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Weekly Market Research May 25th
Market Analysis May 25th 2009
After 5 days of straight climbing, the pair has doji’d around the big figure at 1.4000. Even though CCI is still in trending mode, the double peak in CCI should be of some alarm suggesting that although the bias is still up, we prefer buying pullbacks instead of breakouts. In the last stanza, the pair dipped right to the 20EMA on the daily chart then launched on a 600pip run. Thus this would be a logical place to take longs for another swing up. You can get aggressive at the Tenkan (white line) but we prefer the former to the latter. It has held up price since April 28th and at the rate its increasing, it could be posting up around the previous ceiling at 1.3730ish which would be a great technical place to buy. Until we have a close below the 20EMA, longs are preferred to shorts. Keep an eye out for a possible evening star pattern which may suggest short term selling.
Since breaking below the Kumo (cloud) for the first time since Feb. 13th the pair has sold off mildly with one retest of it, then selling, then two days of buying with today’s price action testing the Tenkan but getting rejected. The Senkou Span B (bottom line of the cloud) is rising suggesting resistance is rising so this kumo break is not ideal, but the Tenkan and Kijun are still falling which could hamper upside attacks. Oscillators still favor downside and have yet to make any new swing highs but are overextended. Thus, selling on rallies is far better than taking the breaks. 93.55 would be your first real downside target and the earliest place we’d sell would be 95.51.
The pair has been nothing but bullish for the last month climbing all but 4 days in May and coming just shy of the 1.6000 figure. Since it has been above the Tenkan line and been supported by it on several occasions, we feel buying is the only way to go for now since its climbed 12 out of the last 16 days or 75% of the time. Thus, buying three out of every 4 days is suggested. The strategy would be to buy dips to the Tenkan line which is currently residing at 1.5500 while targeting 1.5890 and stops below the 20EMA at 1.5379
Bullish and gaining 4 of the last 5 days, this pair has had to work real hard for its 150pips gain over last week. We like the upside but feel the trend is tired and could possibly be looking to sell off soon. The momentum pattern is usually one that pairs sell off from but we have yet to see a daily close below the Kijun (red line). If the pair starts its dive and closes below the Kijun, we expect a move to .7250 and then towards .7000 pretty quick.
Diving faster than a peregrine falcon, this pair has sold off roughly 700 pips in May and we still have a week to go. Pullbacks have been contained by the 20EMA which will probably be the technical trigger signaling the trend is over for now. Until that happens, selling is preferred. 1.1500 is a good medium term rally point to sell and more aggressive players can wait till 1.1369 to target the 1.1200 levels. One thing to caution is Momentum is threatening to make a new swing high just above the last two peaks which could signal the end of this swing leg down.
This pair has acted confused lately bouncing off the cloud top, then entering it halfway, breaking the Kijun, then exiting back above the cloud. The pattern is too erratic to trade it on a swing basis. Selling at 135 is workable but CCI is not too great and momentum is lackluster. The cloud is also thinning below and gets choppy suggesting we will enter a likely choppy range in June between 126.50 and 135.00.
A better chart than the EURJPY this pair is still in buying mode although momentum is tiring. We have had two daily closes above 150 but the oscillators are not giving a clear green light for buying at such levels. The pair is above the cloud and has not had any forays into it so buying is the preferred method but we suggest taking longs on approaches to the cloud top since the Tenkan, 20EMA and Kijun have been violated consistently with the only bastion of defense holding being the Kumo. If it holds, targets could be set at 147.50 and 150
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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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