Analys från DailyFX

3 Valid Ways to View the Same AUD/CHF Trade

Published

10 år ago

21 mars, 2014

DailyFX

Talking Points:

”Classic” Pullback on AUD/CHF Weekly Chart
Potential for a False Triangle Breakout
3 Confluent Scenarios on the 4-Hour Chart

One of the more interesting things about trading the forex market is that even set-ups go in and out of season. Today’s trade is yet another variation on the triangle pattern, which has been rather common among FX crosses in recent weeks.

Right now, there’s one occurring in AUDCHF, and even more interesting is how traders with different interpretations of the chart may end up taking the same trade.

The weekly chart below shows a classic pullback and also provides the first level of resistance traders may wish to consider.

Guest Commentary: Classic Pullback on AUD/CHF Weekly Chart

However, as many an experienced trader will have discovered, a pullback consisting of only one candlestick can be tricky to trade, and thus, it is safer to drill down to lower time frames in order to gain a more precise entry.

A breakout from the triangle on the daily chart below provides a different perspective of the same price action. AUDCHF has not yet retested the broken line of resistance, and thus, traders who suspect a false breakout may also be looking for viable short opportunities.

Guest Commentary: Tenuous Triangle on AUD/CHF Daily Chart

This trade could provide excellent overall risk profile if it does turn out to be a false breakout, as that would clear the way for a potential plunge and test of rising support, or even a continuation of the previous downtrend.

There are several reasons to consider the zone of resistance that has been marked by the familiar blue box on the below four-hour chart. The first is that this resistance may be due to a ”flat” consolidation, as Elliott wave theorists may call it. Other traders will simply recognize a textbook range.

Guest Commentary: Key Resistance Zone for Selling AUD/CHF

Another perspective, however, is that AUDCHF may soon form a triple top in order to continue the daily trend, although this is somewhat less convincing due to the consolidating motion prior to this pattern.

The third, and in many ways, the most convincing argument is that the rising line of resistance is due to the rising wedge pattern evident on the chart above. The wedge is composed of five waves (not shown), and fulfills Elliott wave conditions for such a formation. The most reassuring factor is that wave 4, which is the most recent pullback, slightly overlaps the top of wave 1, and that tends to signal a potential end of this upward move and a continuation of the longer-term downtrend.

In all, the resistance zone has been estimated as 0.8022-0.8063. This represents a risk area of merely 41 pips, and even a reasonable gesture towards trend continuation on the daily chart would be sufficient to make the trade worthwhile.

The ideal triggers for this trade would be found on the hourly chart (not shown) in order to utilize an even smaller stop loss. Viable triggers would include bearish reversal divergence, pin bars, and/or bearish engulfing candlesticks on the hourly chart. As always, be prepared to take two or three tries in order to hop on to this move.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

What’s inside:

EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
Resistance in vicinity of 11825/80 likely to keep a lid on further strength
Targeting the low to mid-11600s with more selling

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form