Technical Templates

[Carll]

jjay received a pm asking for clarification on what spotlight zones were on the radar for next week's eur/usd.
To whoever it was, he's not around until early November so passed it across for me to address.

Unsurprisingly, we've been buyers on dips in line with technical & short term fundamentals & remain so until we get the usual clarification that a strong bias is running out of gas & that will reveal itself by exhaustive (topping) behavior primarily signalling a failure to break to new highs & corresponding lower highs on at least a 60 min chart view.

The key level for me will be the reluctance to support & hold the 1.3700 area, which represents the last technically relevant higher low on this leg up on the 4 hour chart.

We got quite a bit of potentially high impact $US data out next week, including PPI, CPI, Tic & home sales output, all of which could spark each-way spikes dependant upon the primary theme of european debt concerns that the market (& the recent G20 meeting) is still very much focusing on.

We certainly remain dip buyers to pullback levels on & around the highlighted 60 min support zones & you can use the dual 60m/15m and/or 60m/5m stochastic hook triggers as a buffer to get you aboard providing you can calibrate acceptable risk odds with decent available average range coverage.

I hope the info offers you food for thought & helps with your own technical assessment of the likely support/resistence zones.

The 4 hour highlights 1st & 2nd line upper (potential) reaction zones on continued bullish momentum.



60m offers closer inspection of the key support levels that will need to attract bids on drops to test the appetite for a further leg up in bullish price action.

[Ray_1]

From today movement, it seem that the market is still waiting for the details of the bank plan. Without clear direction coming out, I assume there won't be too much Big bets coming into the market this week. EURUSD has just clear 1.3800, the next level of support will most likely be 1.7 to 1,3684 as carll has indicated.

[goldtop]

Yeah, a definite 'risk-off' tone enveloped the whole market after the early stocks/euro uplift Ray.

Inability to confidently break last weeks highs beyond 1.3900 this moring in europe didn't really bode well & prices have drifted off in profit taking, covering the average days range (currently 175 pips) almost to the pip & finding support just shy of that 1.3700 zone.

I also agree with Carll - that level is the first real indicator of traders willingness to keep the upside momentum bouyant.
I'm happy to continue going long above 1.37, but I don't really want to be seeing a lower top being put in or weak, wishy washy price action below 1.39.
They need to keep this leg intact otherwise it could hit the skids very quickly from current levels.

[Carll]

Unsurprisingly, we've been buyers on dips in line with technical & short term fundamentals & remain so until we get the usual clarification that a strong bias is running out of gas.

The key level for me will be the 1.3700 area, which represents the last technically relevant higher low on this leg up on the 4 hour chart.

We certainly remain dip buyers to pullback levels on & around the highlighted 60 min support zones & you can use the dual 60m/15m and/or 60m/5m stochastic hook triggers as a buffer to get you aboard providing you can calibrate acceptable risk odds with decent available average range coverage.

And the 1.37 zone remained solidly well bid, closing above all through last week.
Two very nice 60min bullish divergences shining a spotlight on low risk/higher probablity 5&15min entry opportunities in sync with the continuing bullish flows & bias on this pair.

This weekends eurozone debt package conference will focus the markets attention during the early week trading activity, & any further relief news out of those discussions could very well pitch prices much higher into the next channel of supply as annotated in last weeks chart presentation.
So buyers of dips received a nice end of week bonus with the 'risk focus' pairs of which eur/usd is one, closing strongly into the highs of the week.

It still retains a long bias until the near-term support levels (clearly visible via the 60 min chart) give way & lower highs replace the higher lows supporting the current months bullish uptick.

[Joe Whitehorse]

This weekends eurozone debt package conference will focus the markets attention during the early week trading activity, & any further relief news out of those discussions could very well pitch prices much higher into the next channel of supply as annotated in last weeks chart presentation.

It still retains a long bias until the near-term support levels (clearly visible via the 60 min chart) give way & lower highs replace the higher lows supporting the current months bullish uptick.

As you quite rightly pointed out, maintaining a long bias into the new week off that strong bullish close last Friday paid very handsome dividends.
It's now closed out back into your previously highlighted s&r zone of 4150 & that visible lower technical defense zone at the 1.39-3950 will now form a clear magnet for stops (& bids) on any counter bias move back.

The next upper targets for the euro bulls are very bold on the radar & I certainly wouldn't rule out any attempt to extend this leg for a concerted push to test out the offers up beyond 1.4280 to the summer highs of 1.45, but as ever we'll have to wait for the appropriate technical signals to guide the way. If not, then patience will be the usual order of the day to ascertain whether this bullish leg has completley & fully exhausted.


Everyone & his dog has been screaming for a resumption of shorts on this pair for weeks given all the negative background issues surrounding the eurozone region, but you guys have continually followed the correct course of drawing on the current fundamental themes/risk attitude & marrying that behavior up with the obvious technical signals, which has resulted in an accurate & profitable course of action.

Reducing trading costs & maximizing profit potential is one of the core objectives to generating long term success when trading a well managed discretionary model, especially when trading from the retail angle, & by maintaining discipline & following a logical, solid analysis pattern that objective is very much achievable as is proven here time after time.

This thread has & continues to attract mature, accountable individuals who contribute some excellent material & is obviously popular judging by the impressive thread views.
Keep it up guys. By helping each other see the bigger picture, you're ensuring you consistently cover your bases!

[spotfx]

The next upper targets for the euro bulls are very bold on the radar & I certainly wouldn't rule out any attempt to extend this leg for a concerted push to test out the offers up beyond 1.4280 to the summer highs of 1.45, but as ever we'll have to wait for the appropriate technical signals to guide the way. If not, then patience will be the usual order of the day to ascertain whether this bullish leg has completley & fully exhausted.

Worth keeping tabs on the risk barometers as earnings season picks up a head of steam.
With regard to EURUSD influence, I got a couple of headline support regions ticked off on both the S&P's & Dax. Traders will be eyeballing those potential bid zones if we get an orderly retreat from current levels, especially if the daily intra-session news & data output doesn't freak out the volatility too much.

Should risk remain positive & longs continue to kick in via shallow pullbacks then those supports won't be threatened for some while yet. However, if we slip into a period of risk averse trade those levels will surely shine a light on your lower support area.

[jack mason]

The majors have been quite chaotic recently given the attention & intense focus of the debt & bailout emphasis heaped upon the market from the central european governments, & I recall Jocelyn & Manny discussing potential opportunities in the cross pairs that would perhaps yield keener profit (& reduced risk) revenues into 4th quarter.

This was one of the cross pairs they highlighted in the room during mid October as a likely candidate to keep close tabs on as it descended down to an area of prior reaction during the summer. One of the reasons they gave for favoring Sterling was the fact it was the most resiliant of the majors during these times of uncertainty & had received very positive nods of approval from the ratings agencies regarding it's currency strength status, holding onto & maintaining it's triple A badge.

Like an idiot, I failed to latch onto the trade & didn't place the long bet off the double bottom move through 1.5030 as they did, but it bore all the hallmarks of a classic combination strategies/technical templates structural move.

Positive fundamentals (favoring the Sterling over it's nearest trading neighbors), move into a solid area of previous support/demand, good confirmation from hourly chart technicals (higher low/stochastic extreme reading/double bottom support from higher timeframe) & offered clear, acceptable risk placement for a higher potential entry bet.




I'm (as they are) now watching this latest development to see how it reacts to the current levels, with a view to picking up another long on a positive move back towards this localized top at 1.5800
Hopefully I'm not too late to the party & haven't missed the thick end of the move.
Providing I can obtain good risk placement on the bet I'll grab a ride to check any further upside potential in this pair.

There are 2 clear support zones to mark up as guides for further renewed bids on a continued drop from friday's closing level.

[Carll]

One of the reasons they gave for favoring Sterling was the fact it was the most resiliant of the majors during these times of uncertainty & had received very positive nods of approval from the ratings agencies regarding it's currency strength status, holding onto & maintaining it's triple A badge.

The other (more pertinent) reason for focusing on that particular pair at that specific support zone Jack was also the fact traders were anticipating/expecting a .25% rate reduction on November 1 by the Aussie Central Bank.

Add that into the mix alongside the markets confidence in the UK's handling of the current debt crisis, & it supports the justification for betting long on that pair when matched with the reliable technical signals so consistently posted up on here.

[goldtop]

I'm (as they are) now watching this latest development to see how it reacts to the current levels, with a view to picking up another long on a positive move back towards this localized top at 1.5800

Providing I can obtain good risk placement on the bet I'll grab a ride to check any further upside potential in this pair.
There are 2 clear support zones to mark up as guides for further renewed bids on a continued drop from friday's closing level.

I assume you've legged back into one of these 2 pullback long opportunities this week Jack?

With Aussie getting battered (along with the other high profile instruments) in this weeks risk averse trade, it's offering up some pretty keen low risk entries, including that gbp/aud pair.

Nice clean move down on eur/gbp too on Monday off last weeks highs in line with the current trend. A bit of a carthorse this pair, but it'll plod along if you give it a loose rein.

[jack mason]

I took a 15 minute stochastic hook entry on Monday morning off 5540 Dean & scaled two thirds out yesterday @5640.
It was chopping around a bit as New York opened & decided to take some off as a precaution. Got stopped out on the remaining third at break even into yesterday's London close, but I'm happy with the end result considering the volatile price action so far this week.

I saw Carll's weekend analysis on the eur/gbp pair highlighting that .8630-50 zone but didn't trade it. It's not a pair I usually get too involved with to be honest, mainly due it's low average range coverage, but it certainly was a good call (as usual).

I considered a continuation short on Cable yesterday when it pulled back in early London trade, but let it go without me in the end.
I'll keep a watch on the eur/usd, gbp/usd & aus/usd & probably pick up a pullback short into end of week providing I can get in on one of these lower risk pullback hook entries