Forex Trade Signals and Setups Sept. 12th

Verified Profitable Trader

Considering China would like to be the international Buffet and be the last lender of resort for Europe, propping up the region which will ultimately fail since what they are doing is not changing anything with the credit lines in Europe.  Thus, we feel we should comment on some EUR pairs but ultimately recommend staying away from them in the short term until this undercurrent moves past so we can get back to the real trading environments which is shorting EUR vs. pretty much anything as Greece 1yr bonds are now priced at about 100% and the credit outflows are continually outpacing the inflows. Translation…Greece will run out of cash by about Oct. 17th.

With that being said and without much further ado….

EURUSD – Short Term Supported.   After that???
As we have suspected now for a while, China has been propping up the Eurozone (and the EURO) as they have come to the rescue (at an ironic time) saying they will buy Italian Bonds (forget Greek bonds – those things are trash) to help support the region.  News of this shot through the markets and took a DJIA down 145pts to close the day up 69pts while propping up the EUR on the news causing the EURUSD to jump over 125pips in a matter of an hour, along with the EURJPY gaining 90 along with the SPX gaining 30pts in an hour after being down over 15 on the day (see charts below).  No doubt, the lendors of last resort out east have helped to artificially prop up the markets again.


SPX 5min

With that being said, we would like to comment on the 4hr pinbars showing up 2x within the same days trading session suggesting the pair is short term well supported.

Thus, within the next trading session we do not feel comfortable shorting EURUSD.  However, we will watch the 4hr 20ema to see how price rejects off of it along with the crucial 1.3830 price action breakout-retest level which was a great rejection point for the aggressive selling last friday and what we feel will likely be a rally point for bears to sell into.

USDSGD – Breaks Weekly 20ema
For the first time in 2011 and looking all the way back to June 2010, the USDSGD has broken the weekly 20ema and closed above it.  To follow suit, the pair has opened right on top of it and done nothing but gain to start the week.  This is a unique technical event and we suspect will likely result in further gains with dips being well supported into the 20ema.

Where do we suspect the gains will find their way to?  Next up seems just shy of 1.25 at the 38.2% of the Nov. 2010 highs to July 2011 lows, parked at 1.2474 which was the weekly resistance for all of May.  This first target offers 130 to the upside and only about 80 to the downside with the possibility of further gains up to the 1.2623 (50% fib marked on chart) and perhaps all the way back to the 1.2772 which is the 61.8% fib level.

Last weeks weekly gain was the highest from an open to close basis since Nov. 2010 and we suspect this technical break will likely result in further gains short term.

USDINX – Strong Run finds Double PinBars.  Setup for Another TKx Signal?
So the USD Index (USDINX) has had an impressive run aided by the Greek Tragedy punishing Europe and as such, has fared the better.  Running from a low of 73.50 back at the end of last August, to 77.50 just today, the index has performed quite well holding above the Tenkan line the entire time suggesting how strong the momentum behind the move was.

However, the USDINX ran into double pinbars (much like the EURUSD) which is putting a short term damper on its upside prospects suggesting the 77.50 level might cap in the near term.  However, the Cloud or Kumo structure is quite strong with a good upward angle and well endowed (thick) to likely hold any downside moves.  We suspect a pullback of sorts but no kumo break setting up another upside TKx which may signal the next short term run for the USD index.

For those of you looking to trade advanced pinbar setups, or our Ichimoku TKx systems, make sure to check out our Advanced Price Action or Advanced Ichimoku Courses where we teach rule-based systems for trading pinbars and Ichimoku.

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