Latest Forex Commentary

Dow Jones Stalling At Market Highs – Waiting For A Breakout Candle

The US markets come back to life after deadly consolidation over the Trump win. We got a ‘Trump rally’ into all time highs on the US markets.

But where are we now? Well the situation is this – the market has basically stalled at new market highs here. The price action is showing boxing consolidation which I’ve highlighted with the square.

When this consolidation structures occur, we basically sit and watch for a breakout. Generally a thick bodied, solid breakout candle is the best signal.

Although we’re in a clear uptrend, it could still break either way, hence why we wait for the chart to demonstrate to us which way the market has decided to breakout of.

Right now there is a similar setup on the EURJPY where we have a bearish breakout of a box consolidation structure, and I’ve been short a few days on a bearish box break on GBPNZD.

These setups seem to be popping up everywhere, they are definitely worth watching as consolidation structure breakouts can generate big moves.

Lets wait and see what happens here with the DOW.

GBPJPY Violates Structure Support – Looking For Bearish Continuation Signals

Looks like the GBP pairs have started off 2017 pretty rough, and today the GBPJPY was no exception.

As you can see on this 8-hour chart, we had a clean, decisive break of this support structure today.

The candle that actually broke through this level has an above average range and closed quite close to its low. That makes this one a strong bearish candle which suggests that the bears are really getting serious here.

This breakout sets us up for a potential retest of former support, which is now anticipated to act as a resistance level.

The old structure support is now a hot spot for bearish signals to form, which would create a potent swing trade opportunity.

These kind of consolidation breakouts can kick off really strong moves, so if we don’t get a sell signal on a re-test, watch for any sell opportunities at lower highs.

 

Best of luck on the charts.

EURAUD Simple Range Play – Rejection Off Range Top

euraud-range

Looks like the USD has displayed some weakness to start off the week, setting up a lot of charts towards a mean reversion. NZDUSD outside candle off support looks great, but an ideal retracement entry looks unlikely.

For those who watch the war room weekly commentary, we talked about EURAUD potentially becoming range bound. We are looking at the previous highs to behave as resistance again, as the market had a range bound like structure.

Today we have a rejection candle off the range top, which is also is in fact, a weekly level – price is demonstrating/communicating it is still holding as resistance at this important level.

If this fires off a downward move, likely targets will be the obvious range support bellow.

 

Ranges Gonna Range

euraud range success

A very simple trade idea, and a simple and easy outcome.

Nothing is more simple than ranging markets, you just need to look for clear ranging structure and let the market tell you when to get in.

Some say candlestick confirmation is bs, but for ranges I think its the lifeblood of a good trade. Ranges can get very ‘whipsawish’ around boundaries, best to wait for say that rejection candle to let you know what the market is trying to do.

This one played out by the book – range top to bottom. Now we would expect the market to bounce off the bottom, but again, candlestick or price action confirmation is key here – we don’t want to just buy blindly.

If you’re interested in learning more about price action trading, and how to read charts in a simple manner – the war room might be something you would benefit from.

All the best on the charts this week.