New book by Larry Connors Click here Improve your trading - See how
EUR/USD
Resistance points: 1.2738-44, 1.2760, 1.2790, 1.2805 and 1.2825
Support points: 1.2700, 1.2670, 1.2660, 1.2500 and 1.2540
This pair moved up to resistance on the 4 hour chart (below) and has since back off. We are in the middle of everything in a “wait and see” mode. The price bars remain on support on the daily chart. Wait for a break out past current ranges keeping in mind the prior highs and lows and support/resistance points. There probably won’t be much action until the news reports.
Now this is a nice picture of consolidation during a light trading volume time (15 minute chart). If prices break below support there is a slight down bias heading into the evenings news trading, barring unexpected bad dollar news. Quick traders like me who like to amuse themselves in the evening could even nab a few pips on the way down to the support at 1.2700 (you can see that on the left of the chart) if the smaller time frame charts show it breaking down.
GBP/USD
Resistance points: 1.8890, 1.8905, 1.8963, 1.8988 an 1.9030
Support points: 1.8835, 1.8815 and 1.8785
The GBP broke out to the upside on news yesterday and has pulled back and prices are in the 38% retracement area now. The 1 hour chart below shows the action clearly. Whether this move continues up on tomorrow’s news is the big question. So far this pair has shown more upside resiliency than the EUR. This is another “wait and see” time that the news will decide for us tomorrow.
USD/JPY
Resistance points: 117.76, 117.82, 118.00 and 118.15
Support points: 117.00, 116.80, 116.50, 116.20 and 116.00
The JPY is trading within a range that shows well on the 1 hour chart below. Until this is broken quick trades like the one detailed below are one of the best ways to trade this pair.
The five minute chart below shows a trade setup and follow-through that made 8 pips during a light trading market time on the open of this pair. I only do this on the JPY. The entry was made near the end of the bar with the red cursor line through it. The RSI was above 70 near 75, the prices were well above the 89ema and they were near previous price highs for the day and the bar closed with a tail above the Bollinger Bands. I tried to get in at 117.75 but my broker didn’t fill me there, I had to be content with 117.73, but it still made the 8 pips I look for in trades of this nature. Sometimes you have to be content with 6 pips. The setup would have been perfect if there had been more of a large move beforehand and it was a higher volume time, so I did not trade it with a large amount at stake. Still, the technicals worked. This setup will also occur on the 15 minute chart and in fact it did agree at the time. You will catch a few more of these using the 5 minute however.
General Remarks
I would like to give credit where it is due since I know you can’t read the fine print on the bottom of these charts and let you know that they are provided by e-signal. They offer many different proprietary studies that can be helpful and many systems are designed to work off of them. We have used them for a long time beginning with stock trading back in the bull market days. They show up well in this format and don’t take up all the black ink in your printer in case you are printing this out.
The support and resistance listed in this commentary have nothing to do with pivot points and if you would like to trade off of those the methods detailed here can work just the same way using the technicals I talk about as confirmation of the setup at the pivot point area. Sometimes pivots and support/resistance points coincide and that makes the signals at those points even more powerful. I have spent a lot of time in the past putting pivots on my charts and there are programs that will put them there automatically, I just like a cleaner looking chart to trade from and found I traded as well without them. This is the kind of thing you have to experiment with for yourself to see what helps you pull the trigger successfully.
Get free forex trading education, forex broker selection help and market commentary sent straight to your email inbox daily for free at ForexYourself.com.
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
