Weekly Market Research June 1st
Market Analysis June 1st 2009
Swinging here and there, this pair is skipping the B-Line and heading upward in small waves. It suggests decent confidence but nothing overwhelming. Thus, instead of buying breaks or closes, we suggest waiting for the general expression to come in line which is wait for a pull back to the Tenkan (white line) while placing stops below the 20EMA. You could also buy on 20EMA touches with tight stops below while targeting the next fib in the sequence. The pair has responded to both the 38.2 and 50% fibs so we expect upside targets to be the 1.4500 handle and the 61.8fib which stands at 1.4615. Cloud analysis says bullish strength is still clearly in play while it climbs but it is starting to thin. CCI and Momentum models suggest medium strength is still left in the trend so buying pullbacks as the suggested strategy is the way to play.
A bloody mess if you ask the British character in me (fyi – I have no British but like the accent and phrases). This chart is all over the place and we refuse for now to trade it in any fashion. It ended last week with an enormously bullish candle testing the Kijun, then selling off violently only to launch up again and retest the Kijun. In/out/in the cloud is a game not worth playing. We are staying away for now. Our strategy is avoidance.
Now this a strong sailing pair which has climbed 15 out of the 21 days in May and started June with a 360pip climb from market open on Sunday. Buying breaks of key levels has worked pretty well as of late so we are either entering the latter phases of the trend or in a place of good strength. Waiting for a dip to the Tenkan seems too cautious so an alternate strategy is to wait for the next inside bar on the dailies then play a break to the upside. The only three upside targets are the 1.6660 (oct. 30th 09’ Swing High), the 1.6836 (50% fib of 08’peak) and 1.7000 being the big figure.
Tiring but still in the fight like Rocky Balboa, the ascending cloud shape along with the Tenkan below price and the fact the pair only sold off only five days in May suggests the only real money to be made is on buying. The pattern suggests wait for a day of selling first as it has not been accompanied by a second round of selling since early April. Ideally, make sure the selling day has been solid as almost every selling day has closed towards the lows.
Only one legitimate fib retracement in the last three swings, the pattern is erratic at best neither stopping at the 20EMA or the Tenkan line. Price Action patterns suggest waiting for a inside day then break below or after a day of buying since no two days of buying has happened since mid April. Selling is still clearly preferred.
A relative mess but clearing up now that things are close to the 09’ highs at 137.48 currently about 100pips below. One can play the rejection of the highs but with momentum this strong at pointing up, along with the solid two day CCI high bar readings, we feel this would be troublesome for now.
A daily close above the highs could be a solid play but the candles are all over the place so the next best option is to wait for a bearish engulfing pattern to play out, then take the 50% retracement of the engulfing candle and sell there with stops above the previous swing high.
Out of the last 9 days of buying candles, 7 of them have had wicks to the downside of 100pips length or more. This patterning suggests dips have offered good buying opportunities around a cents length dip from the open. If the market bounces off the lows and clears the open price the follow up buying should be strong on the following day. Watch how the market responds to the 160.00 level but we do not expect price to break the R3pivot tomorrow.
Analysis provided by 2ndSkies. No copy or reproduction without permission.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
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