USDCHF - 2011 Outlook

WEEKLY



The weekly chart has been on the decline from 1.17500 since May 2010. The trendline is being respected so far.



DAILY


The daily chart is also on a decline and presently unable to rise above the 50 point mark. In view of the current weakness of the dollar, the pressure seems to be on the downside. The daily RSI is currently on 38+. But historically USDCHF is cable of drastic movement up and down it can go as low as 16.67 point on the daily RSI and as high as 80.12. It is always helpful to understand the currency pairs you are trading.



Recommendation:



This is the time to wait until the daily RSI falls below 70. At least 2 daily candles will alert you when to buy or sell.



The weekly, daily and H4 charts are attached as usual.

EURUSD - 2011 Trade set-up

The EURUSD weekly chart is on an uptrend a continuation of the reversal of the fall from 1.51387. The current move started from 1.18757 and is currently moving into a wedge between the upper and lower trendline. A break of the trendline will determine the next direction

The daily chart is our trading guide. The daily chart has been on the uptrend move for the past fifteen days. The daily RSI is current around 65 point mark. It is getting ready short. Historically EURUSD is capable of going up to 78.750 mark. It is therefore necessary to watch the current move for the next few days until we see the first full bear candle. As you can see there is no bear candle now. Furthermore, a break of the uptrend line on H4 will confirm when this happens.

The weekly, daily and H4 charts are attached

GBPUSD - See where we are!

It's always a nice feeling when a set-up plays out nicely. The descent has begun, its is a matter of time before we reach 1.56000 while 1.53500 is beckoning

See where we are now on H4 and daily

GBPUSD - 220 Pips concrete zone

The Cable is currently forming the left shoulder of H&S on the weekly chart. A set-up which I identified when price was around 1.53500. As long as 1.61000 is not broken this set-up is still valid.



The daily is currently consolidating between 1.58821 and 1.60247, while the concrete zone is 1.60550 and 1.58300 (about 220 pips). Until a daily candle opens and closes outside the box, this zone is still valid.


How do you trade the current set-up? My view is the cable is primed for a fall. In this case follow H4 chart and short anywhere close to the top of the concrete zone, using M15 chart for entry.



Note that it is the big players that determine where they want to take the price. However, the concrete zone trading strategy will expose their intention. The first signal is that daily candle rise or fall within the concrete zone and lose outside it. The next signal is that a daily candle will open and close outside the zone. Then you will know the direction of the big boys.


I attach herewith the daily, h4 and m15 charts in support of the above analyses.



Enjoy your trading!

USDCAD - 2011

The weekly trend for USDCAD is downward and the daily chart is operating within the downtrend until price clearly breaks outside the trendline.


The recommended option is BUY using the daily RSI. SELL is huge risk until price clearly moves to the upper zone. The buy zone is indicated on the daily RSI with yellow color.


The recommendation is to wait until the RSI falls back into the yellow zone and buy the next bull candle. H4 will confirm reversal and M15 will entry.



The weekly and daily charts are attached.

AUDUSD - 2011 Recommendation

AUDUSD is still on an upward trend. The Weekly trendline is in yellow colour and the daily trendline is in blue colour. The currency is current trading within it historical high. The descent has begun on the weekly chart. There is real possibility of further fall. The trading range between August 2010 to date is 1.00241 and 0.95092. In between there is a minor support at 0.98037.



The current fall on the daily is approaching the oversold territory. The recommended option for trading this currency is SELL using the daily RSI. BUY is very huge risk For clarity, I have indicated the sell zone in yellow colour on the RSI.



This is the time to WAIT. Wait until price gets back to the yellow zone to short.


Happy Trading!



See the weekly and daily charts above

GBPJPY: Trade Set-up

Trading without knowing what is happening on the weekly chart could be described as partially sighted trading. This is more important for the GBPJPY. I have earlier posted critical levels for the dragon. If you want to trade GBPJPY, learn these levels by heart and never trade in between. You can check some few posts before this to refresh your memory on these very important levels.

Let us examine our set up for GBPJPY as follows:

a) The weekly is on a bullish run for the past three weeks and has moved by about 700 pips so far

b) The weekly RSI since September 2009 has been reversing around 50 point mark

c) The daily RSI is currently around 65 point mark – it is get close to
overbought region

d) The next minor resistance is at 133 and a major at 135 area

How to trade this set-up

1. Monitor daily RSI until it reaches around 70 point mark
2. Wait for the next bearish daily candle around this area
3. GBPJPY will give you at least three daily candles or pin on a daily candle
to signal reversal
4. The top for now is 132.54
5. Monitor the next two to three daily candles.
6. 131.24 is the line on the sand now, wait for the daily to
7. Follow the train and know the first stop is at 130.00, with 126-125 area
being the next. Below 125, the possibilities are endless 123, 120, 118, 117.
8. In simple term, get ready to short and look out for at least three daily
candles or pin on a daily candle to signal time to pull the trigger.
Fortunately, yesterday’s (18/1/2001) daily candle gave us the pin.

Happy trading!

500+ Pips Trade set-up

Welcome to a new trading year - 2011. What I will be discussing this year is taking our trade to higher levels. Looking for those highly profitable set up for the major pairs. This first posting will be on the GBPUSD. The principle are simple as follows:

1. We rely of the weekly chart for the overall direction
2. The daily chart determines whether to buy or sell
3. H4 or M15 for excellent entry.

Based on the above analysis, here is the set up for a potential 500+ pips trade based on Head & Shoulder on the weekly .

a) The weekly trend is up
b) The daily RSI is getting close to 70 RSI and currently withing a possible left shoulder of Head & Shoulder on the weekly chart.
c) It took about 21 days from when the signal was given on the daily and roughly 750 pips so far.
d) The yellow area is where we are watching now. A daily open and close above 1.61140 area will invalidate our head & shoulder set-up. If this happens a second kiss of 1.63000 is possible to give us double top.

Until this happens our H&S is still valid. Furthermore the daily RSI is currently kissing 70 point mark. This means the cable is getting ripe for short. However, we need to see where the daily candle closes today.

If you are ready for a 500-pips or more trade, you can begin to short between 1.610000 - 1.630000 or the first reversal candle (bear candle on the daily). Everything is in the chart!

Enjoy your trading!