Forex World UK: September 2009

Wednesday, September 16, 2009

Dow Analysis 81209

Dow Jones Chart

Back in February I did a number of Dow Jones analysis’ where I predicted the temporary bottom of 7000, it actually went to 6500. Since then we have seen an uptrend, but very important, the uptrend cannot be counted as an impulse. It is a correction and most likely an WXY double zigzag correction.

The prediction in February was a Dow back to 9500-10000 area. That is happening as we speak, we are already at the bottom of the target area and caution is now required for a reverasal. (For a history of the analysis click the “Dow” label bottom right of this webpage.)

February Chart

Current Chart (weekly)

Comment:

Elliott Wave:

With WXY double zigzags we are looking for equality between wave W and wave Y, that would put the dow at 10532.08 a little over the 50% fibonacci retrace from 14217 to 6460.

What you can see here in the longer term is that this is counted as an expanded flat. The top of 14217 is actually a wave B. Even if counted as a wave (5), we would still have the end of wave 1) at 6460.

What you cannot see on this chart is that wave (2) of supercycle degree was rather sharp. Elliott Wave guidelines say that when wave 2 is sharp wave 4 will likely be a sideways correction, a triangle of some form. That means we will be in for a long recession.

Indicators (RSI & MACD):

MACD is turning bullish on the weekly chart by crossing the o (zero) line, it will be interesting to see if it can stay above zero on a downturn. A cross back down will be a vey bearish sign.

Fundaments/News:

Fundamentals are all over the place. Optimism is at a high, giving caution to us contrarians. Best thing is that all economists are falling all over each other to say what kind of recovery this is, u, v, or w recovery. 2/3 says this is a u shaped recovery. Well, we have a “v-shaped” reversal from the 6460 low, but are no way near a recovery yet.

Disclaimer:

This newsletter gives a trade setup for use of the author. This is not trading advise and the author shall not be responsible for trading losses if the reader decides to trade upon the information herein.

Trading, especially currency trading or trading where large leverage positions are used , can and will cause huge losses.

Analysis_091509_gbpusd September 15, 2009

Trade Notebook

Date: Tuesday, September 15, 2009

Currency Pair : GBP/USD

Outlook: Bullish

Support: Resistance:

1. 6250, 1.6100 1.6750, 1.7250

Elliott Wave:

The move from early July can be counted as an expanding diagonal. These diagonals move in 3’s and we would currently be in wave C of 5.

Classic:

A base is set at 1.61 and again at 1.63. Price looks to test 1.6750 again. Buying the dips is justified, outlook is bullish with MACD crossing up.

News (EST): 8:30am USD Core CPI m/m

Trading Update:

The trade outlook is bullish. Buy the dips and set targets for 1.66, 1.67, 1.70 etc. Stops should be below recent low around 6250.

If you want to take most advantage of this trade, open multiple positions and close out a position when the target hits, leave other open but move the stops into profit area. Watch your Money Management, don't expose more than 3% of your balance at any trade!

Thank you for reading this update.

Disclaimer:

This newsletter gives trade setup information for use of the author. This is not trading advise and the author shall not be responsible for trading losses if the reader decides to trade upon the information herein.

Trading, especially currency trading , can and will cause huge losses.

Analysis 091009 eurusd

Trade Notebook

Date: Thursday, September 10, 2009

Currency Pair : EUR/USD

Outlook: Bearish

Support: Resistance:

1.45, 1.42 1.46

Elliott Wave:

We are in a wave III of 3 and price is trying to penetrate 1.4619 where a strong 61.8% fibonacci resistance can be found from 1.60 to 1.23. Looking for a correction wave 4. Wave 2 was rather sharp as a guideline wave 4 will be a complex correction. As a ruleprice cannot penetrate 1.44. in that case the price is invalid.

Classic:

MACD crossed high indicating a strong rally ended and looking for a correction, or bigger degree bull flag. We have a higher high indicating that the market wants to go up in the short term at least. Strong resistance at 4619.

Trading Update:

Awaiting the correctional move. Try to buy the dips with stops below 1.44.

Disclaimer:

Trading, especially currency trading , can and will cause huge losses.

Analysis 090909

Trade Notebook

Date: Wednesday, September 09, 2009

Currency Pair : EUR/JPY

Outlook: Bullish

Support: Resistance:

132.20, 131.00 135.00, 136.00

Elliott Wave:

Wave e of the triangle seems to be completed. Now expecting a 5-wave move to at least 140. Price should break the upper channel and we could reach 155. Price has reached apex and could correct a bit.

Classic:

The resistance line from the downward channel is taken out improving the bullish side somewhat. Price is also trading above the 20MA which now acts as support. MACD is crossing up and RSI reading is improving.

Trading Update:

Light buying is justified with stops below 131.

Disclaimer:

Trading, especially currency trading , can and will cause huge losses.

Analysis 090809

Trade Notebook

Date: Wednesday, September 08, 2009

Currency Pair : EUR/USD

Outlook: Bullish

Support: Resistance:

1.42, 1.40 1.4450, 1.47

Elliott Wave:

The expanding diagonal is maturing. Target is the top of the channel, 1.47. On this pattern it can overshoot the top of the channel.

Classic:

Massive resistance at 1.44 is taken out and now acting as support. Oulook is longer term bullish.

Currency Pair: EUR/USD

Comment:

Elliott Wave:

We are in a wave iii of 3 and have taken out the 161.8% fibo extension of wave 1. The 261.8% extension is at 1.47. Should see a retest of 161.8% extension in form of a wave iv of 3.

Classic:

A bull flag is forming between 1.4450 and 1.45. The 1.44 resistance should now act as support.

Trading Update:

Long with stops below 1.44. Target 1.47.

Disclaimer:

Trading, especially currency trading , can and will cause huge losses.

analysis 090309ii

Trade Notebook

Date: Thursday, September 03, 2009

Currency Pair : EUR/USD

Outlook: Bearish

Support: Resistance:

1.42, 1.40 1.4377, 14450

Elliott Wave:

In Elliott wave terms we have just completed another 5 wave move up and on the daily chart we can see a truncation forming. Truncations in diagonal 5th waves are extreme and usualy result in a strong reversal.

Classic:

We are still rangebound between 1.42 and 1.4450. Support at 1.42 is under pressure but seems to be forming a base. Support held under pressure on 4200 yesterday. Wait for a move outside of the range for short term direction.

Indicators:

MACD above zero, still showing open meaning short term bullish potential. Price is above 20MA, which now serves as support.

Trading Update:

Short with stops at 1.44 as soon as price stabalizes from its impulse move up.

Disclaimer:

Trading, especially currency trading , can and will cause huge losses.

Friday, September 11, 2009

Friday, September 11, 2009 Kiwi Breaks Zone

I've been keeping a watchful eye on the Kiwi and some of us traders may already be in this trade. It's a great looking trend and price has steadily been going up since March 09. Price is above the Value Index, which also confirms that we are in an uptrend. Price has previously broken round number after round number but since mid August it started ranging, a clear sign that the bears and bulls were fighting it out with price not knowing what to do. Yesterday we had a good sized bullish candle allowing the buyers to break above the resistance zone and The Figure.

We're at an interesting point on this pair. As you can see on the chart we have another resistance level looming above which is also at the round number. We should be wary of this and if already in a trade keeping our stop nice and close. Check your favourite indicators and see what they're telling you. You'll see stochastics is showing a false bar on the top, suggesting strength in the uptrend.

It's also worth checking in on the weekly chart - MACD is showing us divergence and we're also at a fib level. We may see consolidation after having such a long run up. It will certainly be interesting to see how this pair develops next week - will it continue up with strength, retest resistance as support before the continuation, or could this still be a fake breakout?

As the weekend approaches, take some time out to celebrate something great in your life - celebration and rewarding yourself is so important along this journey. Also ensure you analyse your trades from this week so you can learn and continue growing.

Enjoy the weekend.

Thursday, September 10, 2009 EURCAD squeeze

Good evening traders,

A very warm welcome to our newest blogger Sonia. Thank you for your kind words, I am sure you will achieve great trading success and inspire others to attain the same through your contribution.

Tonight's chart is the EURCAD. From the below chart it can be seen that the major trend on this chart is down. Price has been coming into a squeeze recently. The VI has been playing a major part in providing resistance particularly of late. This together with the reversal candlestick (doji) and the RN provide some good indication of a possible reversal/pullback. In addition there is some short term MACD divergence as well. A look at the lower timeframes will likely aid your entry.

Good Trading!

Watchful eye on AUD/CAD

Good Morning Traders

Before I even begin my contributions to this website I would like to thank Javid and Anne for allowing me this wonderful opportunity. Having been an avid reader of the blogs for the past year, it’s still hard to believe I’m actually here! Trading and most definitely becoming a contributor to this site was something I never would have dreamed possible. But it is.. with sheer determination, commitment and discipline anything is.

I would also like to say a very special thanks to Ash & Bijal who have helped and mentored me so much on this incredible journey. You’re both a true inspiration and I only hope to follow in your footsteps and give something back by helping readers through the blogs.

And not to forget my fellow bloggers, thank you for your commitment with writing these blogs with such commitment and enthusiasm. They’ve really helped me to advance my trading knowledge and understanding of the markets.

Today I’m looking at AUD/CAD. Let’s take a look at the weekly timeframe to start. You can clearly see price is currently in an uptrend. Price crossed above the 200 MA and then retested it as support, potentially giving us the springboard it needs to continue on upwards with the trend. You can see the bullish flag formation, which has also tagged a fib breather level. We’re now approaching a S/R zone and a RN so it will be interesting to see how buyers and sellers react. Note the bullish engulfing candle at the Value Index support suggesting a strong signal for a continuation.

Now let’s take a closer look at the daily chart. You can see price broke the squeeze formation upwards, favouring our edge to the upside. Price found support at the RN and we have a spinning top as our extreme candle at TL support, which is also nearing the Value Index. This is definitely one to keep on the watchlist – will it break through the resistance looming above or will it have a moment of indecision or even reverse? We can see with yesterdays candle there was some indecision in the market, so we may see price lose a little steam.

As we know, the market will do whatever it will do – so we simply need to be patient and neutral and wait for the market to make its move. Think about your edge, choose the appropriate strategy from your dynamic trader toolkit and then most importantly take action. As always please carry out your own analysis.

Here’s to great trading!