 is the next.
Chf: The Chf rejected at the daily 200ema which was a big clue the Euro would go up. It then stopped at the daily 55ema, I am leaving for now and prefer the Euro.
Euro/Gbp: Bias is still short. Pulled back a bit last week. 0.8500 is the first area I will look to short. If it moves higher I will take it again, half at 0.8550 and the second part at 0.8600
Aud: It’s in a multi-year downtrend, I only want to short. 0.6665 is an obvious area of interest, but I don’t have enough reasons for the stop, Personally I prefer a pullback to short and 0.6800 is the place for me for multiple reasons.
Nzd: Same as last week: My bias is still short. I would not swing trade it back up for the same reasons as the Aud. 0.6500 is the spot for me to consider a short. I will split this order in two. Half stake at 0.6490 and the 2nd half at 0.6530- explained in detail in the video.
$/Yen: Finally it broke 110.00 which is MAJOR previous support and resistance. I said last week “To long I need it to break and close above 110.30 on a daily chart” it has now done so. 110.00 is now the key area for me to long, but there are a number of options, so on reflection, I will split the trade into 3: One entry at 110.30, the 2nd part at 110.100 and the 3rd at 109.55. Last week I showed how I used this scaling in strategy to good effect on the Aud/Yen. It’s just a way to try make sure I catch at least part of the order, but if there is a deeper retrace I don’t place all the risk on the 1st part.
Cad/Yen: 85.00 is now the key area. Until that breaks my bias is still short. If it does break then I will look for an M2 pullback long. 87.00 looks like a good overall target 🙂
Aud/Cad: 0.9000 is an “A” grade short for me, but after last weeks further drop 0.8890 now looks interesting, see the video.
Cad: Last week I placed an order to long at 1.3210 as per my analysis. I cancelled it on Friday and Murphy’s law, especially with this pair, it did it late Friday 🙁
This is still the key area. I show in the video how my first plan is to long it there BUT if it breaks and closes on a daily below I will M2 short it! Be flexible and consider all possibilities, explained in the video.
Aud/Yen: For those new to the idea of scaling in here are my notes from last week and you will see how it worked for me “…..suddenly it now stands out as the best Yen set up in my eyes! I show in the video how I will play this around the numerous news announcements this week……..I am looking for a pullback to short. 74.40 is an intraday, 75.00 is a forward order for me.”
In the live session, I showed how and why I scaled in, placing half of the order at both points. The bottom one hooked, the top did not BUT at least I caught part of it.
75.00 is key once more this week, I will short again if it gets there.
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 in Pierre’s corner.
Watch the video for more detailed explanations of this week’s detailed analysis and trade plan.
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Forex Reversal or Retrace
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