March 17 – March 22 2019
How did these play out?
CADCHF – The four hour chart was interesting and the quick up and rejection down with basing at support is the shorting zone for 100 pips potential on this trade
EURUSD – The thrust up was a concern however the pause on the 14th of March was a pullback which turned this into a complex correction. This is a decent example of a failure test of highs as momentum rockets through resistance and gets kicked back. The four hour chart shows this very well and volitility compression with the inside candle setups up the short due to short bias. 134 downside.
GBPCAD – Price in range
GBPJPY – As written, the initial thoughts were long depending on how this range resolved. We can see a poke above highs and rejection on March 13 which didn’t preclude longs. The four hour chart shows momentum to the downside breaking the support zone, a lazy pullback (this is our sign for shorts). Strong momentum in the pullback would negate any trade as it would have been back in the range. Price ranges, small test of highs on the 19th sets up trend line break entry for 328 pips. Yes, you could have shorted when price failed the highs (think 2B reversal) which gave an earlier entry.
USDCAD – Long bias all the way on this pair. The multiple tests and fails of lows was bullish. Buy stopping break of trendline after higher low put in and break of 3349 level gives 78 potential
We are still not seeing strong sustained moves in currencies. The setups look good, the follow through is not exciting although this week was not too bad. 512 pips were up for grabs and GJ traders would have had many more.
Keep in mind that these charts are posted on the weekend. Price evolves and like we saw in the CHFJPY, the evolution of price can change the outlook. Most times, the outlook changes from a counter trend play to a with trend play depending on how price digests any counter trend momentum move.
The secret is, although not a secret, is to apply everything we cover in these updates. There is never anything presented that has not been seen before on these pages. Changes in outlook follow the same explanation as has been seen virtually every time.
As an example, the CHFJPY had 2 days of consolidation at the end of a momentum move down. Lower time frame showed an uptrend pattern of higher lows. Longs were then the only consideration.
Set your rules. Trade your rules.