Forex Analyst Picks & Strategies
July 28, 2015
My Picks: long Yen
June’s USDJPY trade produced a monthly key reversal. The rate has snapped back but a break above the long term resistance confluence (uptrend resistance and the line from the 1995 and 2005 highs) is still needed in order to minimize downside risk. For more, visit SB Trade Desk.
July 27, 2015
My Picks: Bullish USDJPY
Bias: Bullish Toward Channel Top Near 127
Point to Establish Long Exposure: Into Ichimoku Cloud in the 122.18-123.06 region
Invalidation Level: Channel Low & 100-dma 121.55
The JPY has strengthened vs. the USD ~0.5% on the weekly open after China's Shanghai Index dropped 8.6% to open the week. However, the risk-off sentiment seems to be contained, as is common in clear trends, while technical indicators, specifically Ichimoku & the Andrew's Pitchfork look to provide support.
Looking for a move to the top of the channel on the FOMC announcement later this week. Resistance will be a focal point for many institutions at 124.40 as it has held and allowed USDJPY to print a lower high three times since mid-June.
A break and close above resistance will continue to affirm that upside target of ~127.
Protective stops are placed below the lower median line of the pitchfork and a great deal of force would likely be needed to get there in the form of larger Risk-off sentiment from continued deterioration in global equity and commodity markets.
Shorter-term: if the Tenkan-Sen or Conversion line (9-period midpoint) continues to point higher, the bias will remain bullish. If the Tenkan-Sen (black line on chart), turns south, the immediate view will be neutral for larger bias higher.
Other Key USDJPY Levels of Focus:
* 3rd resistance: 124.38 76.4% Fib Resistance of Corrective Range
* 2nd resistance: 124.19 Lower high & July 23 high
* 1st resistance: 123.57 July 22 low
* Spot: 123.20
* 1st support: 122.92 55-DMA
* 2nd support: 121.55 Protective Stop & 100-DMA
* 3rd support: 120.51 July 8th low & May 5 high
July 23, 2015
My Picks: Short NZDUSD
Market Condition: Retracement
Target 1: Figure Support at .6600
Target 2: 2015 Low .6498
NZDUSD 1Day Chart
(Created using Trading View Charts: Click on the chart below to zoom in; after zooming in, press the play button towards the right to set the market in motion)
The NZDUSD continues to be one of 2015’s strongest trends, declining as much as 1418 pips year to date. Today marks a retracement for the pair as the NZDUSD has bounced after last night’s RBNZ interest rate decision. This event has pushed price into a declining daily trendline under .6700. If resistance holds, this could create new retracement trading opportunities back in the direction of the primary daily trend.
In the event that price breaks through resistance, traders will watch for prices to test next resistance at.6770. This price represents a previous swing high for the NZDUSD. If price moves back above this value it would represent a new higher high, and at least temporarily invalidate any previous bearish retracement signals.
To Receive Walkers’ analysis directly via email, pleaseSIGN UP HERE
July 22, 2015
My Picks: Close Long USDCAD
Now that prices are driving into 1.3000 for the USDCAD, there are some yellow warning lights beginning to flash on an immediate move to the upside. With mixed signals showing below, bulls will want to manage risk and see how the price behaviour is in the 1.3050-1.3150 zone.
For a chart on the USDCAD, click here.
Let’s run through some of the main indicators we follow:
Elliott Wave Position - The Elliott Wave analysis suggests we are in wave v of (v) of [iii]. This is an ending wave at two different degrees of trend. Ending waves oftentimes sport divergence on common indicators like RSI. (Bearish)
Wave harmony – Multiple wave relationships show up in 1.3050-1.3150 price zone. These wave relationships are areas of harmony on the chart where prices are likely to receive a reaction. (Bearish)
Wave (v) = .618 * (i)-(iii) = 1.3055
Wave v = .382 * i-iii = 1.3059
Wave v = .618 * i-iii = 1.3147
Circle [iii] = 1.618* circle [i] = 1.3117
SSI – at -2.7, the vast majority of retail traders are trying to pick a top. Additionally, short open interest has increased 9.5% in the past week. SSI suggests a continued move higher. (Bullish)
OBV – several time frames (15 min, 30min, 3hr, 4hr, 6hr) are showing a divergence between this burst higher in price over the past 24 hours versus the on-balance volume. This suggests a lack of conviction through volume in the move higher. (Bearish)
To review the last USDCAD pick from July 8, see “USDCAD – Buy a Zip or the Dip”.
To join Jeremy’s distribution list, click here.
July 15, 2015
My Picks: Sell gold on close below 1150
Gold is testing a key trendline as it's remained in 'neutral' territory for its longest stretch since 2010. A breakdown targets a much larger decline and a resumption in the multi-year downtrend. I like getting short on a daily close below $1150 with initial targets at March, 2010 lows of $1040. Max risk on the position would be a daily close back above key trendline support at $1150.
Comment and view the chart live update here at this link: http://www.dailyfx.com/charts/tradingview/view?id=kuPrcaGM
July 15, 2015
My Picks: Still Short EUR/USD, Pending USDOLLAR
The FXCM USDOLLAR Index (equally weighted basket of USD vs EUR, GBP, JPY & AUD) continues to lack much direction in a medium-term context, but there is hope that this is changing. Over the past week or so the index has triggered an inverse head & shoulders pattern (best seen on the 4-hour chart) and broken above the trendline connecting the April/June highs just under 12,000. Momentum has fallen off a bit over the past few sessions, but focus remains on the June high and the 78.6% retracement of the April/May range near 12,050 as traction above there is needed to signal the start of a more important push to the upside in the index. Weakness back under 11,920 would undermine recent positive technical developments.
Still short EUR/USD with a trailing stop over 1.1170 (closing basis).
June 30, 2015
My Picks: Short GBPJPY at 192.83
The British Pound turned lower against the Japanese Yen as expected, breaking support guiding the uptrend since mid-April. I have now entered short, initially targeting 190.91. A stop-loss will be activated on a daily close above 194.33. I will take profit on half of the position and move the stop to the breakeven level (192.83) once the first objective is met.
Near-term support is at 190.91, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 187.85. Alternatively, a turn back above the 14.6% Fib at 192.80 opens the door for a challenge of 194.33 (range floor support-turned-resistance, trend line).
To receive Ilya's analysis directly via email, please SIGN UP HERE
June 23, 2015
My Picks: Pending: EURUSD, EURJPY, GBPUSD, USDJPY, NZDJPY
Looking across the Dollar, Euro and Yen majors; there are plenty of pairs that look well positioned from a technical perspective. Yet, once again the fundamentals may act as a barrier for follow through. With uncertainty or the focus pushed forward, expectations could pump the break on what looks like otherwise clean technical setups.
For the Euro setups, there are good looking setups; but resolution on Greece - for better or worse - is necessary. EURUSD in particular is in a diminishing wedge below 1.1500, but needs a decisive outcome from the debt standoff to have a fighting chance for follow through. A clear fundamental outcome would be good for either direction, but I prefer a scenario where the deal falls through and it clear 1.1250. The same is true of EURJPY, which could easily clear 138 congestion floor if a Greek crisis proved contagious.
For a Euro long view scenario, one of the better positioned pairs is EURCAD which puts a listless Canadian Dollar against a theoretically motivated counterpart. Clearing a 16-month channel resistance around 1.40 would be the key technical move, but fundamentals are crucial here.
For the Yen crosses, a clear risk view is necessary and we are as lacking of conviction there as anywhere else. A USDJPY move towards 125 on a clear risk appetite drive could be an opportunity but it has a narrow window and dubious support. I'd prefer seeing risk aversion pull down equities and the Yen crosses. USDJPY below 122.50, 121.50 and then 120 are the key stages. I am also partial to NZDJPY given it broke a major neckline on a six-year rise and head-and-shoulder pattern. A staging from a retest at 85.50 or projection below 84 may prove viable levels to work with.
From the Dollar crosses, focus on rate forecasts is still strong but the wait-and-see mentality is not as magnetized to the future as it was last week leading into the FOMC decision. That may ease trend development on pairs that aren't 'distracted' by upcoming event risk. I'm watching GBPUSD as it turns from its 50% Fib of the July 2014 to April 2015 bear phase around 1.5900. Without something to hold it back, perhaps this pair finds follow through more readily.
Today's Forex Trading Tips & Ideas
|Currency||Central Bank Rate|
|Symbol||Roll S||Roll B|