29 January

Weekly Trend direction: Bearish

Weekly trend reversal level: 1.4414

Key G7 resistance levels: 1.4240/65, 1.4300, 1.4370


Counter-trend opportunities: 1.3850
Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.

Today's trade suggestion:
A good thing I stayed out of the market on Friday, as the currencies experienced “typical” Friday volatility and unpredictability. The reversal we experienced earlier in the week (after the weekly support level was broken)
served well to keep us out of further long trades and we are now able to re-evaluate at the start of this week. It’s a little tricky. The direction this week is firmly short, but we are at a major 38.2% Fibonacci support level which should provoke a sharp bounce. It’s best to wait for a bigger rally before selling, with a key resistance level in the 1.4240/65 level. Watch and wait for a clear G7 reversal pattern before selling into this level, with tight stops above the reversal pattern. Initial target should be around 1.4160 (the 25% Fibonacci level today) Update: The euro continues its slide down. I wouldn’t call it unrelenting, but it’s steady. Now that 1.4000 has been broken, and we’ve had a daily close below there, it’s possible that the price is heading towards the 61.8% extension at 1.3850. There won’t be an opportunity to sell today, but if we do reach 1.3850, there’s an excellent chance to try a small counter-trend long trade if we get a clear reversal pattern. Other than that, see you next week!

Summary:
Perhaps try small counter-trend longs at 1.3850 if and when we get there!

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01 Feb

Weekly Trend direction: Bearish

Weekly trend reversal level: 1.4200

Key G7 resistance levels: 1.3980/1.4000, 1.4020*, 1.4060, 1.4120

Counter-trend opportunities: 1.3850

Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.

Today's trade suggestion:
The euro continues its slide down. I wouldn’t call it unrelenting, but it’s steady. Now that 1.4000 has been broken, and we’ve had a daily close below there, the price has reached the 61.8% extension at 1.3850. There won’t be an opportunity to sell today, but if we do reach 1.3850, there’s an excellent chance to try a small counter-trend long trade if we get a clear reversal pattern. Remember that counter-trend trading is riskier, and you should only attempt this with a small position and tight stops. The target for long trades is 1.3980/1.4000 where long trades should be closed while we watch and wait for signs of reversal back to short – to go with the main trend direction. We’ll see what it looks like if and when we get there. Interesting to note that last week’s bearish candle was completely “shaven” No wick on the bottom side. Sometimes that can lead to a dramatic
reversal.

Summary:
Perhaps try small counter-trend longs at 1.3850, target around 1.4000 (or earlier if it falters). Then watch and
wait for an opportunity to sell.

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Update 05 Feb: Well, I expected the euro to drop back from 1.4000, and it didn’t disappoint. We have had an excellent 8 days trading the euro, but it’s best to hang up the keyboard today, as it’s NFP Friday. If you MUST trade today, perhaps wait until 9AM Eastern before evaluating the impact of the news. Note that 1.3685 – 1.3650 is key support, formed by two 100% Fib extensions, and presents the best opportunity to BUY the euro if you are going to trade.

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08 February

Weekly Trend direction: Bearish

Weekly trend reversal level: 1.4030

Key G7 resistance levels: 1.3720/50, 1.3800, 1.3860

Counter-trend opportunities: 1.3580/1.3600

Strategy: Whilst below the weekly trend reversal level sell rallies to resistance levels after an entry signal.

Today's trade suggestion:
The Euro slipped further down on Friday after the jobs report, as I suspected it might. The 1.3580 level is such a key support area, that it was always likely to act as a price magnet as soon as 1.3800 was broken. This leaves the
euro in an incredibly oversold position (the most dramatic since November 2008) and we are likely to get a bounce or spike low sometime soon – perhaps this week. We’re still looking to sell euros from the resistance
levels overhead, but we need to be rather more cautious this week due to the factors just mentioned. Whilst on the topic of “oversold” and “bounces” it might be worth trying a small, counter-trend long trade from the vicinity
of 1.3580/1.3600 (if you can get it) with stops below 1.3570. Overhead, resistance levels lie at 1.3720/50, 1.3800 and 1.3860. As always, watch and wait for a clear G7 entry signal before selling for a target of 1.3600.

Summary:
Sell on rallies to resistance levels after a clear G7 entry signal, or try tiny counter-trend longs from circa 1.3600,
stops below 1.3570.

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Update: A decent rally from support put euro up at first resistance near 1.3820 yesterday. Price action is messy and hourly candles have been as large as 120 pips. Probably best

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Next report will be Wednesday the 17th...

In the mean time though...

It'd be awesome If you could join me and
the rest of the charter group members in
our live trading session tomorrow.
Click the link to register, and I'll see you there:

https://www2.gotomeeting.com/register/669896386

Quick reminder: I have no idea when we'll
finish. It depends on the number of questions,
how long I take to reply, and when we finish
trading. Normally the first hour is the Q&A
time, followed by hourly updates during the
trading day.

If you log on after the start, and you are told
to wait for the organiser, it means we have
finished. However, I always put the recording
up in the member's video page over the next
day or two, and you can log in to watch.

Speak soon,
James

P.S. Sometimes (not very often) I send the
invite to other traders on my list as a special
"treat" If you are not a member, but would
like to take a look at how we roll with this,
You can check it out at the link below:

Forex-Science Currency Trading


I'm running a special offer at the moment
for $4.95

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Update Wednesday: The euro certainly sold off – but unfortunately, too far, too fast and from an “in-between” level, creating a nasty fake-out. We’re still looking to sell into rallies to between 1.3600 and 1.3650 where there could be a good G7 entry signal later in the day. Short term target 1.3500, and then lower.

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Weekly Trend direction: Bullish

Weekly trend reversal level: 1.3440

Key G7 support levels: 1.3600, 1.3540/70, 1.3500

Counter-trend opportunities:

Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.

Today's trade suggestion:
Another weekly “doji” candle and an “insider” candle mean that the probabilities have shifted towards a bullish week for the euro this week, and perhaps even a medium term bottom. We shall have to wait and see. In the
meantime, I’m now looking to buy dips whilst we are above the weekly reversal level at 1.3440. As I write, we are at first support at the key 1.3600 level, which also happens to be a confluence of S/R, the 38% retracement level and the 200EMA. This gives a high probability trade, but more importantly, a tight stop loss and a decent target. Look to buy here, stops below 1.3590, for a target of at least 1.3700. If support at 1.3600 fails, then I’ll be looking to buy lower down at 1.3540/70 or 1.3500. Although this is a good setup, be aware that market turning points can take a while to “solidify” and we may still get a lot of movement between 1.3600 and 1.3400 for the next week or so.

Summary:
Buy dips to support after a clear G7 signal. Short term target 1.3700.

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Weekly Trend direction: Bullish

Weekly trend reversal level: 1.3434

Key G7 support levels: 1.3550, 1.3500, 1.3450

Counter-trend opportunities:

Strategy: Whilst above the weekly trend reversal level buy dips to support levels after an entry signal.

Today's trade suggestion:
After being stuck in the same range between 1.3500 and 1.3700 for over a month, there is little to add to the past few week’s analysis. I continue to be bullish on the euro after a series of weekly Doji candles, however, the longer we stay like this, the more likely a false spike lower becomes. Support below is clearly demarcated at 1.3550 (yesterday’s intermediate bottom) and 1.3500, with the weekly reversal level at 1.3450. Continue to look to buy into dips after a clear G7 entry signal, aiming for the top of the range at 1.3700’ish. Remember that ranges can often be broken falsely on the “wrong side” and euro longs should be treated with care. Keep stops tight. If we don’t rally back to the range ceiling this week, be prepared for a sudden drop below 1.3450 – perhaps with a dramatic weekly spike low somewhere below.

Summary:
Buy dips to supports after a clear G7 signal. Short term target 1.3700.

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Update Friday: A double bottom at 1.3550 and an amble back to the top of the range at 1.3700 as expected. What happens today is probably going to define the next medium term move. A drop back means there’s a good
chance of falling through the bottom of the range this month, whereas a move through the top could mean a rally to 1.4000. If you are still long from yesterday’s live trading, ratchet up your stops to just under 1.3620 and
wait for the break!

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