Forex Trade Signals and Setups Jan 16th

With the Martin Luther King holiday today, markets have been a snore with even the London session being somewhat sedated.  Expect price action to pick up this upcoming London session, but should you take a trade in the current Asian session, be patient with your trade as volumes are low, so it make take a little extra clicks on the clock for your trade to progress (one way or the other.

AUDUSD – Still Holding the Line

As we’ve been talking about for sometime now, the Aussie has been holding the upward wedge and series of higher lows.  Yet, at the same time, it has failed to take out the resistance level above.  The longer this goes, the more the bears could build confidence the bulls don’t have the muster now to take out the key 1.0380 level.

We are in a termination wedge and almost 90+% through which is very deep into the wedge and not common.  We expect a breakout this week is highly likely as they almost never go to full termination.

forex price action - price action patterns audusd jan 16th

The 20ema is acting as dynamic support below and has held price action 4x in the latest run.  This can give short term traders an intraday entry to long the pair at the ema with tight stops below in the low 1.02’s while targeting the 1.0360/75 region giving you approximately a 3:1 reward to risk ratio.  Bears on the other hand have a play shorting the pair in these aforementioned levels, with tight stops above the round number, targeting just shy of the 20ema dynamic support level below so plays on both sides.

GBPUSD –  Breakdown of the Channel?

Last week we talked about the key support level at 1.5271 offering a good play for bulls to take a long. This level held 3x since then and offered some good intraday price action setups so hopefully you took advantage of them.

forex price action - price action trading gbpusd jan 16th

Now price is hovering towards the low of the key channel the cable has been in for the last 2.5 months, and this is the longest price has ever held off the channel lows.  The bulls have not come in with any measure of force whatsoever suggesting a breakdown is the more likely move from here.  However, the bulls still have time to get in for low cost with stops below the lows from two days ago, targeting the 20ema and possibly the big figure at 1.0500.  Thus, if you want to play a long, you have your line in the sand, while those that want to play the pair short, watch for a price action breakout-retest setup on the 4hr time frame with tight stops above the 1.5300 handle.

For those of you looking to trade price action, make sure to visit our Advanced Price Action Course where we teach rule-based systems for trading Price Action.

Also make sure to check out our latest article on Reading Price Action – Intraday Price Action Trading.

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Buddhist, Trader and Philanthropist

I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform. As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

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  • Tony

    Hi Chris,
    Looks like it could be an interesting couple of days coming up for price action on the above pairs you mentioned. Many thanks for spelling out how to play either move.
    Just quickly; GBP USD “However, the bulls still have time to get in for low cost with stops below the lows from two days ago, targeting the 20ema and possibly the big figure at 1.0500.” I assume your big figure is the 1.5500 with the 20 EMA currently at 1.5460??

    Kind Regards
    Tony

    • Yes Tony,

      When someone speaks of a big fig, its every 500pips, so in this case, would be 1.5500 but the 20ema could also be a target if it rotates higher

      hope this helps
      kind regards
      chris