The Art of the Comeback

The charts below are a Canadian dollar vs. USD and the US dollar index

I wanted to dedicate this post to point out how the market can totally be the boss and highlight that some reliable support points or resistance points can be invalidated with the events that go on and even though for the days leading up to August 14 I was correct I had to give back some profits and I am a more cautious bull and recent events have prompted me to possibly change my strategy. 

From my earlier post there were some charts of this Canadian dollar trade that showed an advantage in scaling in where risk is managed by having a very light position and then adding to it gradually and if a shock type of move would occur it would not destroy the trade too much. 

I was able to enter below 1.26421 on average and the higher lows began to show up little by little and the zone of gains was where I did not continue to add to the position it then went above 1.27648 before coming down quickly

the violent move down was 326 pips [relative top to relative bottom].  The rate of this rebound is much faster and more uniform in terms of seeing consecutive bullish candles the breakouts are occurring with more enthusiasm

I'm willing to go along with an idea of this pair below 1.25 or even less.  That would mean that I can get some protection, but that is a worst-case scenario so now the next level of focus is seeing where the resistance points manifest in the chart above current price of course there is a very powerful resist point at the top of where it says zone of gains partial entries. 

The series of lower lows were a little more controlled, that is what the LL means, so the bullish case for this pair  will be tested and there is a lot riding on monetary policy from the Federal Reserve and all the economic data coming out in the next few days and weeks

The chart here broke down to newer lows, which I asked the question as far as is this a mini-climax in selling strength.  

Continuation of Trend

This is trading that happened during the Globex session. When you click on the image below its a daily chart of the S&P500 futres [The Stock Market] called the ES it is trading at 2430.  A news item generated a gap in price and when this usually happens buyers could step in and price would tend to shoot up to 2436 as soon as the market opens or sometime in the early parts of tomorrow's trading session.  On this daily chart you can find the overhead resistance zones which are between 2436 and 2445 that is the congestion that is directly overhead and the other two red rectangles are the areas where price departed quickly and went down an approximate 1.8% from each overhead resistance area.  Those levels should hold but anything can happen.  Below are the price levels where there is a lot of sensitivity where buyers will compete for good deals like 2401 and 2409.  There is a strong chance that with the news about missiles flying from North Korea that the market can go as low as 2385 tomorrow.  The other locations of price shaded in the yellow rectangles are stronger support points which are likely going to happen over the week, but it depends on how fast sentiment changes.  

Potential Bearish Set Up

GBP; British Pound Bearish Set Up

1. Completion of Inverse Head and Shoulders Bottom
2. Exhaustive bullish candle followed by consolidation, next set is break down
3. Prior origin of sell off put in place on 8/21/17
4. Temporary Dollar Weakness

Resetting the Wave Count

I would hope to make the location of this resist point as elegant looking as possible.  1.19 is big challenge for the EUR/USD and so far the Fed is still communicating their policy going forward.

Forex In Focus Dollar or Anti-Dollar

Dollar Index

for a moment I thought the strength of the recent decline was substantial enough to signal a change in trend.  That means most of the progress gained at S1 11,881 would be wiped out by the sellers pounding the index.  Because the market can change on a dime I had to be willing and able to call a change in direction but in recent days there was a consolidation (Shaded yellow oval) that would mean the rally could base and rally again.  This rally then base than rally, is more of a pattern that we are looking for in a bullish sequence.  So the dollar index printed four distinct higher lows which are highlighted with the green arrows.  The bullish engulfing candle was for August 22, 2017.  That also begs the question if the index can make it to 12,038 or the R1 and R2 locations above which would confirm the extra strength for the dollar being that it has had some trouble climbing to 12,000.  There is more news about monetary policy coming out so that can be a driving factor.  As always I prefer to have two supportive zones and two resistance zones on a chart to clarify and make a strategy more tangible no matter what happens.  The moving average above also suggests that price can drift toward that price also

Goal Revisited

I did not trade this way but only partially.  A lot of times trading you will find that sometimes your targets not only are met but they are exceeded.  This excess text box at 111 is where I felt price can begin you to tighten and head down.  I was not heavily involved in this pair but this is a 30 minute chart and the area labeled boost was where I previously wrote about it preparing for a rally so now that it is down in this 109 territory it can still bounce a little bit but as strong yen would bring it lower like 108.507 and 108.19 judging by the strength of these recent to candles it would seem like 109.50 is likely because it is coming off and origin of a powerful rally

The EUR/USD has been waiting on direction from monetary policy authorities like the Federal Reserve and ECB and for that reason I believe it is chopping around even though the daily chart does not show a tight range it still has been acting ambivalent but it has been hitting temporary highs that are shaded in red the strongest demand we have seen is in the green rectangle and some of the buying points at S2

Loonie acting Looney

Is this just an interim correction? when I first pointed out how powerful of the resist 1.27687 was I did not think I was in for such a surprise because the height from that price to now came out to a 252 pip drop.  So the strategy now is to find support points and test their relevance.  There is a lot of consolidation going on and the height of the blue candles are clustering and it can signal some potential upside.  A possible observation is that lower highs are forming and could lead to plenty of overhead resistance but the two blue horizontal lines shown at 1.25277 and 1.25405 only show that price is reacting to this buyer support with some sensitivity.  If support zones do not get respected it would continue the trend of lower lows and lower highs

Putting One Candle In Context

This will be an expanded study of how a reveral candlestick will work in a bullish trend 

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