Weekend Analysis

EUR/USD

Weekly Chart

It looks like that shooting star candle two weeks ago was a good sign that this pair was headed down. Resistance is at its pink 50 EMA and blue 100 SMA. Support is at the top of its old descending channel, then its purple 200 SMA. With very few economic data releases this week, I don't think the pair will hit any of these areas.

Here's another look at the weekly chart. I bet a gazililion traders have these same Fibonacci retracement levels drawn on their charts. Why? Because there's no confusion on where the swing high and swing low points are. Even a monkey can pick them out. As you can already see, the pair has closed below its 24% Fib line so any upside movement might be capped by this level. Notice how the blue 100 SMA and the 38% Fib line are around the same area, that's a good resistance area there. While I don't see it happening this week, if the pair can close above that, look for the Euro bulls to come out in full force.

I've drawn Fibonacci retracement levels here from the most recent swing high to the most recent swing low. Notice how the pair retraced up all the way to its 62% Fib line only to head back down and find support on its 38% Fib line. Due to the lack of events this week, I think the pair might just trade sideways in between the 50% and 38% Fib lines. I've colored the area in purple. It could also fall further and trade sideways between its 24% Fib line and 50% Fib line. Off course, I could be totally wrong, and it could fall all the way to its swing low, but I highly doubt it.

Daily Chart

Look how beautiful the blue 100 SMA is acting as support on this chart. Magnifico! The other thing I want to point out is how all three moving averages are slowly converging together. When all there moving averages get really close to each other, it's usually a good sign of a big move coming. The problem is knowing which direction it will move.It might be several more days or even next week until all three moving averages are close enough to start intertwining with each other like a rope. That's why we should start paying huge attention. But it's always prudent to be prepared, let's a take a look at some possible trade ideas so we we're able to hop on the train in case it does move this week.

Here is a bullish scenario. If the pair rises and close above its 24% Fib line, buy the pair and go for the pile of dough at its swing high. Place your stop where I've marked “X” which is behind the purple 200 SMA . As long as the pair doesn't close below its most recent low, which right now is at its blue 100 SMA, there's a possibility that this pair will move up.

Here is a bearish scenario. Wait for the pair to fall and close below its blue 100 SMA and 38% Fib extension line. Then sell it. Hide your stop behind the pink 50 EMA marked in “X”. A safer stop would be behind the purple 200 SMA but you have to watch your reward-to-risk ratio. You profit target is at your discretion and based on your greediness. Feel free to cash out at any of the Fib extension lines with a pile of money on it.

4 Hour Chart

The pair is trading in a descending channel right now. The pair bounced off the bottom of its channel and has hit resistance at its middle Fibinnel line. Any attempts to move up should be suppressed by its purple 200 SMA for now. Here's a low risk trade. Short now. Place your stop above the purple 200 SMA and top Fibinnel line. Go for the bottom of the channel. I like this trade because if we're wrong, we lose very little. But if we're right, lorda merci!

GBP/USD

Weekly Chart

The pair is still trading in its descending channel so I still have a bearish bias. It looks like this pair will want to test its support at the top Fibinnel line. I don't know if it'll move that far down this week but you never know.

Here's a weekly chart with Fibonacci retracement levels that I've kept on my charts since the summer! If you watch where the price hits support and resistance, the Fib lines are still holding to this day. Amazing. A super aggressive trade would be to short now and go for the pile of cash at the swing low. Place your stop above the most recent high which I've highlighted in purple. I think this trade will work due to the price action of the last two candles. They have both have long upper shadows.Remember, candlesticks with a long upper shadow and short lower shadow indicate that buyers dominated during the session and bid prices higher. However, sellers later forced prices down off of their highs and the weak close created a long upper shadow. This tells me that buyers are weak compared to sellers or buyers are sitting on the sidelines because they're scared or don't know what to do right now and pondering whether to wait it out for now or to join the sellers.

On this weekly chart, I've moved the Fibonacci retracements to its most recent swing high and swing low points. As you can see, there's many different ways you can wield the Fibonacci retracement tool. You will know you've applied Fib line correctly when you look at the candles and see that the Fib lines are acting as support and resistance levels. The more you use Fib lines, the better you'll get at using them. You'll notice here that the pair retraced upward to its 62% Fib line and has started to fall again. Because the price bounced off the 62% Fib line, I feel that this pair's downward movement will resume. When the pair closes below its 24% Fib line, I will sell this pair and target its swing low. I will place my stop above its 24% Fib line where “X” marks the spot.

Daily Chart

The pair is still trading in its ascending channel and looks to have found support at its middle Fibinnel line and pink 50 EMA. I see two possible trades here:

1. If the pair rises and closes above its top Fibinnel line, buy the pair and target its purple 200 SMA. Place your stop below the middle Fibinnel line.
2. Wait for the pair to fall and close below its bottom Fibinnel line and then sell it. Target the bottom of the channel. Place your stop above the middle Fibinnel line.

Here's a daily chart where I've removed the channels and added good ol' Fibonacci retracement levels. Also notice the two trend lines I've drawn in green. I'm going to sell this pair when it closes below its 38% Fib line, pink 50 SMA, blue 100 SMA, and green trend line. It has to close below all three of these. I will place my stop above the 38% Fib line. I will have two profit targets. My first profit target will be the lower green trend line. I will then move my stop and place it behind the 24% Fib line and lock some profits. I will then go for my second target which will be the swing low where the big pile of money lies.

4 Hour Chart

Here's my triangle lesson. Notice how the pair was trading in fairly symmetrical triangle. It was able to break through the bottom of the triangle and fall lower. Now the question is, “where will the pair go now?” The best answer is off course, “I don't know!” But I thought this would be a good opportunity to share a short lesson discussing how to trade a triangle chart pattern.A good way to come up with guesstimate on where a pair will move next after a triangle breakout is to measure a triangle's max width. Then take that value and either add it or subtract it from the apex of the triangle depending on whether the price broke above or below the triangle.In this example, the triangle was about 410 pips wide at is max width. The apex of the triangle is around the price of 1.7750. The pair broke below so I subtract from the apex of the triangle. So I subtract 410 pips from 1.7750 to see how far this pair might go and I get the value of 1.7340. So I'm looking for this price to fall to that value. Now it might not necessarily fall to that exact level but it at least gives me a good idea on how much further it can fall.Off course I don't expect for the price to just drop like a rock and hit this level tomorrow. Although it could.Look at the black arrows I've drawn. I actually expect the pair to rise and attempt to penetrate the triangle but hopefully will face stiff resistance and resume its descent.Another key observation to know is that it took a little over two weeks from when the triangle formed to when the pair broke out below the triangle. You could use this information to also guesstimate how long it'll take for the pair to hit your projected target as well.So by looking at this chart, my best guess is that this pair will now fall to around the 1.7340 level and it could possibly take two weeks to achieve this.Remember, nobody knows where the market will go next. It's all about probabilities. All you can expect is for the market to move or to express itself in some way. But based on how the market has moved in the past when it breaks out of triangles, the odds of it moving in my direction are good or at least acceptable in regards to how much I'm willing to spend to find out if I'm right or wrong.

USD/JPY

Weekly Chart

It looks like this pair has hit resistance at its top Fibinnel line. It's still trading in its ascending channel so for now I have a bullish bias. Isn't it wonderful how this pair gladly obeys its channel boundaries? I love it. If the pair is able to close above its top Fibinnel and green trend line, buy this pair and cash out at the top of its channel where the pile of money is. Place your stop below the bottom Fibinnel which I've marked with an “X”.

Daily Chart

Here's a daily chart with Fibonacci extensions applied. The pair has managed to close above its 38% Fib line so now I'm looking for it to rise and go for its 50% Fib line. Support right now is its 38% Fib line. I think this pair will fall and test its support before resuming its uptrend.You could wait for it to do this. Buy the pair when it hits its 38% Fib line again. Place your stop below its pink 50 EMA or blue 100 SMA, whichever is lower. Go for the 62% Fib line or be greedy and try to reach its 76% Fib line.

Let's play devil's advocate and assume this pair is done rising for now and it's time to fall back down. How far down will it go?

Well we can use Fibonacci retracement levels to find an answer. There's good support around the 38% and 50% Fib lines because that's where the moving averages are also. If this pair does fall, I think that's where it'll find support.You could short this pair now. Place your stop above its most recent high and take profit at its 38% Fib line.

4 Hour Chart

Check out this chart. Talk about a bullish run! Can it continue its upward move? We'll see. Here's some good trade ideas for this chart.Wait for the pair to fall and test its green trend line. If it fails to break below it, buy the pair and target one of the Fib extension lines on the first daily chart.If it does close below the trend line, sell the pair and target its pink 50 EMA.

Keep an eye out on this chart. The pair tried twice already to break above its 62% Fib line but failed. This not a good sign but it's too early to say that the uptrend is over. If the pair closes below its 38% Fib line, then it might be time to look for more short trades.

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