WATCHLIST NZD/USD (aug 27)

Latest Update : Friday, August 31 2012
Note: Before reading this update, I suggest to read below previous blogs for you to understand and follow the current findings

Observation: Taking the cue from yesterday, I was able to take 190 pips for profit taking and remained some of my smaller positions today. Now, currently, This pair is bouncing from its daily 200 EMA @ .7984.
I believe the traders should be careful in trading this pair.
If you don't have any positions, I suggest to wait for the support to break. In that manner, I believe that you will have better clear of risk management by putting your stop loss above the support when it breaks

I'll be discussing this step by step.Lets start with the 1 hour chart.

We start from the June 2012. We have to respect the Bulls. There are traders who are bullish with this pair for a longer time period so I believe they will look for opportunities to enter this pair.
In this regard, I believe the 1st support for short term traders will be at FIB level of 38.2% @ .79352 

 I would like to highlight the 50% Fib level. There are 4 confirmation that heavy buying happens in this level.  @.75451.

Now We zoom further the chart.

Now, as per yesterdays entry, I was able to discuss to you regarding the breakouts.
I will now discuss the ff indicators

1. 50/200 ema are still broken.
2.3 months support(green line) broken
3.double top support (maroon line): Broken
4. Macd below 0 : continuous down trend

for short term traders. Entry near the 50 EMA for 1 hour chart can be a good entry for short while putting the stop loss above the double top support(turned resistance)as possible area.

Next will be the 4 hour chart

We are waiting for the 50/200 ema cross over. Looking at the macd with a negative divergence, This proves that this pair is going lower basing on the 4 hour chart.
Shorting the pair now with at stop loss above the 200 ema can give you a good trade aiming for a 200 Pips range.

Last will be the daily chart.

Where are we now?  
 I believe that this is still a 3 year BULL chart. So be careful on your placements and always have a stop loss for this pair can turn around a move higher.
We have to maintain the macd divergence. Its currently heading below 0. It may suggest a bigger retracement if it continues.

In summary
For the BEARS:
What do I want to see? Ans: I want to see a break out of the 200 EMA @ .79847
I also want to see the cross over of 50/200 EMA for daily chart to give us another 190 pips  lower.

For the Bulls:
I want to see a hold @ .7702 area.
I want to see MACD in positive momentum.
I want to see a breakout.

If you have any questions, suggestion and comments, feel free to contact me using this blog site.













Update for August 31,2012

Observation: The price continues to go lower after break the support yesterday @ .80400. Yesterday support became major resistance and now heading for a big correction.
Due to high overnight charges, I gained some charges due to overnight interest rates. 

 The Red horizontal line was the support which turned resistance. In this 1 hour chart, 50day ema also confirmed the resistance
Macd below 0 and consolidating in that area which suggest a long downturn of the trade.

Breaking not 1 but 2 supports. 
Observing the 3 month support. It broke the major support which tumbles down this pair. Adding data from the chart above, We see that the market did not respect the supports given and instead confirmed 4 indicators at 1 hour chart and now for the 4 hour chart, We see the ff indicators broken.
1. MACD: Below zero
2. 50 and 200 EMA Broken
3.1st support : .80453 broken
4. Major 3 months support .80517 broken

For this Timetable:  the 200 - 300 pips target is feasible with a ratio of 1:7 for my ratings.

 For the daily chart, 50 day ema was broken yesterday. now we have daily resistance 
of .80272 range.
 The last support of this pair will be the 200 ema at .79950. If we break this, we are expecting a sell off either tomorrow taking a cue from QU3 or today if the volume continues to drop.

Update: AUGUST 30,2012 

Strategy: Im currently looking at the resistance. and over all direction of the market. Looking at the trend in long term and giving consideration to the resistance. I believe it is very crucial that this resistance will be maintained. IF it breaks, I believe a big break out can peirce this pair.


 A descending triangle pattern appeared which may give way for a big correction. Breaking the resistance around  .8180 will give you a break out and may suggest to continue the trend.

What bothers me?: Looking at the USD index. people are suggesting that they are planning to shift to dollars after the QE3.
Technically, USD at the moment is in downtrend channel.

a good opprtunity Entry:
If market decides to break the  .80643 level. we can add more in this position. Placing our stop loss above the 50 ema targeting a 250 pips.I believe that aiming lower can give a big rebound to 38.2%  - 50% retracement before going lower.
2 opportunites:
1. Short in break out for 250 target with 40 pips stop loss
2. Long position on support around .78093 with  30-40 pips stop loss aiming for the 38.2 retracement.

A shorter term pattern showing a .80433 pips support.
Break that, we have a new entry point.


Trade Strategy: MACD Divergence +trend +Support
Trade style: 1 hour Trade test
Uptrend Channel: Increase target price every tick you hold the position


                                                        Exhibit 1.1     I hour chart
I was able to buy this pair due to the MACD Divergence and the bottom pattern of the pair.
I placed the Stop loss below the bottom pattern and secured the positon.
I didnt place another position and saved the last lot for recovery trade or other pair short term objectives.


                                               Exhibit 1.2     4 hour chart

I decided to keep the stop loss tight due to the 4 hour chart position in sell momentum.
The macd is still above zero line which suggest a positive uptrend at the moment unless the macd going below 0.
I still remain in a bullish trade in this position for short term.

Stop loss are based on 1 hour chart to have a tight position for this pair.



Converting the trade to 4 hour chart:



                                                 Exhibit 1.3     1 dayr chart
Im thinking to convert the trade to 4 hour strategy if i see inidcators and good signal entries for the 1day chart.
If the support for 4 hour is established, then the 1 hour strategy will be converted to 4 hour.

 August 28,2012 Update 

Reversing my trade for short term but still bullish.

I believe lots of people will still wonder why am I posting a bullish sign in this pair. I main reason will be the chart.


In this chart. we see that the major support still not breaking and currently testing for confirmation.
 The 50/200 ema are heading for the support for confirmation of the uptrend. Once confirmed. I believe that people will still continue to be bullish in the long run.



Piercing a new high. I believe that this pair is currently getting more strength. We have to see a major correction to confirm that this is a descending triangle which is a bearish signal.



Im currently waiting for a breakout in the 200 EMA for the 4 hour chart before heavy correction comes in.


For the short term. I believe we can short the position but we worry of the elliot wave.We may be in the middle of the 3rd wave which can be the strongest wave.

Summary:
 Short the position with a tight stop loss
 Always remember that this is still an uptrend in general. Correction will last for days and weeks but uptrends last for years.
For carry traders, be cautious on your rollover interest. So having a short position for 3 to 5 months might give you higher risk.
You may target a short term Short selling in 100 pips with a 300- 350 target.

WATCHLIST CAD/JPY (aug 27)

Update for August 31,2012.

Observation: The Pair continues to hold the 6 days support going for a uptrend on the 1 hour chart.

Due to my portfolio beyond the positions allowed, I decided to close 1 position and left 1 position open.

1 hour chart

Observing the 1 hour chart, We are currently monitoring the positions. 2 EMA namely the 50/200 ema serves as resistance for the short term but as we observed, it has a possibility for a cross.

MACD playing above and below the 0. For short term, I believe this is a good set up for the pair with a very tight stop loss.

4 hour chart

Now, The story changes when we compare the 1 hour chart with the 4 hour chart.

MACD is barely above the 0 Line and now testing the 50 day EMA.

For a longer time period of trade, I believe I want to see a second candle stick for confirmation before entering this pair. We are still waiting if it can hold support. If it does, this will be the double confirmation of the trend which gives a higher chances of price appreciating higher. For me, Im currently having a very tight stop loss since yesterday for this pair.

1 day chart

Now, The reason why i place Tight set up is due to this pair. The RED LINE shows the 4 year resistance which has 3 confirmations(check yesterdays blog). It respected this resistance 3 times which gives a strong indication that the pair will respect this.

 At the moment, we have a 150 target price is current feasible but it shows higher risk than the NZD/USD trade. At the moment I open this pair to break even the overnight rates of the NZD/USD trade that I posted yesterday.

In summary for this pair:

2 charts gives good entries for the pair but looking for the long term , we see that this will have a downside.

 I believe that this trade has bigger risk but it also gives tight stop loss area which gives a high Risk Reward ratio. : 1:8 level. As they say, No risk means no rewards.

If you want to enter this pair, I believe you have to have a tight Stop loss and maintain a high reward due to the risk profile of this pair.

Update : AUGUST 30,2012

I was able to zoom out and scan the over all direction of the pair. I will start in 2007 zooming out then zooming closer to see the whole trend of the market.


I was ablet to scan and see the 2008 peak and connecting to current price. I was able to observe that the market respects the 2008 peak and the march 19, 2012 price. It happened again to august 21,2012 giving a (3rd confirmation) to this pair.


My objective is still in place for shorter term which gives a short 1: 3 ratio with a possible 120 pips entry but with a very tight stop loss.



Zooming closer to the chart. We are still betting on a short term crossover of 50/200 ema crossover that can boost this pair.
Im still considering the OIL price hike which gives canadian economy a boost due to their resources in oil for short term.
In this regard, im still keeping a tight stop loss for this pair.


Zooming for the 4 hour chart. I see a major resistance of this pair at 80.030. MACD shows good divergence which is currently crossing above 0 level.Maintain the trend line, we will still continue trading this pair higher.
support: 79.25-79.30 for this pair.
Breaking this will suggest that this pair will now proceed in selling the pair.


the 1 hour shows a clearer picture of this pair . Giving a 3 confirmations. Now the aim is to break its current resitance so the pair can move higher and give us a 150 pips profit for short term.


Update: Due to confirmation of reversal and break out of 50 ema moving average, I reveresed the trade. Making the 2 50/200 ema as resistance.
 I decided to hedege the position due to 3 timeframes shows different indicators.

 I place the stop loss to their brake out points to minimize


 In this chart, the criteria is that the resistance was in placed. Momentum in Sell


In contrary, This chart shows MACD divergence going for reversal.



Zooming in 1 hr chart, MACD turns above 0 and trend started to go higher.

As of London session: my short position was booted out while my long position continued. Thus minimizing the loss that was able to do couple of mins ago.


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Trade Strategy: Fundamental + trend + support
Strategy:5 day term

Target Price : Fixed

                                            Exhibit  1.1 1 hour Chart
In this chart, I was able to enter slowly due to the cleared support of the 50 day EMA. I decided to use the 1 hour chart to identify my 60- 80 pips stop loss and find an immediate major support that can minize my risk.
I was able to find a 79 support which gives me less exposure. 4 hour chart indicators will still be in effect of my trade of this pair.


                                               Exhibit 1.2 4 hour chart

Looking at the MACD. below the 0 line. I was not 100% convinced in this trade.I believe that there is a big risk that it can correct lower but because of a fundamental report regarding an explotion of Oil refinery that can shoot the oil up, I believe putting fundamental factors in this trade allowed me to start buying. Starting at 20% of the total position trade.
Observing the 50/200 ema crossover which is a bullish factor, I believe it can still move higher.

 
                                                Exhibit 1.3 1 day chart

Even though there are some technical factors already in placed. I decided to be conservative in this approach.
Looking at the over all trend via the 1 day chart, I see that the 50/200 ema are still in bearish signal. Even though the price stands above the 2 moving average, A tight  STP below the 50 EMA is still safe for this trade.

Summary:

 1.I'll be trading this in a much more longer time period and basing everything on the 4 hour chart.
 2. Entering slowly could give you the feel of the market where the price direction and where it wants to go for the week.
   Unless there are higher time period technical inidactors verification. I believe a conservative approach is applicable.
3. I consider the fundamental factors for this trade.

WATCHLIST USD/CAD (aug 27)

Last Update: for this Month of AUGUST

Note: before reading the updates, Please kindly read the previous entries to understand the whole blog.

Observation: I believe 2 patterns already appeared.

1. Descending Triangle in a downtrend. Which suggest a reversal
2. Bouncing last 8/29.

I was short with this pair but after confirming the bounce. I closed the trade with a loss and re opened the trade for a quick 30 pips profit to compensate the loss.

I'm getting out of this trade until further confirmation and if we see already a clear trend.
This is still high risk due to the general trend is a downtrend.

If you have any questions,comments and suggestions Feel free to leave a message in the "ask the trader button" .



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I will now discuss the 2 views of the 1 hour chart.

1st view: THE OVERVIEW:


Observation: The market started to show its collors and showed that it want to confirm the reversal Pattern.

Update August 31,2012

1 hour chart overview

The overview of the 1 hour chart shows the descending triangle in a downtrend. It is 1 on the reversal patterns and may show that the market  bottomed up and preparing for a reversal. A very scary image for the shorts. The question is .. WHEN?

1 hour chart Zoom for 6 days

 the second view shows 2 resistance.
1. The 4 day resitance (short term)
2. Previous 1 week support turned resistance

I believe this is the early resistance we can establish for this pair.

For Weekly traders like me, We considering that we only have 2 days remaining, We have to respect the immediate resistance.

the 4 hour chart may short that this pair wants to consolidate before heading higher price. It needs to take out all the shorts first before entering another face of reversal.

1 day chart

Looking at the bigger picture. I believe it is looking to establish its support for a 1 month consolidation stage. We remain the support at .98345. breaking that will give us a clear view where it wants to go, which is lower. But for now. keep your Stop loss tight.

Update: August 30,2012

Market Current in Consolidation stage waiting for the QE3.
Current Market Indicators: 50/200 ema still in sell pressure.


In this daily chart, Level .98345 is the main support. Breaking this will give another window for shorting this pair. with stop loss above the current support around .98345 level

The 4 hour chart shows tha clear downward channel> MACD is below 0 which confirms the nes direction of the market based on the 4 hour chart. 1st stop loss is at 200 ema and 2nd stp is above the 50 ema.



Zooming closer to the trade. the 1 hour chart shows NEGATIVE divergence and a bearish 50/200 ema cross which gives more negative pressure to the pair.

Summary: FOR AUGUST 30,2012
 We continue to be light with our position in this pair. We are currently looking at the QE3 report this friday.
 We also monitor the dollar index to see the whole trend of the currency against all currencies.


llll


Trade Strategy: Fundamental + Break down+ 50/200 ema breakdown

Fundamental: People are expecting a negative QE3 from Bernanke on friday.
Technical: USD Index starting to form a descending triangle and showing weakness in momentum.
Trade: 4 hour chart.
Exit Plan: 1hr MACD buy signal.
               2. Target Price

In this chart, It shows Clearly that the trend is down and the 50/200 ema is already crossed for daily. Which suggest that the down trend may continue for a  long er time period.

The 50 day ema serves as the resistance to the trend. The MACD also indicates a negative trade.

the Breakout of the triangle confirms the position of the trade.

Summary:
1.All EMA is in favor of SELL Signal
2. all Momentum in negative territory
3. Major Trend In downward position.