Market Commentary
EUR/USD
Resistance points: 1.2712, 172722, 1.2750 and 1.2780
Support points: 1.2692, 1.2677,
1.2665
The Eur continues to move up after last
evening’s
news though it is still within the daily consolidation area. If it breaks
past the resistance it is currently near (1.2712) shown below on the 1 hour
chart it could be headed for testing the next level highs.
The 15 minute chart below shows the price level testing the immediate resistance
point and the 15, 13 and 10 minute chart all have a divergence on the MACD
which could signal a reversal in the quiet market
time this evening. In order to trade against the trend I would look for another
confirming indicator on a smaller time frame chart and then look to take 5-10
pips only. Overall I expect it to move up to at least the 1.2733 level fairly
soon and test the previous highs.
GBP/USD
Resistance points: 1.8825, 1.8850, 1.8878 and 1.8920
Support points: 1.8778, 1.8752, 1.8730
and 1.8685
The GBP used to move generally with the EUR though with more volatility and
fake breakouts. Lately this correlation has not been as tight as it used
to be and last night was a good example of this. Right now the prices are
at previous consolidation levels as shown by the daily chart below.
This pair is at the midpoint of several indicators with no clear short-term
direction. If range trading this pair, make sure that more than one indicator
is at an extreme before entering the trade. I like to use the Bollinger
Bands and RSI together and two chart time frames to confirm the setup.
USD/JPY
Resistance points: 118.90, 119.13 and 119.40
Support points: 117.73, 117.45, 117.20 and 117.00
The JPY continues to move up weakly with a divergence on the MACD (daily
shown below). It seems determined to test the previous highs from last February.
The 4 hour chart has this same kind of divergence on it as well. So while
the trend bias is up we need to be aware that it run
out of steam when it hits the previous highs.
The 15 minute chart below shows that we are at/near price
equilibrium (small Bollinger Band range near previous price consolidation,
small MACD and RSI in middle of the range) right now with no pending setups.
Range is currently between 118.30 and 117.00.
General Remarks
Sometimes you have to know when not to trade. If you don’t see a setup you
are comfortable with and confident trading then take a break. Entering trades
because you have the time and are bored is a good way to lose money. Your
confidence is low going in to the trade so you are likely to be whipsawed
by every little price movement.
Before taking any trade it is important to have at least two and preferably
three trade confirming indicators. If more than one time frame chart has
the same setup that is a further confirmation and can help with pip goal setting.
Make sure the indicators are of more than one type (i.e. trend, oscillators,
fibonaccis). For instance
Bollinger Bands and Moving Averages are both trend indicators so you would
want to have an oscillator or candlestick pattern along with these to confirm
a setup. Most charting software divides or labels the indicators so you can
tell if you are using more than one type.
Elizabeth McMahon is a forex
professional with over 12 years experience in the financial industry. She
has provided extensive services both as a consultant/trainer as well as trader
in the equities, options futures and forex trading markets. Elizabeth is a senior market analyst
at www.forexyourself.com, which is a forex introducing broker specializing in fund management,
automated forex trading systems and education.
You can contact Elizabeth
with further questions at beth@forexyourself.com.