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Forex Ichimoku – Trade Setups Nov. 1st
*We have been traveling in Barcelona, Munich and Hong Kong so have been busy which is why we have not posted in so long. We are actually writing to you from HK now and will be back to normal 2-3x a week posts starting next Tuesday.
EURUSD – Stuck in between
The euro has been stuck in a small range after its long uptrend to 1.4157 between 1.37 and 1.4070 for the last two weeks which is interesting on a few fronts. First off, it has yet to make a new high and actually posted 2 lower highs since the yearly high. Second off, it has closed below the 20ema on two occasions which it had not done since early Sept. this year. But the bottom line is the Kijun has held so the uptrend is still in-tact for the moment and it seems to be mildly supported. Buying or selling at current levels doesn’t make much sense so we suggest selling in the high 1.40’s up to 1.4150 and buying in the low 1.37’s or on any kijun touch with stops just below. Should the pair close below the red line and the 1.37 barrier, it could go for a run to the Kumo which sits around 1.3500.
USDJPY – Still Dominated
Regardless of the potential BOJ intervetion for a 2nd time, the pair has continued lower but with very little vigor. Its actually moved at a tortuga pace but been steady in its march. Bottom line is its still being held down by the 20ema so rallies to it should be opportunities to sell. However we have to consider barriers may be holding at 80 either by large institutions or the BOJ so some buy plays can be had there. One fact should be considered is the daily ranges for this pair are extremely low so don’t expect to day trade and walk away a rich man.
GBPUSD – Threatening Again
Climbing 5 out of the last 6 days, the GU is making an attempt to take out the yearly highs just above 1.6100. This should be interesting because there will likely be some orders willing to sell around this level and see if it holds again regardless of it threatening to make new yearly highs. A break above this level likely opens the way up for new longs to come in but whats most interesting to us is the very thin Kumo below till the end of the year. This translates into a pair that is thinly held up so any reversals will likely lead to solid losses because its unlikely the Kumo will hold up. There is also a flat bottom starting in mid month till early Dec. so should the pair start another run down, it should likely move to 1.5700 as a solid downside target.
USDCHF – Bottom in Place?
Although there is an intimidating Kumo up ahead, the pair has some hints that a bottom sub 95 may be in place. The pair has held comfortably above the 20ema for some time which it has not been able to do since the down-trend started in June this year. Thus traders can look for small buys around the 20ema in hopes that it holds and breaks the upcoming Kumo. The other side of this is sellers should wait for another TKx to the downside as it could lead to another run of the yearly lows and possibly start a new run to the downside so plenty of plays on either side for now.
EURGBP – Is the Run Over?
After making an impressive 800pip run over the last 2.5mos, the EURGBP has given some signs the run is over. The pair has failed many of its strength tests in the last week or so which would support this theory. First, it has closed below the 20ema and Kijun which it has not done since early Sept. this year – both of which hold up trends so this does not help the bulls. Second, it has sold off 4 of the last 5 days which it has also not done in over 60+ days. Third, it had its largest selling day on the 26th of Oct. for the last 6mos so this would have likely trimmed some longs taking them out of the equation. With all that being said, if the run is over, it seems a likely move to the Kumo top which is 150pips below is in order. It also has the Kumo formation to break through which would likely trigger an unwind all the way through to the 8200 level so should the 20ema hold upside moves, the pair could produce a nice downside play.
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