Latest Forex Commentary

Big Price Action Reversal Signal At Major Range Top – Gold Bearish Setup

gold weekly range top

During my normal review of the charts over the weekend –  I quickly identified a bearish price action setup on gold that I could not refuse.

This setup is straight forward and simple – just the way I like it.

Starting off the analysis on the weekly chart, it’s very easy to see the market is range-bound, and that price is currently testing the range top resistance.

These are the major levels where we should expect, and to look out for potential reversal signals.

Then when we step down onto the daily chart…

gold daily price action setup

On the daily chart we straight up see a bearish rejection candle (a reversal signal), coming right off the weekly structure.

The anatomy of the rejection candle looks authoritative, and is a high value trade when stacked up against a major weekly level.

My Battle Station chart assistant tool also sent me a notification to my phone – just in case I missed it 🙂

I am going to try grab a pull back entry if price retraces up the rejection candle – which it normally does when the candle is large in range like this.

If this reversal signal does play out, the reward potential is large here. Even setting a target mid way down the range will yield about 500% ROI!

I’ve set up my sell limit order, and waiting to get filled.

All the best for those trading this one 🙂

AUDCHF Major Bearish Reversal Signal – Lots of Downside Potential

audchf major reversal signal

Looking at a very straight forward, but major counter trend price action signal today, located on the AUDCHF daily chart.

Last session the price here tried to break higher above a weekly resistance level, but ultimately failed as the market denied the higher prices, and closed as a bearish rejection candle.

The rejection candle has a nice thick bearish body, thanks to the candle closing way below it’s closing price – this gives the candle a strong bearish anatomy.

We’re also dealing with a weekly resistance level which has recent proven to be a strong turning point in the market here.

The bearish rejection candle is an early warning sign of a potential reversal, and if one does occur – there is a lot of down side potential before the next major support level.

A correctional retracement entry would be the best entry scenario here. We need to tighten the stop loss to give the setup a realistic risk/reward ratio.

If we can get that pull back entry, will be looking to milk this trade for everything it is worth, and run for 1:6 reward.

Best of luck on the charts.

NZDCAD Can’t Hold Weekly Range Breakout – Selling On This Sign Of Weakness

nzdcad weekly range fake out

Got a nice bearish play on the NZDCAD market today – a pair I don’t trade very often, but this swing trade is very hard to refuse.

To build value into this trade idea, I start from the weekly chart to begin my top-down analysis.

I posted my weekly chart above, here I get the scope of the bigger picture, and where the market is likely to move on the medium to longer term.

Keeping things simple, the weekly chart is in a range. Price did manage to break out of the range top, but could not maintain the breakout.

As a result, the market collapsed back below the weekly level very quickly. This failure to break out of the range is a big sign of weakness, and suggests there is no strength left in the market.

As long as price remains on the bottom of the weekly level, I maintain a bearish bias.

Now we drill down to the daily chart to complete the trade idea…

nzdcad daily bearish signal on lower high

With the bearish bias in mind from the weekly chart, I drop down to the daily chart and watch for sell opportunities.

There is a nice bearish rejection candle which we can now build a lot of value into.

We know that the market failed to breakout of the weekly range, we can see the more exaggerated price action from that event on the daily chart. But, the daily chart is giving us even more insight, as we can see lower highs are now being printed – another sign of weakness.

The rejection candle anatomy looks healthy also, the close price is way below the open price – giving it a nice thick bearish body.

To conclude, we have bearish rejection signal coming off lower highs AND a weekly resistance level, following on after the weekly range breakout failure.

Looking to grab a pull-back entry with a limit order. Looking left, it does seem like most trading days do offer corrections up the previous candle’s range.

Best of luck on the charts.

 

Trade Idea Blown Up By NZD Interest Rate Volatility

nzdcad stop out

Unfortunately, this trade was on the wrong side of the NZD interest rate volatility as the RBNZ made a statement.

These are the type of things we can’t control in the market. Technically the setup was good, but these news events can either destroy your trade, or drive it into rapid profits.

My plan was to let the trade do it’s thing, and I already pre-defined my risk in that trade, so I know if I got stopped out, I know how much I lose.

This is why I always use a stop loss, in case of scenarios like this when you get a burst of volatility that is against you.

Nothing more to be said, the trade idea was good, it just didn’t work out – welcome to the fun world of Forex trading.

Now I sit and wait for the next high reward potential setup 🙂

 

Another Sell Signal Developed

nzdcad huge move

After being taken out of the trade via some news volatility – another sell setup developed

It basically was a repeat of the previous bearish setup I talked about above – but this one was larger.

The first setup failed (depending on where your stop was), but a second, larger sell signal at the same location really built a very strong case to short.

After that second reversal candle printed, the market dropped like a falling anvil as predicted by our previous analysis.

Sometimes the news gets in the way, sometimes it drives the trade into profit town – something out of our control, and we should not try to.

I am not going to be one of those tossers who claim to get into every move. I wasn’t able to get short here, the second rejection candle didn’t give up a retracement entry price that I was looking for.

The purpose for the follow up post on this is to show how powerful price action can be when you’re trading with the major technical levels in the market.

The conclusion is that the news can be annoying, and from time to time cost us a trade – but the techincals on the chart, like the price action analysis we did above, more often than not eventually play out.

Anyone who got short here with the technical analysis, and survived that whipsaw from the news would be in very large profit now.

The market has reached the next major weekly support now, so if you’re short – you should really consider taking profits.

Best of luck on the charts guys.