AUD/USD: the multiple tests in a trading range.

At a glance, we can notice that the cross is in a trading range (see the yellow rectangle), between 0.72 and 0.727. Those levels are also respectively the 38.20% FIBO level and 50% FIBO level, of a set-up top-bottom 0.755 and 0.70. The 50% FIBO level represents also the upper level of the previous gap-down (see the yellow ellipse).

In this way, the mentioned price levels are very important because they are redundant. Some useful trading strategies should be the following: 

1) a short set-up from top to bottom (in the trading range, 0.727-0.72);

2) a long set-up from bottom to top (in the trading range, 0.72-0.727);

3) a short set-up of a wider scope, with a longer time frame, outside the rectangle; in other words, short at the break of 0.72, with confirmations and targets the lower FIBO levels, before 0.712, then 0.70;

4) a long set-up of a wider scope, with a longer time frame, outside the rectangle; in other words, long at the break of 0.727, with confirmations and targets the upper FIBO levels, before 0.733, then 0.743.

With this chart framework, the rectangle (or trading range) is the real focus: so, it is very important to look at it, in order to build our trading strategy, in one direction or another.

The following chart is explicative, of course. 

Chart from Markets.com

If we change the time frame, with a 4H chart, the view is the same.

The chart shows the multiple tests of the cross, at the tops of the rectangle. The tests are highlighted also by other indicators and oscillators, like RSI, CCI, and Williams %R.

The cross is in the overbought area: +100 for CCI, -20 for Williams %R, and +70 for RSI. This should represent a trend change (from an uptrend to a downtrend, from overbought area to oversold area) if the confirmations will occur, as previously said. At the moment it could be just a movement included in the trading range and a repulsion area with the tops of the rectangle as a resistance area.

The same thing is valuable in the hypothesis of the uptrend continuation (and not a reversal, in this way), with the break of the mentioned resistance area. 

To conclude, let's keep focused on the rectangle and on its levels, also if we look at the candlesticks chart: there are a lot of Doji candles and candles with large shadows; they represent a lack of trend, for the moment and otherwise, they are the symbol of a real trading range area.

Chart from Markets.com

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.

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).

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).

CRUDE OIL : bullish momentum (dumped).

We can notice that the bullish momentum with the last upside has been dampened, for the reason that the white candle is represented by a high wave pattern. The shadows show an equilibrium among the bearish and bullish strengths. 

Then, the gap up has been covered as quickly as possible: in this way, the following candle is a black candle that neutralized the previous candle. 

Chart from Markets.com

The chart shows also the FIBO retracements: 38.20% and 23.60% FIBO levels are respectively at the low of the black candle (see the gap down) and at the previous minimums.  

At the moment, in order to set up a trading strategy, it needs to understand the market direction: the high wave could represent a trading range area; only with a break of the upper or of the lower limit (see the green and red arrows), we could set a bullish or bearish strategy. 

COFFEE : technical analysis.

At first glance, we can notice a break in the downtrend. This last one started in July.

The previous trend was bullish, see the parallel channel. 

The break of the downtrend is bordered by the two dotted lines (at about 95 and 100): the 95 value represents also the previous support line and the 100 value is fixed at the maximum of the black Marubozu candle.

The break in the downtrend is also highlighted by the flattening of the MACD indicator and by the proximity of the three lines of the BBs (in this way, the volatility is fairly limited). The real bodies of the candles are not so wide and there aren't so many shadows, compared to the previous ones. 

There are also two references: the top at about 125 and the bottom at about 87.

See the image below. 

Chart from Markets.com

If we use another timeframe, for example, 4H timeframe, we can get a focus.

The break (from August to September) in the downtrend is confirmed, too. The lack in the slope of the EMA bundle highlighted this concern while in the previous situations, the slope is so marked and the flattening is totally faraway. 

Chart from Markets.com

To conclude, pay attention to the two references at 95 and 100. In this way, there is a trading range area that can be used to set up a trading strategy. With the break respectively of the upper area or of the lower area, we could set up another trading strategy, bullish or bearish. As usual, it needs other signals that confirm that hypothesis.

IMA S.p.A. : high wave pattern.

With regard to the chart of IMA, we can notice a high wave pattern. 

It is a particular candlestick pattern that underlines the market indecision. In this way, after the full year 2018 data release, and after a bullish trend, with the break of the previous congestion area, the bullish trend stopped. The market maker is evaluating the situation.

Indeed, the buyers, at the closing, left (the long upper shadow of the candle changed into a small real body). In the same way, the sellers left, for the reason that the long lower shadow changed into a small real body: there was strong volatility with a rebalancing of the positions sellers-buyers. 

See the following chart and the pattern. 

Chart from Investing.com

The upper and lower shadow represent respectively the resistance and the support area.

The market will make a decision when there will be a break of the support or of the resistance line.

As usual, we need other confirmations. In this sense, it is useful to check the pattern requirements.

In the high wave pattern, there are some conditions : 

• A small real body ;
• A long upper shadow ;
• A long lower shadow ;
• The length of the upper/lower shadow should be three times the real body.

With regard to the last one, we can observe that :

•  O (open) - C (close) = small real body = 66.60 - 66.25 = 0.35
•  H (high) - O (open) = long upper shadow = 68.50 - 66.60 = 1.90
•  C (close) - L (low) = long lower shadow = 66.25 - 62.80 = 3.45

The pattern requirements are met because :

• 1.90/0.35 = 5.43
• 3.45/0.35 = 9.86

Finally, let's look at the market mood and at the next trading sessions, to understand the intentions of the market players. For greater clarity, the following image shows what I explained before.

High wave pattern

GBP/USD : chart framework.

At a glance, we can notice some price levels. The last trend is bullish (confirmed also by the green candle), from 1.24 (see the bullish trendline). 

There is a support at about 1.249 and another at about 1.27. This last one is important due to the fact that previously, it represented a resistance (in the year 2017). 

Another price level is 1.32 : it is a resistance touched by the currency cross on October 2018 and in the year 2019 ; this resistance was touched also in the year 2017. 

See the following chart, to better understand the framework. 

Chart from Investing.com

The FIBO retracements are very useful in order to fix target prices. The price level at 1.32 is far important. It represents the 50% FIBO level and the watershed between a bullish continuation (with the break of the upward resistance) and a bearish signal (reversal with the repulsion of the mentioned resistance). 

Of course, to get a valid signal, we need more considerations. However, the price levels are pretty clear to set up a trading strategy. 

Chart from Investing.com

With a closer look, the situation is the same. The long candle is bullish and other indicators seem to confirm the uptrend : the crossover of the stochastics ; the intersections of the EMA bundle (10, 20, 50)  and the crossover of MACD and MOMENTUM (see the previous chart). 

Chart from Investing.com

With the last trading sessions, the bullish signal of the green candle would seem muffled (due to the shadows of the red candles, circled area). Anyway, let's look at the updates. 

Chart from Investing.com

EUR/GBP : chart framework.

From a bullish trend (beginning in the end of the year 2016 and lasted until september, in the year 2018), the cross started a lateral trend. This is showed by the following chart where the uptrend is highlighted by the trendline and by the support lines and by the resistance lines (it means the main references : 0,83 and 0.93 ; 0.86 and 0.89). 

Chart from Investing.com

We get the same view if we use a different time frame, for example a month. The monthly time frame shows the chart framework in a better way for the reason that it provides a general overview. 

We can notice the same references and then at now we can notice that the price is testing the resistance area at about 0.89. This price level is important because it represents also both the closing and the opening price of the previous green candle and of the previous red candle (see the circled area) : there was a price retracement and a volatility exhaust ; the green candle represented a long upper shadow candle ; in other words, at the end, the sellers prevailed over the buyers. 

The BB are emblematic, in this way : see the median line compared to the price and see the light blue lines compared to the price. 

Chart from Investing.com

We have a confirmation of the trade change (bearish - bullish - lateral trend) also by the indications provided by MACD : we can notice the intersection of the yellow and red line (MACD and signal line) at the time of the overcoming of the zero line (see the light blue histograms), from the bottom upwards ; symmetrically, from the trend change bullish-lateral, from the top downwards. 

Chart from Investing.com

Lastly, the EMA bundle shows the market direction : the following chart shows the slope of the EMA bundle where the trend is bullish and it shows the lack of slope of the EMA bundle where the trend is lateral ; then, the distance between the exponential moving averages is more marked for obvious reasons, in the uptrend (in this way, the EMA bundle provides a useful indication). 

The RSI shows the overbought and the oversold, in the levels of 70 and 30, respectively, as usual : the passageway through the two areas marks the change of trend in the chart, inevitably.
Of course, as I said previously, it needs to pay attention to the test of the resistance area at about 0.89.

Chart from Investing.com

Enel S.p.A. : chart update.

Here we have the chart update of Enel S.p.A. : the previous bullish trend has been confirmed ; indeed, the tops at 4.50 EUR and the top at 4.87 EUR are still valid (the same also for the dashed line, in the medium/long term) ; the pattern recognition (Dark Cloud Cover) has confirmed the change of the uptrend but strictly limited to the short-term. 

In this way, the last view was spot-on (for further info, please see the link http://michelecarollo.blogspot.it/2017/09/enel-spa-chart-framework.html). In the following charts, I propose the updated analysis with the previous levels. 

Chart from Investing.com

Chart from Investing.com

Now, let's look at the chart framework of the current situation. We must pay attention to the levels identified by the yellow circles (see also the FIBO retracements) : from the top to the bottom, 5.60, 4.80, 4.50, 3.40, 2.00. This is an overview to set a bullish or a bearish trading strategy, of course. 

Chart from Investing.com

We can notice a break in the previous parallel channel. This means that it is a first alert : it represents a price correction in the uptrend (even more so with a break of the support at about 5.00 EUR and then with a break of the top/FIBO level at about 4.80 EUR). The chart shows a volatility excess with the BBs indicator : that can be a rebound of the stock (for example, see the first red circle) or a confirmation of the abovementioned correction. The crossing of the EMA 50 and EMA 100 fits in this view. Therefore, the next trading sessions will be crucial in order to understand the market direction. 

Chart from Investing.com

If we extend the timeframe, the chart framework is very clear. Here we have a monthly timeframe : the price levels are those already mentioned. 

Chart from Investing.com

Enel S.p.A. : chart framework.

Here we have the chart of Enel S.p.A. : the stock broke the resistance at about EUR 4.50 (the previous maximums, yellow circles) and then, it broke the previous top at about EUR 4.90 (red circles). From a lateral trend (between 3.50 and 4.50), the stock began a bullish trend (still in progress) since the beginning of the year 2017. The bullish trend is highlighted with a blue parallel channel. We have another confirmation (also in the medium/long period) with the dashed line that is still valid. We can say that there is a clear bullish trend and unless conditions change, it will be confirmed : only with a break of the previous top (red circle) but mainly with a break of  the tops at 4.50, there may be a change in the trend and consequently a test of the lateral trend area (abovementioned). The change of the trend must be accompanied with high volumes, other patterns and other confirmations, in the following trading sessions, of course (at present, it is a bullish trend). 

Chart from Investing.com

The slope of the EMA (60 and 20) shows the uptrend, too. The RSI is not overbought but the values are in the neighborhood of the upper line. The bullish trend is strong but there are not nearly retracements. The uptrend needs a break (at least, in the short term).

Chart from Investing.com

The FIBO retracements indentify the previous price levels (see the first chart and see the blue circles) of the past resistances. It is very important to focus on those to set a short or long trading strategy, even if the trend is bullish, clearly. 

Chart from Investing.com

Analyzing the short-term, we can see that the BB show an high volatility, just after absorbed, with a candlesticks pattern, a Dark Cloud Cover. After a bullish trend, it is a bearish reversal signal. At now, it represents only a "volatility exhaust" and a price correction in the short-term.

See the chart and the following pattern recognition.

Chart from Uk.tradingview.com

A Dark Cloud Cover consists of two candles (white and black) : the black one has the opening price higher than the top of the white one and the closing price lower than the median value of the real body of the white one. As usual, we need a confirmation (a bearish candle after the black candle and a continuation in the trend change). The top of the black candle represents a resistance.