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10-2-11 Forex top down analysis

10/02/2011

Over the weekend, I generally spend a few hours looking at larger levels in the markets.  I redraw my main trendlines and fibs and I generally take notes that I’ll use to flavor my trading over the coming week.

I thought I’d try sharing this for several weeks and see if anyone else finds it interesting or useful.  As always, I look forward to any feedback, positive or negative.

A few things that I try to remember in trading throughout the week:

  • Trade in the direction of the path of least resistance.
  • Careful shorting lows or buying highs, but don’t consider every bounce a trend-reversal.
  • Keep the big picture and larger levels in mind at all times.

10-2-11 Forex top down analysis

Overview: looking for short term bounces in most major pairs.  Weekly, we begin with a dollar positive tone, but many majors sitting on strong support/resistance areas.  So, caution over shorting lows etc.  Wouldn’t be surprised to see bounces into fib retracements on most pairs into beginning of the week.

Eur remains weaker than Gbp, so may consider trading EUR/GBP with a  Sterling bias.

 

Eur/usd Short watch

Monthly and weekly, strong downtrend.  Currently strong close through 50% retracement. Look for further downside to 1.30642.

Daily: Strong bear close.  Potentially bouncing into some support at 3386 area.  Look to short pullbacks.

Hourly: Very choppy movements.  Still in a hourly downtrend, but potential triple bottom at current levels.  I would look for a bounce to the 3524 area before initiating short positions.

M15, respecting well, sell the 50% retracement, targeting 123 extensions.  Currently sitting on a short term extension.  Look for a bounce before shorting. If we break the 345 area look for a move higher to the 3524 area.

 

Gbp/usd – Look for a bounce or further consolidation before downtrend resumes

last week closed as a pause bar on 50% retracement of move from 5-21-10 to high of 4-29-11.  Will likely see further downside eventually.  Short term however, we have a daily trendline break.  Consider looking for shorts around 1.58 – 1.5981 area

H4 looks like a bull flag consolidation.  On the short term long side, this flag held the 50% retracement.  I would look for further upside to 1.5827 area, as discussed above.  (also area of unfilled gap on my chart 9-18-11)

M15 is a mess

M5, look to trade with the trend.  Looking for solid MA and trendline breaks.  Looking to buy or sell pullbacks after a short term trend has established itself.

 

Eur/gbp.  Short watch, look to short the pullbacks.  Current daily short move looks overextended to me.

Weekly and daily show strong downtrend established.  Weekly, look for downside to the 8504 area (200 period ma)

Daily, if we take out the bottom at 8537, look for a fib extention to 8457 area.  But caution shorting lows.

H4 and H1 show strong downtrend, possibly overextended.  We bounced off 1.50 extention of move from 8796 to 8750.  Looking for a bounce in this area

It’s difficult to draw a good short term (h1 trendline) of this steep move.

M15, Short term, shorts caution, looking for a potential bounce back up into the 8632 area, but only if we have a convincing break.  Possible bounce all the way up to 8651 area.

Below current lows, looking to continue downtrend.  Above 8597 area, looking for a bounce up to fib retracements.

 

Aud/usd Strong downtrend. 

Slammed into weekly 100 ma – 50% ret.  Look for a bounce in this area before continuing short move. If we take out this level (9590 area) look for further downside to 9239.

H4, if this bottom holds at 9625, look for potential retest of 9938 area.  IN addition, parity is strong psych and technical support.

M15 etc, still in a strong downtrend.  Fib moves are a bit exaggerated.  Short term, a break of 9662 opens the way for 9725 area.

Caution over shorting lows.  Looking to sell pullbacks.

 

Usd/jpy.  Boring on the daily.  Looks like it may be carving out a bottom around 76.  Would look to buy dips, but not with any great enthusiasm.

Usd/chf – uptrend since intervention.  Looks like USD has possibly taken over CHF’s leading roll as a risk off currency.

Gbp/jpy Flirting with all-time lows.  Look for continuation of consolidation of possible higher bounce.

if we take out 120.70 looking for 123.67.  Daily and hourly trendline break biasing long.  Possible triangle being formed on h1 chart. If we take out this double top at 120, look for further bounce to the upside.

M15, potential fib support at current levels.  Looking for a short term trendline break for potential long.

Eur/jpy, similar story to gbp/jpy above.  H1 sitting on fib support, looking for bounce.  But, Eur clearly weaker than Gbp.  So, only looking to sell short term bounces.

 

Eur/aud very interesting.  (have short biases on both eur and aud vs. usd remember).

Looks like possible H&S on h1 chart.  Like selling current levels (sitting on hourly fib) targeting neckline.  If neckline breaks, we may see further downside to 1.3643.

 

 

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