The time intervals that I am using in all three of these
charts for the EUR/USD are the daily time frame, the eight hour time frame, and a three-hour time interval
The daily chart of the euro against the dollar shows
supportive trendline that had several points of touch and it appears that
prices are starting to deliberate before a possible downside break. What I wanted to point out were the two
horizontal arrows showing bearish candlestick activity [8/4 and 8/14; where 1.170 holds critical supportive structure] it seems that there is a
greater frequency of negative closes in this snapshot of time - the rate of red closes is becoming more frequent. I would further point out that the green zone
indicates the last hope for the euro bulls if they cannot hold price above those supportive wicks, it would signal further strength for the dollar. There is an important meeting coming up in
Jackson hole where the European Central Bank governor Draghi will be speaking but that
is not for another two weeks and the time in between is important because it allows
for the market to digest whatever information will be coming down the pike from
the Federal Reserve this week and any other political events that would signal risk on or risk off.
Whenever I point out lower highs or lower lows or higher
lows or higher highs I want to be as deliberate as possible in showing where
they manifest on the price chart so this image is a conceivable target where
the buyers are standing ready to attempt to push price higher in the green
shaded zone below. In the 3 hour chart you will see a lot more of the
tactical maneuvers for trade entry and trade exit. Because this pair gives me so much more
leverage I prefer to trade it on a higher timeframe where more opportunities
present I can weave in and out of it without having overnight risk.
In the 3 hour chart there is a tremendous amount of distance between price and those three levels for S-1 the distance is a target of 98 pips for S2 the distance is a target of 130 pips and the goal for this critical juncture target is 182 pips. If I can reframe my mentality I would have done that the entire way higher as the dollar got weaker. I thought it would be helpful to visualize the changes that happen when price coils in the yellow shaded rectangles when price was trending higher. Also there were two cases where price coils in the red shaded rectangles and then broke out harshly to the downside. To me it feels like it takes longer for trends change and they will offer us a lot more confirmation if the dollar is coming into a more commanding bullish phase. Watch for commodities too!
30 minute Chart of USD/JPY To keep my risk tight I decided not to fully engage this
long trade in USD/JPY even though all the stars were aligning and it was a
great set up for me I just had Pro dollar and anti-dollar trades on already so it was great that my analysis proved to be correct and I think there is a
chance for even better moves to come. The
price blasted through the levels I set as potential objectives and on the daily
chart it is even more clear
Daily Chart of USD/JPY: What I wanted to accomplish with the shaded ovals were times when bullish candles were
overtaken by bearish candles and in each of the yellow ellipsis they were
followed by downward thrusts. The past
two days are a little bit different but I also expect that Yen to be somewhat
undecided as political tensions have eased.
It would have made a terrific shortselling opportunity but below 108.75 is
a huge pocket of air that would coincide with some type of panic event in the
equity markets. If more support gets violated this in my opinion we will have so much more growth potential and ability to scale in positions with Yen related pairs.
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