Wow, I’m A Trading Indicator Now
A fellow lady trader, Raghee Horner, using her @faithmight indicator LOL. A term she coined. I love it! And I’m flattered :)
Tag Results: technical
My First New Year Review of GBPAUD
2010 saw me add a new currency pair into my portfolio for the first time in 4 years. I, like many traders, couldn’t keep from noticing the Australian dollar and its performance during 2010.
Since the start of the new year however, the Australian dollar has weakened as the technicals finally played catch up. The GBPAUD was crying for a retracement even as it continued to move lower.
Last week finally saw the corrective rally that I had been waiting for.
Australian dollar had the bearish close on Friday below the parity level. The subsequent candles also closed below parity as the AUDUSD begins to retrace its blazing hot bull rally of 2010.
“Pros care very much about who is in the markets and why markets are moving. The principles provide a framework for making sense of market behavior, which then can be used to filter the setups provided by charts, cycles, and the like. The really good traders understand markets; they don’t just predict them.”
(via Thought of the Day… « 50’s Blog)
I read this as traders must look at fundamentals even if they don’t trade the news. 50 took it as traders must look at the charts and understand the different levels where flows could possibly change. Two different takes and both right depending on your trading style. I love the differing perspectives.
My article this week on StockTwits.
EUR/GBP Struggles Below 0.84
Breaking that 0.8400 level was a monster bearish move by the EUR/GBP currency pair. The descending triangle that was forming on the weekly chart played out. Now that we are below that level the GBP will invariably strengthen. The hourly chart above is a snapshot of the end of last and the open of this new week. After gapping higher to a high of 0.8359, it is looking like a failure of the 0.8300 whole number is inevitable. The smaller Fibonacci is the move higher at market open while the bigger Fibonacci measures the start of the move on Friday at 0.8208 through the top today at 0.8359. This larger Fib lands at important levels. Keep an eye on these levels for further strength or weakness in this pair.
Fundamentally, still the market remains focused on the Eurozone… to the benefit of the Great British pound.
This is why I love tethering. All mobile devices should. I did the math in my head and can post the 10 minute chart and pull the trigger. All while riding to the airport. SMH at technology. I like the hourly chart too.
A More Meaningful Correction This Time?
After a decent correction and a break of the range earlier this week, the GPB/USD made new lows in today’s session at 1.4870 but completely reversed and made new highs 10 pips from the 1.5000 whole number.
The daily chart has a strong downtrend that recently made 2 bearish waves from 1.5815 to 1.4780. In the circle is what may be shaping up to be a FAILED 3rd bearish wave which looks to have bottomed at a higher low with today’s 1.4870 low.
While I would consider a break above 1.5000 bullish, 1.5033 is the area to watch as the 50% Fibonacci retracement level of this latest push to the downside. A break and subsequent close above this level sees the pair move back towards 1.5200 where prices topped out on at the start of this trading week.
Update on EUR/GBP
The “breach” of the 50% Fib on the above weekly chart had no mojo at all turning into a mere price probe. The 0.8813 level provided strong resistance as price made a high of only 0.8816 and has now staged a deep pullback from that high. We’ve seen strong resistance at these Fibonacci levels before from the EUR/GBP so this price action should have been expected behavior.
That bullish chart pattern on the hourly chart also held. I was fooled by the false breakout below the rectangle’s bottom at 0.8700 to 0.8686. If it had been a sustained break below there would have been a confirmation close below the bottom of the rectangle. But price immediately regained the whole number and went on to rally to a high so far at 0.8816 in the next 2 trading sessions.
Now during the Asia session, the EUR/GBP has already staged a whopping 100% retracement of yesterday’s rally with a low on the day already of 0.8764. Though price is finding support at this level, we need to be aware of what this level of retracement means and that is a reversal of the intraday uptrend.
I am staying away from this pair at the moment. EU rumors in regards to soverign debt is really affecting the euro. Also, news from the UK is due out in a couple hours (IP and BoE inflation report). I’ll be watching the 0.8813 level. If price finds resistance again at 0.8813, I will look for price to reverse from there. On the other hand, a break of this level targets former-support-turned-resistance at 0.8954.
Trade what you see folks, not what I think.
The $GBPUSD hourly chart is getting chopp-Y! This is pretty characteristic price action for the pair after a breakout. More importantly, it tends to signal a continuation of the current (up) trend.
I still believe that the pair corrects further. I am surprised that the recent rash of stronger-than-expected US data this week has not translated to a much firmer USD. Because the fundamental landscape this week has not has affected price action as expected, maybe the pair will only correct to 1.5750 rather than 1.5500 as I originally expected.
Since tomorrow is Friday, I will remain on the sidelines and gear up for a much busier week in the markets next week.
The daily chart of the $GBPUSD shows a clear uptrend price finding resistance at the 1.55 level. 1.55 is a large quarter point and major half number. The hourly chart shows double top at today’s high of 1.5512. So this signals a possible correction. If we get a correction, it will be at this level (or not). What is clear, however: Any dips is an opportunity to buy.
I am watching 1.5439 for buying opportunity as it marks the 38.2% retracement of today’s move. Any price correction beyond 50% retracement at 1.5416 would be a big red flag of a reversal of the intraday trend back towards 1.5250 large quarter point. However, if price remains in tact and news tomorrow (BoE AND FOMC minutes) continues to support the up trend, then look for price to move beyond 1.5512 and towards the next large quarter point at 1.5750.
My game plan is to enter a limit buy order at 1.5450 with at target of 1.5625 and a stop with 1:5 risk reward ratio.
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UPDATE: I missed my entry by 3 PIPS and missed out on the second wave of this rally. Such great analysis so what did I do wrong?, you ask. Well, I’ll tell ya!: I forgot to account for the spread! LOL!
Technical Analysis on $GBPUSD Finding clear support at the psychologically important whole number level of 1.50, the correction at the end of last week gave cable traders a great opp to go long. See!! I am bullish cable.
New highs today with expected retracement occuring now. If the pair remains above the 1.5250 large quarter point and continues to find support there, we have an established up trend here. Yes!! The GBP/USD is trending again!! My trading style flourishes best in a trending market.
Gotta dig into UK fundamentals to confirm this new up trend. US fundies looking dismal for the USD. See how 1.50 held the key to whether we would have a continuation of the previous down trend or a reversal? Since breaking 1.50 (a large quarter point, a major whole number, and key psycological level) the GBP/USD has been headed higher. So how long will this last? The fundamental landscape will dtermine. Stay tuned for that analysis.
My first week back and I got a good call. (yes, I am tooting my horn. Ok. I’m over it.)
Closing the week not only above 1.50 but at the next large quarter point at 1.5250 with a price of 1.5233. Still within 25 pips, this a bullish signal. Expect retracement.
