STAM Strategy Jul 4 (Independence Day!)

EUR and USD continue to be the strongest pairs on both timeframes, and AUD and JPY the weakest.  So ideally looking to trade EURAUD, EURJPY or AUDUSD or USDJPY.

GBPCHF – I do like this one now.  The STAM environment is still S1S.  Notice the lower highs and lower highs. And each time that there is a high tail, price drops off.  On the 4H chart, price retraced sharply from the 200 MA.  Is this a valid setup?  Yes, it is in a S1S environment.  No, it is not trading strength v weakness – GBP and CHF are sitting right in the middle of the rankings on both daily and weekly time horizons.  No there has not been a significant retracement, in fact the chart as a whole is not showing a strong trend.  There is a lot of consolidation and yes, there does seem to be a channel but it’s not trending as nicely as we would like for the STAM strategy.  And there is no strong bearish PA.  Finally, even if there was a setup, it is now only a few hours to the BOE interest rate announcement and just over 24 hours to NFP. (see the chart above)

EURGBP (open position) – so far so good, today there is BOE rate decision at noon, ECB rate decision at 12.45pm and ECB press conference at 1.30pm – expect some price movement – observe what happens to the spread during the trade – how wide does it go?
EURUSD – this one could also suddenly change to S1S (like Cable) – the momentum on the weekly chart may change this week – however the two pairs are currently the strongest ones – so I don’t want to trade those against each other.
AUDUSD – still a S1S, but waiting for a big retracement – maybe the pair will rally following NFP, and we sell it after that, sometime in the middle of next week.
USDJPY – this pair has rallied a lot, we now need to wait for US dollar to weaken again before it converts into a S2S environment.
AUDJPY – continues in S2S environment, but is still effectively trading sideways. No setup.

Action: No new orders into the market. Keep an eye on reaction to the BOE and ECB meetings today. Today the analysis took me just around 30-45 minutes. Nice!

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