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GBP/USD Weakening 123 Top Confirmed!Hey traders I just noticed the pound has been struggling move higher for a while now. I think the market may have topped out because the us dollar keeps on getting stronger and stronger like crazy. I think the pound is a great short opportunity in the making! Enjoy! Trade Well, Clifford (All opinions expressed are for educational purposes and this is not a recommendation to buy or sell). (Always use risk management before entering any trade). (Past performance is not guaranteed for future results.)
Short
by TradeTheIndex
"Trade what you see, not what you think!"... and try to find multiple-100s of pips, even in over-manipulated junk such as the USDCHF. Let's see if it's possible... The title chart is the USDCHF Monthly, as it stands at the end of this quarter - 03/2021. What is the story here?... It appears that this pair is rather predictable and has been obeying all the major support/resistance levels (PRZs), going as far back as one cares to look; It is also clear that this pair continues to do so despite the relentless manipulation (money printing) of the SNB; That massive 42.5% jump of the CHF vs. the USD, between 2009-2012 (which has not been recovered since), ... ... back when the whole world seemed to come apart ("The Great Financial Crisis" + European Sovereign Crisis), the Swiss Franc still remained one of only two, true Safe Haven currencies in the entire world! (beside the Japanese Yen and despite every imaginable liquidity constraint.) Fast forward to the Covid Pandemic ... ... and the Franc did it's thing , once again, with an immediate +11.5% rise versus the USD, again, in what appeared to be the end of the (financial) world. However, several more things are noteworthy during this period; - Had the SNB paid attention, they would have already known (or at least expect) that the support zone which formed back in 2014, at 0.8750, and which prompted a strait and virtually immediate -17.5% slump in the Franc vs. the Dollar, would stop and hold back the continued and "uncomfortable" advance of the Franc, this time around, as well; (The decision makers at the SNB are no different from the rest of clueless bureaucrats, typical for any other Central Bank lackey, anywhere else in the world. The only difference may be that they tend to have longer-term mandates and tenures.) - Had they paid attention they also would have found it to be unnecessary to increase the printing of the Franc by a whopping +29% month-over-month (CHF60 Billion per), right into oblivion, or at least until they shot strait to the top of the pile and became one of the largest public investor in the Nasdaq100, scrapping 800+ years of Swiss tradition and thus tying Swiss fortunes to the likes of Apple and Netflix. - Had they paid attention to their own history and tradition, they would have also realized a couple of fundamental truths; 1) No amount of printer ink will stop the worlds love affair - well in excess of Swiss GDP - with the Swiss Franc, any time when the the end of the world is nigh; (I.e. The reliance on Swiss resilience and frugal nature.) 2) With a Swiss ruling class (top 5%) having more wealth than any other nation on earth (in relative terms), reclusive, invisible and may be even boring as they may be, they will have their Central Bankers' heads on a pike (all the heads on one pike; The Swiss are frugal) way before any of them can do permanent or even lasting damage to the Swiss Franc and well before they can all shout "Mein Gott!" (or "Mon Dieu!", dependent on the particular central banker's regional origins). Just in case should any of the above appear to be idle speculation, here is a gentle reminder; Does anyone recall Jan. 15, 2015? - When the SNB unceremoniously pulled the peg to the Euro, without any further (or previous) ado! Enough said. The Franc has been in a heavy uptrend vs. the USD even before the Covid Pandemic; Moving on... As it currently stands (at the end of March, 2021) the top three FX Carry Trades are; USDCHF USDJPY EURUSD ... in order of skew - lopsidedness. (check the C.O.T., FX positioning, etc.) The Euro most likely being a transient phenomena , much like the ad-hoc, incompetent, protectionist, paradoxically conceived unionist nightmare of a Trans-national alliance which issues it... Not a factor. (The next, not-too-distant Euro-crisis will have to attest to that.) - And, as always, that leaves the Japanese Yen and the Swiss Franc, once again, as the only remaining Safe Haven currencies of any gravitas. Clearly, liquidity is a determining factor here and that leaves the Yen as the only Safe Haven currency with any substantial (i.e. Global) shock absorption potential, as this chart should underline the notion; - As for the Swiss Franc... For one, this Monthly Chart illustrates several of the above catalogued fundamental thesis. Simply put, the USD was an obvious and helluva buy vs. the CHF, ever since following the Euro Zone's Sovereign Crisis where, in crisi-upon-crisis, end-of-the-world situations (such as a Pandemic), the obvious maximum pain-threshold of the Swiss National Bank lies in the 0.8750-0.8800 area vs. the USD. Clearly, that is the area where they are likely to go all-in, given any prolonged future appreciation of the Franc vs. the USD. The rest of the fluctuations in this pair are simply the product of the musical chairs methodology applied as (or rather: instead of) the"economic stability" mandate of the 18 or so Central Banks around the world which may be soon to be the proud parent/owners of 60% of the world's newly socialized, Soviet-style economies. - And, as has been established above, this pair presently being one of the premier Carry Trades. So, what is the play here, if any?... Having established somewhat of a fundamental picture, what are the technicals here? The Weekly Chart; ... clearly shows that the CHF tends to move (or rather: be moved by the SNB) in strait, predictable drives, respecting Quarter Point targets along the way. (OK, so the Swiss are anal. What a shock!) This whole technical picture stands the reason since all movement here, in this no-man's-land, is due to the whole civilized world continuously and relentlessly purchasing the Franc, day in, day out, from sun up to sun down, until the SNB wakes up and decides to push back by running the money printing press to the tune of CHF60-80 Billion at a pop - per month. E.g. There was that textbook ABCD pattern (World buying, SNB printing/selling; Rinse and repeat.), including it's "mandatory" 61.8% retracement. However, after which all potential ensuing suspense was interrupted by the outbreak of the Covid Pandemic, sending the Franc on an immediate 900 pip, +9% initial tear and well before any of the SNB peons could ever make it back into the office. Of course that support zone between 0.875-0.9000 having been in place for the better part of 7 years, no great surprise that it caught that strait, end-of-the-world tear the Franc was on by forcing the SNB to go all-in at that point. (At which point you have also naturally unloaded, with both hands and eyes closed, on the Swiss Franc while front-running the SNB, even if you had to mortgage your unborn children to a local loan shark just so you could short more of the Franc and to load up endlessly on the Dollar, right?! - Good job!) But what if, due to unforeseen circumstances, that initial 600+ pip free-ride was missed, all the way from 0.8750 to the present day 0.9400 level? Now what? First of all, there is a perfectly formed Cypher working here - still on the weekly - with it's C-D leg consisting of an also a textbook 3-Drive, already having cleared the first two Fibonacci levels of it's three legs ... while heading strait for a major confluence(resistance) zone, naturally coinciding with the Cypher's PRZ (Potential Reversal Zone). That confluence zone between 0.9500 -0.9650 consists, at a minimum, of; 2 year, descending Trend Line; The (descending) Monthly 20 EMA; The (descending) Weekly 50 EMA; The 3rd (and final) Fibonacci extension of that weekly 3-Drive; The (descending) Daily 200 EMA; E.g. It is reasonable to assume that this pair will have difficulty to get above that 0.9600-0.9650 level, in no small part due to the already extended +8%, 34 (Daily) period strait rise which would take it up there. Secondarily, it was established earlier that the USDCHF pair is currently in a Major Down Trend according to the Quarterly and Monthly charts, and in a strong Minor Up Trend due to the Weekly + Daily charts. Put it all together and the first leg of this Counter-trend Trade points to a M.U.T. (maximum upside target) 0.9650 . That is the Exit for the First Leg . As for the Entry for the First Leg ; As it happens, this pair has just completed a Bearish Shark (harmonic) formation on the 4 hr. chart with the pair reacting to the PRZ, much as expected. The expected retracement of this harmonic to it's First Price Target around 0.9340 , coinciding with the 4 hr. 20 EMA, is reasonably expected to provide a clean Entry for the first leg of this trade with a very favorable risk/reward ratio. (There are reasonably reliable methods by which to enter trades, such as this up-leg, with constrained risk levels; ... but that's an entirely other conversation.) Finally, put it all together; ... and this is what one is looking for here: The up-leg of a counter-trend(!!) trade; Entry: 0.9327-0.9317; Target- Exit: 0.9560-0.9580; Risk/Reward: 1:17.5; Number of pips: 250; Total expected trading period: 115 hours (4.8 days); The End Game Should chance favor the above plan/analysis/Trade Setup/outcome, that would bring a planned entry into the Primary (trend-wise; Down) Leg the forefront. (One has to cross bridges as they present themselves.) In that case, one would expect a strong and immediate reaction in the PRZ of the (by then) valid Cypher on the weekly chart - which, if valid, is normally a very strong and reliable harmonic. ... and this is what one would be looking for, in that case: The down-leg of a in-trend(!!) trade; Entry: 0.9620-0.9640; Target- Exit: 0.9200-0.9190; Risk/Reward: 1:15; Number of pips: 400-450; Total expected trading period: 7 weeks (~70 days); Note The USDCHF currently being one of the primary carry trades , this pair's trajectory has far(ther) reaching implications for U.S. and Global equity index positioning - also referred to as: Risk On/Off. Furthermore, due to the notable liquidity constrains of the CHF vs. it's peers, this pair is an instructive barometer on which to measure the ever-present state of the global game of musical chairs, staged by the various Central Banks of the world.
Education
by Nemo_Confidat
DXY continuing to push higherAnother strong day for the dollar index as the bulls push higher. We now wait patiently for the 200EMA to be tested. Is this fundamental data being priced in early? We have seen a volatile bond market recently and key economists predicting a strong dollar before the end of the year. We covered this in our last publish looking at the DXY and how we could be looking to set up in the coming weeks/months under a new Biden administration. Vaccination numbers also continue to rise across the US, prompting more economic upturn coupled with the continued stimulus package being received by a large percentage of American citizens. Biden has spoken about his plans, But where will the money come from? another $3trillion is going to be challenging.
Editors' picks
TVC:DXY
by Youza
10
USDCHF Reversal! Soon Time To Long Hi Everyone 1DTF - Currently printing a Reversal pattern *Inverse Head and Shoulders * Right shoulder is currently in formation * enter trade once we complete the right shoulder with a candle close outside the resistance alternatively you can also wait for a back test of the neckline and then Long * SL will be below the last Swing low *Target determined via a measured move from the apex of head to the neckline giving about 6 % . All labeled and shown on the chart , any ques then ask , Like and Follow for more setups Please note this will take until May too play out so set alerts or follow the Idea within TV to ensure you dont miss out .
Long
by SJTRADESFUTURES
2
CAD/JPY Trade idea CAD saw weakness yesterday due to demand concerns in crude, so we have seen a sell off in oil and in the CAD but still my opinion is that this is just an exhaustion after a major move to the upside in oil and in the CAD. As the world starts to open up, demand in oil will increase and so will the strength of the CAD. The CAD has been the strongest currency for a few weeks now and the JPY has been the weakest for some weeks, so fundamentally this is the best currency to be in. when we see a move to the upside, breaking or weekly zone (yellow zone) we will look for exhaustion and entry confirmation for a long position to our monthly zone.
Long
by Trade_Rocket_Investments
EUR/USD Trade idea we have EUR and USD news today which could provide us with a setup in the near future on EUR/USD. in the past few days the EUR has seen continued weakness and the USD continued strength, but as we can see price is playing within our weekly zone (yellow zone) so we need price to break to the downside. the news today might help us achieve that so we will be watching this one closely for a move to the downside, good separation from our weekly zone, exhaustion and then look for a move to the downside to our next weekly zone.
Short
by Trade_Rocket_Investments
2
AUD/JPY - Trade idea We are seeing minor strength in the AUD and continued weakness in the JPY so fundamentals are to the upside, therefore we look for technical entries in that direction. we are seeing minor consolidation now on the 1h timeframe, probably due to the AUD not being as strong as most currencies at the moment. So we will be interested in placing a trade when this consolidation is broken to the upside, possibly breaking previous high too, exhaustion then we would look for entry confirmation for a trade to our next major area of sell pressure.
Long
by Trade_Rocket_Investments
what is a weak or a strong exhaustion? after buyers and sellers have had battle at a significant zone and there is a clear winner with a move to the upside or to the downside we will then wait for exhaustion back to that zone, but how do we know if exhaustion is strong or weak? we have rules that if exhaustion is strong then we wait for double confirmation and if exhaustion is weak we just wait for price action with a bullish engulfing or significant pin par on the 4h timeframe. so a strong exhaustion will be just 1,2 or 3 candles back to area of sensitivity, no flow, just a straight shot to our zone. a weak exhaustion will have minor push and exhaustion cycles within the exhaustion, this is where entry confirmation will just require a bullish candle or a pin bar on the 4h timeframe
by Trade_Rocket_Investments
NZD/JPY Long Idea today and yesterday there has been strength in the NZD and the JPY has been weak for a long time now, so if the NZD strength continues it will likely break its weekly zone and then we will position ourselves for the exhaustion to previous high and look for a buy to our next are of sell pressure which is our monthly zone, our stop loss has 2 areas of sensitivity protecting it as we have the sensitivity from our previous high and the lower level of consolidation. we will only be interested in this trade if the NZD strength continues as it has been unstable this week
Long
by Trade_Rocket_Investments
Could USD/JPY see a major move?With Biden due to sign a 1.9T stimulus package could we see major strength in the USD? and if we do which currency will see the biggest move? well the JPY has been consistently one of the weakest if not the weakest currency for a few weeks now so if we are going to see major strength in the USD id be placing my bests on USD/JPY being the biggest mover and having the most buy pressure enter the market, this could be a great opportunity to have an aggressive entry to the upside and trail our stop loss to make the most of this move, taking small profits at area of sensitivity.
Long
by Trade_Rocket_Investments
2
What Are Zones zones are major and minor areas of sensitivity where buyers and sellers have battle, they are one of the most important aspects of trading as zones help you set targets, help you identify direction and also let you know when and when not to enter a trade. here at forex gentleman we identify our zones based on their significance, so we have our monthly, weekly, daily, 4h and 1h zones, these are all different colours on our chart and have difference in significance. we know that when price makes its way to a monthly zone that it has more buy and sell pressure than the weekly and the weekly has more sell and buy pressure than the daily etc. so we only look for trades when price has "free range" from these zones to place entries because then we don't have a major battle to our take profit
by Trade_Rocket_Investments
1
CAD/JPY Trade Explained - 1/8 Risk Reward The CAD has been continuously strong the past few weeks and the JPY has been continuously weak, so we was looking for an opportunity to capitalise on this. because of the fundamental difference we was looking for a long trade with a tight stop loss as we haven't been seeing much exhaustion on this currency and yesterday morning at the London open we saw our opportunity, we saw a full and complete exhaustion to previous area of resistance which is now support, double confirmation on the 15 m timeframe and a bullish engulfing candle on the 1h timeframe. after only a few hours of being in the trade we was able to move our stop loss to entry to give us now a risk free trade that we will manage all the wat to our monthly zone, giving us a risk to reward of 1-8
Long
by Trade_Rocket_Investments
Will the USD dtrength continue?for many weeks now we have stayed away from the USD due to it being unstable in its fundamental strength. but this week we are seeing that the USD is the strongest currency, if this strength is consistent then the following trade might come into play. The CHF has been the weakest currency for a while now so we will be looking to capitalise on this and the USD strength by looking for lower timeframe buys to the upside with our final targets at our major levels or zones of sensitivity
Long
by Trade_Rocket_Investments
GBP/JPY long Trade explained With the UK leading the way in the vaccine rollout and optimism in the re opening of the country we have seen continuous strength in the GBP for a number of weeks now. on the other hand we have seen the opposite with the JPY, it has seen continuous weakness due to its debt situation. so we was looking for an opportunity to capitalise on this and we did last night with another opportunity this morning at the London open. we saw price break above its weekly area of resistance which is now support, creating higher highs and then on the 1h timeframe we saw our entry with exhaustion to this zone and multiple pin bars
Long
by Trade_Rocket_Investments
1