Sunday, January 17, 2021

EUR/GBP: a test of the lows.

At first glance, we can notice the repeated test of the bottoms;  this fact is known as a confirmation of the buyers' strength in that resistance area: for this purpose, look at the green arrows; the fact is recurring six times if we consider also the last trading session; a break with other confirmations could trigger a bearish set-up until 61.80% FIBO level (at about 0.874) or even below that level, at about 0.867, the lower side of the first rectangle area (from April to June).

Indeed, the mentioned lows are highlighted also by the lower side of the following rectangle areas (from June to September; from September until today. The last rectangle area is bordered at the top by 23.60% FIBO level that links the top (at about 0.949) and the double bottoms, at about 0.827 (100% retracement). 

The chart shows also the discharge of both oversold and volatility, from the lower band of the BBs and the consequential rebound in prices: it is very important to follow the next trading sessions, in order to understand the market moves and in order to set a bullish or trading strategy, respectively; the chart picture is very promising in a rebound, considering what happened before. 


Chart from Markets.com


To conclude, the price is also near the 50% FIBO level at about 0.888, a critical level in one direction or another. Let's look at it, in assessing the market intentions. 

Wednesday, September 23, 2020

EUR/CHF: a trading range.

If we look at the chart, we can notice that the most suitable trading strategy is the trading range, among the two FIBO levels, respectively at about 1.072 (lower level and support, buy-level) and at about 1.085 (upper level and resistance, sell/short-level). The two levels represent 38.20% and 78.60%, FIBO retracements of the movement top-bottom, from the high of June 2020 (1.091) to the low of July 2020 (1.06). The prices are fluctuating in that trading range area or rectangle area: in other words, the break of the upper or of the lower area could trigger two targets above and below, at least near the previous top (100% FIBO) or at least near the previous bottom (0% FIBO).
If the conditions will not change, this is the current context, due to the chart framework.


Chart from Markets.com


The trading range is marked also by the flattening of the EMA bundle and also by other indicators like MACD, RSI, CCI. The latter report neither an overbought nor an oversold area. It is a general flattening and rebalancing among bulls and bears. After a bullish wave until 1.091, we have seen total reabsorption: now, it is a lateral trend marked by the restricted volatility of the BBs and of the PSAR.
The presence of small candles or candles with small bodies emphasizes the mentioned market context: we speak of many candles with upper or lower shadows or Doji candles; the only and remarkable ups and downs are shown by long candles, green or red, however always within the rectangle area.
We just have to wait for the next market sessions; until then, we need to trade that area.

Sunday, May 3, 2020

AUD/NZD: a pullback.

At first glance, we can notice a pullback in the chart, from the previous top at 1,075.
The pullback comes from the upper band of the BBs. It is also highlighted by a candlestick pattern: specifically, a shooting star; its upper shadow (maximum) represents the stop loss of a short trading strategy; then, the red color and the following red candles are a reliable signal, for this purpose.
Anyway, it is too early to speak about a trend reversal even if this signal is a good starting point. 
Let's look at the next trading sessions, at the crossover, respectively, of the RSI (repulsion from the overbought area, 70), of the MACD (cross of the signal and MACD line) and of the momentum (from above to below, the zero line).

Chart from Markets.com
Chart from Markets.com

With the confirmation of the trend reversal, it will be interesting the evolution of the chart framework, in particular, about the test of the yellow area, the rectangle, that previously, represented a trading range area, before the current bullish trend. The lows of the rectangle are the main references for the reason that these minimums and support levels were very important, in the past (38.20% FIBO retracement, 1.031/1.032). The same thing for the upper line (61.80% FIBO level, 1.053).
Finally, it is interesting also to look at the volatility: BBs, upper, lower and the median line (red line); the slope and the cross of the EMAs bundle (they are very flattened in the rectangle and TR area; otherwise, they are widely spaced in the bullish and bearish momentum). We can say the same of the parabolic SAR (the black dots).

Monday, January 6, 2020

NZD/USD : chart framework.

At first glance, we can notice the beginning of a downtrend (this last one should be confirmed in the next trading sessions, of course). This is due to :
  • A Doji candlestick pattern (it emphasizes both weakness and indecision in an uptrend ; if it is confirmed in the subsequent sessions, it is a good signal) ;
  • Linked to the previous aspect, the are also two red candles ;
  • The BBs shows the overcoming of the currency cross on the upper band (for this purpose, see the shadow of the Doji) ;
  • The RSI shows an overbought area (above 70, see the bullish trendline of the indicator and its blue line) ;
  • The upper shadow of the Doji represents a repulsion area (look at the previous top and at the horizontal line).

Chart from Markets.com

Let's have a look at the following charts. We can notice that the bullish trend is well set, marked by the parallel channel. However, there are the first symptoms of subsidence, due to the above-mentioned reasons and due to other indications. The MACD shows the crossing of the red and blue lines and crossing of the histograms, from top to bottom (over line zero).
Moreover, we are in the proximity of the test of 23.6% FIBO level and near the median line (BBs) and EMA 20 (a break of this level, it would be a great short signal ; see the yellow ellipse). 
The second bearish target will be the 50% FIBO level (this last one is also the double bottom, see the green arrows and blue ellipse). 

Chart from Markets.com

Chart from Markets.com

In the following chart, the parabolic SAR is set, in the form of black crosses. There is a first black cross above the candles. We need almost two or three other crosses for a clear and short signal. 
So, lets' follow the next trading sessions.

Chart from Markets.com

Finally, we can say that there is not a strong trend reversal, at the moment. It is too early to speak about it. In spite of this, there are good signals of the weakening of the current trend : if it will be confirmed, it will allow us to set up a bearish trading strategy with the first target 23.60% FIBO level and the second target 50% FIBO level. We can take a few more risks by anticipating and benefit from the movement, with a tight stop loss just above the maximum of the Doji (at about 0.68).