Monthly Thread: April 2004

[rezo_s]

Hi All.

New month started and I am holding an open position: sold USDCAD at 1.3124 with stop at 1.3235 and initial target 1.27.

I would like to focus on 2 pairs (I will not talk about EURUSD - I spoke about it a lot lately and it can be found in last month thread with charts - we bounced back from the trend line/support area of 1.2050-1.2100 and now it may be a beginning of renewed up trend. Will see).

I will post today about GBPUSD and USDCHF.

GBPUSD

Last month when we retested the 1.8500-1.8600 area (23 and 24th of March), I posted a similar chart and said that area was very important because there were 3 selloffs of that area and I questioned whether we would break the resistance that time.

Well, now its the very same question, and the fact that lately we got the 4th selloff means that its a very important area indeed. Cable is trading at 1.8465/70 the moment I am typing and it has just retested the area above 1.85 with followed selloff.
This is a crucial moment in my opinion, and if we see a sustained break above 1.85-1.86, its a clear signal market is on its way for 1.90-1.91.
I think that even if we close the price above 1.84 this week it may still be a good sign market will break that level. I don't know exactly, but I will be looking at the market earlier next week and will post what I think. I am saying that if we break upside, entering longs (for me, possibly only next week) is the scenario after finding good entry. If we do not break but we still stay close, it may still be an option. That is in case there will be no strong selloff and market will show signs of strong upside potential.
At the moment we saw a minor selloff coming from areas above 1.85, and it only means there were not enough buyers there, and maybe selloff was caused only by profit taking. We will see how it goes and we act accordingly.

For now we watch.

 

[rezo_s]

USDCHF

Little different but still a breakpoint situation may be observed on USDCHF pair. we are not in a minor but still a channel on daily chart. Even if not looking at it as a channel and look at support-line-part of it as one line created by 2 recent bottoms, its still important to see whether market will be able to break it down and retest the year low below 1.22 or not.
I don't know what happened if we don't break it, but if we do, it is also a good sign to start seeking for short entries with initial target at 1.24, and possible retest of 1.22 with option of seeing new multi-year lows.

Good Trading,

Rezo

 

[rezo_s]

sell $/Yen now at 104.16

stop 35

tgt 55

 

[bgold]

Hi rezo,
Are you running this position open over the Employment figures? I recall the market response on last month figures (!), market reaction (perhaps completely irrational), could easily gyrate within a 2pt range shortly after the publication at 14:30 BST.
Quite a gamble!

 

[rezo_s]

Here you go.. you did it

I dont follow the fundamental news and I try not to know when and what is due to come out.
I am not gambling my friend. I am working. Whenever my rules show me a good opportunity - I enter.
It doesnt matter for me if there are any news coming out or not - thats why I dont want to know what is expected or due to come - I dont want it to effect my trading decisions. But this time I am already in, so it is not of any difference.
I dont care whether this position will run over the report or not - I enter because I see I need to enter and there are orders to handle the closing of the position.

Regards,

Rezo

 

[rezo_s]

EURUSD

Hi all.

Been away. Had some personal problems, that I had to take care of, but everything is ok now.
Seems like we are finally seeing some action, but after almost 1.5 months of choppy market, this is still very little to say that we are finally moving anywhere. More action and more confident move is required to say that we are going down on EURUSD. Today we broke the 1.2000 level and are currently trading at 1.1935/40 after being as low as 1.1915.
Reversal up is still an option (well, actually its always an option both ways). I am talking about reversal up on EURUSD, because of the 2 year up trend. Strong upside trend memory is still fresh, but we are seeing market becoming more and more confident about selling EUR and starting to buy US$.
If we look at the daily chart, we see that we were is a mixed market with very poor trading, but on weekly chart, we see that market was moving down step after step. I tried to sell euro last week, but was stopped for stop loss. Now I am looking to sell again. Nothing certain, but will see.
Now lets take a look at the daily chart below. we see the supporting like still being in place (same like I was posting since the end of last month and was selling for its break). We are once again testing it right now and if we see a break of it, we may finally see the breakthrough south. First support is coming from 1.1850-1.1930 area and in combination with (if we see) a break of 1.1850 which is a 50% retracement of 1.0800-1.2900, it may be a good sign of further decline towards 1.1400 - 1.1550 area. I may try to sell for both longer term and small (50 pips) targets after we see some consolidation.
I will post about other pairs I am looking at a bit later.

 

[rezo_s]

USDCAD

Break of 1.34 resistance area is of a very high importance, just as 1.1850 is for EURUSD and maybe even more. It has been a resistance area keeping USD from further appreciation for over 5 months now. There are good indication that this time we may retest it for break, but will we break it is the question. If we do, strong enough move up should be triggered.
In case we break it, 1.3750 is the next resistance seen up there, so that is the first target:

 

[rezo_s]

GBPUSD

Have put a stop-sell entry order at 1.8120 for case of a trend line break on Cable. I dont trade breaks very often, but this one looks nice, risking only 30 pips with 200 pips potential target .

Stop loss: 30 pips
target: 1.7920

 

[rezo_s]

Morning all,

the entry order was activated and we are short GBP at 1.8120. As I am typing ptice is at 1.8088/92. Been as low as 1.8080 - thats almost the 30 pips stop loss, so I have just moved the stop loss to entry level.

 

[rezo_s]

stop triggered - zero profiot, zero loss.

 

[jaykay3]

GBPUSD - despite your zero profit/loss that was an excellent trade you had on there Rezo. I have just started looking at FX and am finding your posts very educational. Do you trade only FX and if so is it because you find it a 'smoother' market ?

jaykay3

 

[rezo_s]

jaykay3,

thanks on the kind word...

It was really a shame on what happened with the stop loss - it went back only once and to as high as 1.8121, closed me and resumed its way down in a very short time. Well, those are 200 pips that I am missing, and that is 8 to 9% of profits...very nice profits...
But hey, this is market and although its a shame, I am not that much nervious about it. This is the work I do. Of course it would be good to see those 200 pips taken that we are down 5.8% for this month so far, but...we have what we have.

About FX and other markets - I dont find other markets as good to be traded technically as this one. Its 24h and better trending. In addition, this is the first market I started trading and till now there is no other market that I find as attractive as this one.

Good Luck!

Rezo

 

[skipperharris]

Hey Rezo, nice try and sorry you missed out on a "big bagging" So close :!: that's the trouble with using tight stoplosses i'm afraid. I'm the opposite and tend to trade longterm on cable/Euro using up to 300pt stops to cover for temporary U-turns! Very nice graph and predictions which i follow with interest and 'thanks' for your post and technical analysis. I am no expert and tend to trade on fundamentals primarily and back up with graph trends to access support and resistance levels.
I wander how much further the dollar will strengthen from here :?: We could be looking at 1.15 for the Euro and 1.75ish for cable.
I hope you have better luck next time, you deserve it
Take care
Skip

 

[rezo_s]

Thanks Skip.

Well, about the "how far"...
First we need to see how Euro handles the 1.1850 area (and that area is pretty serious: 1.1830 - 1.1870). If we break below that area, I think the least we can see is 1.16 followed by 1.1400 - 1.1550 area.
About Cable: it broke the 1.79 low we had for over a month, it broke the 1.7825 low (3 months old) and now there are no real support areas down there. But it doesnt mean we will go to below 1.70... at least its not obvious anf taken as granted. Maybe market will form a new bottom and we will see it somewhere near the round 1.75. Because when/if market doesnt have any support/res line on the way and it needs to correct/reverse, then there are several options (well, more than several..but here are some). Either at MA levels, Fibo levels, round number...or other serius indication. At the moment we have (daily chart):
MA: 21,50,100 - broken;
Fibo:
38.2% around current 1.78;
50% at 1.7350 - 1.7400
And more or less round 1.7500 figure on the way...

1.75 is the highest, and thats what I will be targeting in case I enter next week. At lkeast partial position closing will be considered there. Maybe all.

Good Luck!

Rezo

Will see... But as far as I see it, it may be possible to start selling GBP for 1.75...will see. Probably next week we get some king of consolidation/correction (hopefully) and then we deside whether or not we enter.

Good Luck,

Rezo

 

[neil]

Is the strengh in the Dollar justified on fundementals ?

 

[rezo_s]

Dont know and I dont mix it with my trading. I trade only technicals. Maybe Skip can give an opinion on that.

 

[Buk]

only justification for current buck strength seems to be the recent positive?? data. Higher growth/Inflation & the laughable jobs increase numbers (albeit 90 odd % of them part time), which I guess offers the possibility of increased rates & further dollar bullishness.....can't really see that as a reason to get the party hats out, but it all helps to accumulate the pips I suppose!!....like Rezo say's....trade the 'picture' & stay flexible!

 

[skipperharris]

Good question Neil :!: I personnally think so for now, as all the latest data shows the US Economy definitely strengthening with prospects of a much earlier interest rate hike helping to prop up the $. Time will tell if this will be a short lived recovery but my hunch is that we could see 1.75 for cable and 1.17 for the Euro sooner rather than later I apologise if i am talking utter nonsense :cheesy: but this is my opinion so i won't be surprised if i am totally wrong
Skip :!:

 

[rezo_s]

next week

Hello fellow traders.

Lets take a look at the Euro.
The question right now is whether we already have or have not hit the bottom. Many see 1.19 and the low slightly below (the 1.1860/70) that was hit last week as a possible bottom. I tend to agree with that partially but still with a great caution.
I posted short time ago about the importance of the 1.1850 area, and indeed we saw strong buying coming from areas below 1.1900.
BUT if we look at the weekly chart we see that almost every week after the retest of 1.29 all time high, we got new lows each candle. Now lets ask the same question - whether or not did we hit the bottom yet. I wouldnt be very sure.
Yes, indeed the 1.1850 was and is a strong support and we couldn't expect it to be easily broken, but if we do break it, 1.15 becomes very well exposed.
Same support line that I was posting from late march is still in place and despite being sluggish, move south is there. Yes, indeed each time we touch it we bounce back, but that is due to market still being afraid to sell Euro with confident, but we cannot ignore that we moved 1000 pips from the 1.29 high in 2 months.
To sum up, I say we are moving slowly, but still down for now and if market will not form a good bottom right here at 1.19, we may see 1.15 maybe even sooner that we think. For now I do not trade this pair. Maybe later during the week. I will post. Currently I have an open position on USDCAD, but since I only posted comments on that pair and didn't make a call on that trade, I will not be talking about it.

Have a great trading week,

Rezo

 

[rezo_s]

We got hour candle close below the 1.1970 where the trend line is stading at. This may trigger further selloff.