Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Forex Trading Management: The Importance of Being Prepared

Currencies / Forex Trading Feb 19, 2019 - 06:28 PM GMT

By: Nadia_Simmons

Currencies

There is this pearl of wisdom in the trading world. Plan the trade and trade the plan. We have just seen the importance thereof in the EUR/USD pair. It had positive direct implications for us and you, the subscriber. Does the above influence our outlook on the other currency pairs? Is there any corresponding action to take?


EUR/USD – The Decline on Cue

On the weekly chart, we see the pair is testing the lower border of the blue consolidation. The weekly indicators are still positioned in a bearish way (CCI, the most short-term sensitive one, has not flashed any buy signal yet).

Moving to the daily chart, on Friday we wrote:

(…) currency bulls didn’t manage to change the technical picture significantly. There was no break above the first chart resistance nearby, the 23.6% Fibonacci retracement.

The pair pulled back and closed the day below the above mentioned resistance. (...) It’s becoming increasingly probable that we’ll see a realization of the bearish scenario and a test of the red declining support line in the very near future.

Below this declining red support line, there is also the lower border of the blue declining trend channel, which may be an additional factor that could encourage the bulls to act in the following days. The two most recent white candles support the likelihood of the exchange rate willing to put up a fight before any further moves down.

Therefore, we decided to close our already profitable short positions and take profits off the table if EUR/USD declines to our downside target.

The situation developed in line with our assumptions and EUR/USD rebounded after a drop to our exit target. Thanks to this downswing, our short positions were automatically closed by the waiting exit order (our subscribers were prepared in advance), increasing our trading capital for a third time in a row.

What’s next for the exchange rate?

Friday’s move created a candlestick with a long lower shadow, which shows heavy participation of currency bulls in the move. Yesterday, they built up on the gains and EUR/USD came back above the previously broken green zone. The daily indicators are not positioned negatively for such an upside move. Taking these into account, the pair could very well test the 38.2% Fibonacci retracement in the near future.

As a reminder, this important resistance was strong enough to stop the bulls in the previous week. If the pair has enough power to indeed approach it (at the moment of writing these words, it’s trading at around 1.1285 – which is back inside the green support zone), we’ll pay close attention to the bulls’ strength as it would give us more clues about likely future moves.

If they break above the 38.2% Fibonacci retracement, we’ll likely see next a test of the 50% Fibonacci retracement followed by the previously broken lower border of the brown rising trend channel. However, if they fail, another retest of the major supports and latest lows will be in cards once again and thus we’ll consider reopening short positions.

USD/CAD – Still Inside the Consolidation

On Wednesday, currency bears tried to go south, but the previously broken red support line stopped them. The bulls invalidated the breakdown and triggered a rebound that took the pair back into the consolidation.

Thursday’s upswing and took USD/CAD well into the upper border of the yellow consolidation. Despite the increase, this improvement was very temporary and the exchange rate turned south the day after, invalidating the earlier tiny breakout.

This triggered further deterioration and the pair came back to the lower line of the formation, approaching the previous low and the red rising support line. Nevertheless, there was no daily close below the consolidation, which encouraged the bulls to act earlier today.

As a result, the pair erased yesterday’s drop. It suggests that another attempt to reach the upper border of the yellow consolidation may be just around the corner. We will keep you, our subscribers, informed should anything change, or should we see a confirmation/invalidation of the above.

USD/CHF – Another Consolidation

Although currency bears pushed USD/CHF below the lower border of the blue rising wedge at the start of last week, this tiny breakdown was quickly invalidated. A sharp move to the upside followed and the pair looked like it could test the upper border of the rising wedge formation in the very near future.

USD/CHF indeed moved higher till Wednesday, pulled back on Thursday and had a daily reversal on Friday to end the week on a bearish note. This resulted in the exchange rate breaking below the lower border of the rising blue wedge.

But for now, the pair remains still inside the blue consolidation and before another bigger move down, we would first need to see a decisive daily close below the consolidation. If the bears show strength in the following days, we’ll consider opening short positions. We will keep you, our subscribers, informed should anything change, or should we see a confirmation/invalidation of the above.

If you enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Oil Trading Alerts as well as Gold & Silver Trading Alerts. Sign up now.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski
Founder, Editor-in-chief

Sunshine Profits: Gold & Silver, Forex, Bitcoin, Crude Oil & Stocks
Stay updated: sign up for our free mailing list today

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’ reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in