Forex Trade Signals and Setups Jan 24th

After a moto accident over the weekend (albeit a small one) along with the internet going out on the peninsula during the dark moon, I am back to writing posts as usual.  Life tends to afford you a unique perspective on things when your about to hit a truck, but I guess I have several of my nine lives left (hopefully) so back to work I go.

Also, I will be spending a little more time breaking down each trade to give you more price action insights into the market so let me know if you like the new format.

AUDUSD – Timid But Holding

After failing 3x to break the key 1.0384 resistance level, the Aussie broke through to higher ground, albeit stutter step style.  The first punch through actually resulted in a false break, but then played off the aforementioned level in a typical breakout-retest style.  We gave price action triggers to watch out for which played out perfectly so hopefully you made some money on that.

What we are noticing is how the pair broke through the big figure at 1.0500.  Look to the large candle at the top of the move.  This is the largest 4hr candle from an open to close basis (bull candle that is) for the entire year and came on the heels of clearing out 1.0500.

price action trading 2ndskiesforex jan 24th

But how did the market respond since then?   It sold off over 140pips  before finding any buyers.  This could represent a buying climax which could suggest a lower high followed by another pullback.

Although buyers found support at the price action breakout-retest level of 1.0432, we think bulls should be weary as the market is unlikely to attract a significant amount of new bulls between here and yesterday’s highs at 1.0572.  Bears may want to watch the 1hr or 4hr for price action clues as to a short term play to the downside.  Bulls in the meantime can either wait for a timid pullback to the 1.0432 level, or possibly the 20ema before getting back in as the upside is looking a little strained at the moment.

Also keep in mind, over the last 12 day run, every red candle was followed by a bull candle, so a 2nd bear candle would suggest a little deeper pullback.

EURUSD – Below the Kumo, Above the Kijun

After forming a nice TKx Sell Signal  back at 1.3500 that went over 800+pips south, the Euro has remained below the 20ema and the Kijun the entire time communicating the consistency of the downtrend since it broke below the Kumo.  What is interesting to note is how price has just broken the Kijun for the first time since November of last year.  It should be noted it has done this on the heels of an impressive 5 out of 6 day climb.  Although the candles are getting smaller suggesting the rally may be running out of steam, the Chikou Span is close to forming a ‘favorable cross‘ of the price action.  It would still need to clear the Tenkan and Kijun to complete this, but its making progress.

ichimoku trading 2ndskiesforex jan 24th

But the bottom line is, from an ichimoku perspective, the pair still has a giant Kumo to clear while the Tenkan and Kijun are totally flat, suggesting moment is sideways at the moment.  This could either be because of a) they (tenkan and kijun) are trying to catch up to the price action bounce or b) they are reading a waning momentum in the pair.

Either way, the EURUSD has its work cut out before we can say we have reversed the last downtrend.  All these clues point to a likely rally which is fading, thus offering another attempt to get short before another leg down to the sub 1.2700 region and yearly lows.  Watch for this rally to possibly fade towards the end of this week.  Key levels to watch would be the lower edge of the Kumo near the 1.3200 level while ambitious bulls can take plays off the 1.2900 level for now.

For those of you looking to trade Advanced price action, or our Ichimoku Systems, make sure to check out our Advanced Price Action or Advanced Ichimoku Courses where we teach rule-based systems for trading Price Action and Ichimoku Cloud Trading.

Also make sure to read our latest article called Reading Price ActionKey Price Action Elements of a Breakout Part 1.

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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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  • Doug Ramerth

    I like the new format. Regarding AUD/USD, Australia released a CPI Q4 figure at 0:30 GMT, producing a 65 pip move in two minutes that touched 1.0436 on the downside, 1.0500 on the upside and ultimately formed a high of 1.0515 within 30 minutes. CPI came in 0.20% below consensus for the year and Q4, which is a bearish signal according to FxStreet. Right now price is 1.0530 and I don’t understand why it’s so bullish.

    • Hello Doug,

      Glad you like the new format.

      In regards to the news, this is why I do not recommend following the news events like these. Its ‘supposed’ to be a bearish signal according to fxsteet, yet the market is moving up. This is why its crucial to learn how to read and trade price action. It does not matter what the news is or how it comes out, what matters is how does the order flow respond and what does it communicate to us through the price action. Once you learn how to read this, you’ll forget the news completely.

      Hope this helps

      Kind Regards,

  • Tony

    Hi Chris,
    Yes, like the new format very much. Very easy to grasp the important PA insights you’ve highlighted.

    Played a bearish P Bar on the Aussie today for a quick 54 pips thanks to your guidance. Will also be watching to see if we get that 2nd bear candle on the daily.

    Many thanks as always.


  • phil

    Hi Chris,

    I’m sorry to hear about your moto accident, hope you’re doing o.k. on recovering from that one…

    Like the new format, by th way.

    All the best and thanks,


  • Chrisitan

    Hi Chris, hope your recovering from your accident and get an insight what life will tell you. 😉
    Well, your new format tells me a lot and it is easy to grasp material and informative as always in depth. so like it very much.
    Just one question: what is meant by the ‘favourable cross’of the Chikou Span.
    All the best

    • Cool – am glad you are liking the new format.

      In terms of the ‘favorable cross’ I was just thinking to do a video on it so will put one out in a week or so – stay tuned.

      Kind Regards