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.
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