Aussie Kiwi

USD is in consolidation prior to news today. We have a busy week on the news front so a lot of data to look forward to.

Away from the US Dollar, we have picked out a cross that you might want to put on to your watch list. The Australian New Zealand Dollar is heading towards a previous resistance level and at the figure with a MACD divergence and RSI overbought. This all shows a reversal may not be far off but as we all know the market doesnt always comply with logic so what we want to wait patiently for the reversal signal or breakout. If the breakout occurs then use our EST.

Keep in mind that the XTL is blue.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Anne Chapman & Javid Shaik

Euro weakness

On Friday's forex analysis we mentioned about the fakeout possibility. We now know it was a fakeout and the market has moved to the downside. We need to try to analyze if this is just a breather or the end of a 5th wave.

The levels of support are on the chart below. Should we close below the supports then we could find further weakness. If we bounce then we could see a start of a continuation. XTL has changed to black and Osc has weakness.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

Level of resistance

The Dollar Yen has had a good ride up recently. The Dollar has gained strength and now appears to be reaching areas of the two legged extension resistance. We have shown all three areas of resistance based on the two legged extension.

Note that in addition to the resistance zones we also have both medium term and long term Ellipse tagged and MACD is diverging. Should we have a continuation towards the next level of resistance (shown by red horizontal line) then the long term trendline will need to be breached.

Although not shown on the chart, we also have a triangle forming.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

Euro momentum

As per our analysis on Wednesday we can say the Euro performed a fakeout. A drop of 400 pips since then so those that have followed our techniques have not lost out like the majority of the dumb money.

The pop and drop on the Euro Dollar does not mean it has changed trend as we are still in the range.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

Did Euro fakeout?

Euro reached new high but is this a pop and drop?

Euro cannot decide what to do even though it is desperate to continue it's uptrend. While this broke to new highs yesterday I was on the phone with someone and this breakout came up in the conversation. Most of the dumb money will buy the Euro when it broke into new territory and we have witnessed many many times that this is a fake breakout and the market reverses on the next bar.

We dont know if this is a fake out and nor do we care. If it continues the uptrend the we will get triggered into the trade with our EST. Until then while everyone else is in a panic state and analysing their chart reaching a point of paralysis of analysis, we can sit back and wait for the market to take us into our position. The current long entry point is about 1.6069 but that could change tonight.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

Joseph, Keith, Pound & Dollar

We spent the weekend in Paris on an amazing course. Five years ago we did UPW which changed our lives and this course we have completed is sure to change our lives for many years to come.

On our way back from Paris we said we have been very privelaged to have taken this journey to freedom over the last few years. This has now been further enhanced thanks to a couple of people. We would like to thank Joseph McLendon and Keith Cunningham for an outstanding weekend even if Javid's initial reaction to Joseph McLendon was "I didnt pay to see you". We owe you both a huge debt of gratitude.

On to trading, below is the daily of the Pound Australian Dollar. The chart is very visual so we shall refrain from commenting on this today except to say watch that support level.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Anne Chapman & Javid Shaik

Euro sets new highs

There can only be one story today and that is the Euro setting a new all time high yesterday after breaking out of a triple top. As mentioned previously here and also here the Euro still looks bullish.

At this point emotions can easily take over and we all pile in buying the Euro when what actually takes place immediately after you place your buy order is you witness the Euro head straight back in the opposite direction. This is what is referred to as a fake breakout as many of you who have had training from me will know.

A fake breakout is when price breaks out of a range / support / resistance etc. Following the breakout it reverses and heads back to where it came from leaving many traders upset while holding on to a loss.

Right now on the Euro we do not know if this is a fake breakout. You only have to turn on the tv and listen to speculators but we avoid listening to these so called experts. The way to filter out the fake breakout is to use our entry stop loss technique (EST). This will provide you with a good indication but it is not the holy grail in filters. It is however an excellent tool to use in situations like this one.

Resistance on Euro Dollar is 1.6000 as represented by MOB on the chart below. BOB will aid in a bullish stance here.


Chart courtesy of Advanced Get. Data provided by eSignal.

Take note of todays chart as you will see we are actually in a long term range in an upward trend. If we start breaking through supports then this chart should be used for longer term analysis including reversal points.

No update for tomorrow. Next update will be on Tuesday morning.

Forex Analysts
Javid Shaik & Anne Chapman

Dollar consolidation

Unemployment claims in the UK and CPI in the US could have a bearing on the Pound Dollar today. The Pound Dollar has entered our sell zone yesterday but not triggered.

Currently XTL is neutral but Stochastics shows oversold and we are at a fib reversal level. We love triangles and have a formation on the daily chart. Breaching this with a BOB should find support at the 1.94 zone.

Today and tomorrow will be intersting for the Sterling.


Chart courtesy of Advanced GET. Data provided by eSignal.

Forex Analysts
Javid Shaik & Anne Chapman

Persistent Euro

Anne received an email yesterday regarding the Euro Dollar on the larger time frame so below is a weekly chart analysis for you.

The chart below shows a weekly at a resistance at the 1.5900 zone. It has been 5 weeks now and has not reversed with more than 1 bear weekly candle. This shows persistence and a reluctance to change the trend. This consolidation normally shows further strength once an ESL on the BOB is applied for a trigger point. The range trading is absolutely normal after a big move up.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

G7 Meeting

G7 concerns regarding the weak Dollar may show on the markets this week but we still see further Dollar weakness in the long run.

The chart below shows the Euro Dollar consolidation on the daily so we could witness a breakout soon.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Anne Chapman & Javid Shaik

Two Legged Extension

We favour the Aussie Dollar to continue the bullish stance after it's breather but right now it is at the two legged extension point and just below the fib reversal to we have a cluster formation. We also have 15 trading bars from the previous highs and lows so we will allow you to make your own mind up on this but the entry is not until the Aussie Dollar breaks the triangle trend lines. A point to note is we do not have divergence on MACD.

The G7 meeting today will keep the markets quiet so we are not taking out any new trades.



Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

Euro Pound Triangle

The Pound Dollar bounced slightly at the support level as mentioned in yesterdays post. The events of today have been awaited eagerly and we should see some movements taking place across numerous crosses.

The Euro Dollar and Pound Dollar are on our watchlist as is the Euro Pound (big figure). However the Euro Pound has a triangle formation on the daily as shown below.


Chart courtesy of Advanced GET. Data provided by eSignal.



Double Deviation snapshot taken at 0900.

Good trading.

Forex Analysts
Anne Chapman & Javid Shaik

Pound support level

Cable had more than a 250 pip loss yesterday which was largely as a result of the weak Halifax House Price Index. The drop closed at the support zone we mentioned yesterday and if we breach that then we could see 1.94 region tagged.

The market is anticipating Thursdays events so we could see range bound activity largely across the board.

Below are the realtime DD set ups taken at 12.01am. Click the image for a larger view.



Congratulations to Yousuf for following the rules of the DD strategy and using discipline which has captured him more than 1000 pips total in numerous trades and he is still in some of those positions we believe. Well done.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

News may help Pound

Halifax House Price Index came in at -2.5% after the forecast was -0.3%. Worse than expected result and has led to a drop of the Cable.

The Pound Dollar is sailing along with no direction. FOMC minutes and Industrial Production may change that.

Sterling has support at the 1.9700 region and is currently entering the sell zone but the day has just begun. Check the sell zone confirmation again tonight or tomorrow morning.

The Interest Rate Statement on Thursday is sure to be key and it is widely expected the BoE will cut rates by 0.25%. ECB are expected to keep rates unchanged. Trichet and Bernanke will be talking on Thursday.

So, we have quite a lot of news out this week so ensure you manage any open trades.

Good trading.

Forex Analysts
Anne Chapman & Javid Shaik

Euro need to breakout

The Euro Dollar needs a breakout nefore we can really say it is looking very bullish again. That's not to say it is looking weak though. Sometimes you need to stand aside while the bulls and bears fight it out and of course the dumb money lose any profits they might have gained in the trend prior to the consolidation.

Below is a 4 hour chart showing the Euro Dollar in a triangle formation. These are great set ups but in this case we have an all time high resistance to the upside and 200MA to the downside so potential profits are a little limited. With a good entry and even better stop loss we have an opporunity once the squeeze is complete. Stochastics is telling us we are overbought but if we see a false bar then we have a set up initiated.

For those I have trained, you may notice the most recent high on the chart (almost directly above the vertical arrow on the indicator) was a reversal level and subsequenty dropped about 140 pips. If we breakout to the upside then take note of that level.


Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

NFP

We will be standing aside from today's Non Farm Payroll. Next analysis will be on Monday.

Enjoy the weekend.

Forex Analysts
Anne Chapman & Javid Shaik

Non Farm Payrolls

Speaking with a friend (a professional trader for a bank) at the game yesterday, he thinks this weeks NFP maybe to the upside and could surprise everyone. He is basing that on his companies analysts calculations. This morning we tried to see why that could be and even from a geo political stance we did not make that conclusion. However, it wont affect us and should not affect most of you reading this as NFP will not be traded. We will be out with a good friend of ours at the time.

US ISM is due out today. We are seeing typical range bound movement prior to tomorrow. This is the time most trending strategies get tired as technical are overshadowed by fundamentals.

Finaly Bernanke is admitting to a recession.....well at least recession fears. We have been harping on about this for months and with his back to the wall he has stated what we all already new. Makes you wonder if he has genuinely just figured this out and the vast majority of us already knew it then should he really be where he is. It would not be beyond the Presidents capability to remove Bernanke from his post. By the way, Bernake is talking toady as is Trichet and the Bear Stearns hearing take place so by tonight we could have some interesting news.

The Euro Dollar has found support at a T/L and 20 MA. These are the times where you wait for a breakout and use the ESL technique. The DD strategy is temporarily discontinued until next week.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman

Double Top

Good morning,

Euro managed to creep past the reversal level yesterday only to find resistance from the previous high and performed a U turn. Too early to say if this is a double top just yet.

Previously we mentioned about entering a long only after the breakout and then applying the entry stop loss technique (ESL). Well as we have not had a breakout yet then the Euro could be setting itself up for such a situation or might be oscillating. If we are doing the latter then Stochastics will aid us here. If we break the low of the Doji then apply ESL there. Friday might provide a good indication.

Good trading set ups require patience and we are going to wait for a set up to provide a high probability trading opportunity.


Chart courtesy of Advanced GET. Data provided by eSignal.

Forex Analysts
Javid Shaik & Anne Chapman