Technical Templates

[Se7en]

A bit of a see-saw ride overnight as the election nail biter finally got resolved.
Commodity currencies took a bit of a rollercoaster, but as we head out of Asia into Europe they're back in vogue with NZD & AUD leading the way followed closely by GBP & EURO.

Unsurprisingly, the risk off pairing of YEN & $US are the laggards this morning, so the pullback/entry pairings to focus on are self explanatory.

[speedbump]

Following the recent post election knee-jerk price action I thought it might be opportune to re-assess where we are on the cycle process using a pair that has been discussed during the past 48 hours in order to keep it current.
I know this is how the other guys here update/calibrate the scenario each session/day, & I think it would be beneficial for the newer members to see it unfold too.

I use a combination of 4H & 1H references as my primary view & the 15m to help me gauge the potential holding/flip zones once the hourly cycle is established.
The 15m swing cycle areas are usually where I place stop loss exits when trading intraday positions & trailing stops if I'm trying to establish a core position.
It's nothing more complex or in-depth than that, just the usual simple identification process that has been constantly advised & presented by the more experienced guys here.

So, to that end I have my 4H clearly displaying the most recent cycle, violation points & core structural bias levels.
And I have my 15m with that 66.35 area highlighted previously by shona & kyle as the axis level that aud/jpy really needs to consolidate for me to become enthused about tracking this pair higher into the w/end.
If price drops through the circled zone I will stand aside & re-assess, watching closely to see what occurs if it happens to continue back towards the 4H higher low zone at the 66.0 round number.

In other words, the bias remains bullish for me & I'm seeking more pullback long opportunities via my 15m frame using the 2 common trigger options popular on the thread which are: stoch hooks and/or 1-2-3 continuation pullback entries.

[hawkmoon]

Nice illustrations lately of the bias & cycle structures. Essential to know where price is in relation to the wider picture if we are to maintain complete control of our objectives & our risk.

I'm sure everyone is aware, but just to reiterate....it wouldn't be at all surprising to witness some of these moves unwind today from these aggressive shifts on the back of the US election wave.
Conditions remain light & thin into early London trade & if impetus wanes into UK lunch period, the early bird speculators will take profits & go flat until they can get a feel for the NY risk appetite.

speedbump is spot on...if you're already onboard, then managing entries & positions via the micro timeframe cycles is the most sensible option today.

[round number]

I'm sure everyone is aware, but just to reiterate....it wouldn't be at all surprising to witness some of these moves unwind today from these aggressive shifts on the back of the US election wave.

Not least because the price action during Tokyo & early Frankfurt has stretched most of these pairs to the top end of their average daily range boundaries.

I was looking for another bite of EUR/CAD short and/or CAD/CHF long, but the former especially has virtually maxed out on it's range limit.
There's still some juice left before they hit their weekly range barriers, so I'll sit wait for a bit more of a pullback first before considering re-engaging.
Plenty of time to see how the land lies.

[round number]

....it wouldn't be at all surprising to witness some of these moves unwind today from these aggressive shifts on the back of the US election wave.
Conditions remain light & thin into early London trade & if impetus wanes into UK lunch period, the early bird speculators will take profits & go flat until they can get a feel for the NY risk appetite.

That was sensible, timely advice hawkmoon & was indeed the tale of the tape today.

I was looking for another bite of EUR/CAD short and/or CAD/CHF long, but the former especially has virtually maxed out on it's range limit.
There's still some juice left before they hit their weekly range barriers, so I'll sit wait for a bit more of a pullback first before considering re-engaging.

I note price is currently pulling back on these two as New York kicks into action so I'll be monitoring closely for indications of another directional bias leg if i get the nod.

Meanwhile, the area speedbump noted on his earlier nzd/yen analysis is now in full view.
There is a very distinguishable upper & lower range currently in play where we're now able to plot the next cycle from.
A case of waiting to see which end will begin to print either higher lows back up in sync with dominant 4 hour bias, or violate the uptick, pullback & begin to swing down in the other direction (through 65.85).

By identifying the logical cycles & nearest high/low barriers, we're able to patiently sit & wait for the dominant flows & pressure to reveal itself.
No need to front run or anticipate anything.
Just let the level dictate the next potential leg either up or down based on the primary timeframe cycle of choice.

[jack mason]

As Joe remarked prior to the european shift on Friday, Dollar, Cad & Yen were strong v/s a choice of currencies & have established bias swing highs/lows into last week's close that we can use as markers heading into next week.

A couple of examples of that price action & the corresponding levels/zones with background technicals to take note of as we approach the open.
Focusing on the usual strong/weak combinations & matching it up alongside the normal background framework & bias oriented structure will ensure we're continuing to lean towards pairs offering lower risk/higher probability odds.

2 more accurate price based heads up into this weeks pre & post election phase.
I've circled both charts to highlight where we were when goldtop ticked the next level reaction zones in his post from Sunday.
eur/cad bounced the first contact level @ 2650 today & is currently holding the bearish tone whilst it trades underneath 2750 ahead of the 2800 long/short axis figure.

As suggested, 2890 was the barrier to further eur/usd bullish momentum & the longer it spends south of 1.28 the more intense the pressure will be for a trip to goldtop's lower level projections.

Just play the continuation cycles as they set up if acceptable risk is available & the dominant flows will keep you onside until the last LH or HL step gets violated.

[jcpfx]

Good Morning gentlemen,

yesterday was quite a roller coaster, and I must say that I got more out of the Dax than from FX. This morning the situation on the Euro is as such:



I think the chop zone today is 1.2750-1.2790 and will be looking for shorts, in line with trend and with the bearish outside bar from yesterday, at 1.2790/daily pivot OR on a break & hold below 1.2750.

Market diddn't get much positivity from the Greek election, and we'll see today what the Chinese change of guard has in store for cyclical fx and risk sentiment. There is also BoE and ECB today, so caution is a must.

May the pips be with you!

[Sarah Foster]

I think the chop zone today is 1.2750-1.2790 and will be looking for shorts, in line with trend and with the bearish outside bar from yesterday, at 1.2790/daily pivot OR on a break & hold below 1.2750.

Agreed.
That area (740-780) is today's tokyo range & 736 yesterday's low, & the market loves targeting these typical levels.
There will be (sell) stops building underneath this area too, so that will probably trigger some momentum providing bids aren't laying in abundance.

Swiss is trying hard to lead the way this morning, with Yen taking a back seat.
Everything else appears to be stable & uninteresting so far today.

[jcpfx]

I think the chop zone today is 1.2750-1.2790 and will be looking for shorts, in line with trend and with the bearish outside bar from yesterday, at 1.2790/daily pivot OR on a break & hold below 1.2750.

Agreed.
That area (740-780) is today's tokyo range & 736 yesterday's low, & the market loves targeting these typical levels.
There will be (sell) stops building underneath this area too, so that will probably trigger some momentum providing bids aren't laying in abundance.

And here is the trade:



Entered 1/2 position on hold below lows, knowing that the chance of a retrace is high BUT needed to get a foot in the water in case it just headed south. Entered second half on the 5Min pin off 1.2735. Then we get a stumble down to 1.2718 but frankly I was hoping for more as the risk/reward was really BAD... so i entered the second position on the 5Min pin off 1.2750 which was the real test and fib confluence. Price stumbled, and then upon the initial remarks of Mr. Draghi we visited the lows again.

Now comes my lack of commom sense: i always say that it's not a good idea to overextend your stay on day highs or lows on a normal day...and today we also had ECB...so it was nuts to hold further. And the market made me pay for the mistake.

Would really like to hear some comments on this trade, and I hope you got more out of this than me...

[Sarah Foster]

Would really like to hear some comments on this trade

and I hope you got more out of this than me...

Although I also executed a short bet this morning, it blew out.

I took the first pullback out of the Tokyo & yesterday's low region this morning at 2730 & got stopped out an hour later as price pinged back inside the range lows.
That was the first indication there were light stops (& indeed bids) underneath that low area.

When I personally trade from a fast timeframe such as 5m I want to see instant cycle rotation, especially if the area is rumoured to hold buy or sell stops.
As there was no further cyclical short sequence on the 5m after price moved back inside, i stayed flat & have remained so for the rest of today on that pair.

Experience tells me (as do the comments from these guys) that if the first trip out of a defined range fails to kick on immediately and/or doesn't uncover stop activity attracting instant participation, then the odds of a follow through are very limited for that session.

As you say, we had post-rates ECB comments & they are usually key market focal points.
We've also negotiated a whippy US election phase & volumes are still very light on Euro, Sterling & Yen this week.

I won't (as won't most of the regulars) trigger bets whilst price is working inside a defined range such as today's Tokyo session high-low.
As i said above, there was no determinable cycle rotation to get hold of once price moved back inside the range after the initial pop.
Therefore, if there's no clearly identifiable cycle to climb onto, the risk is high & the probability odds of follow through are low.