AUg 8 – Market Analysis

Analysis was done 2-3pm on Thursday but couldn’t publish at that time.

General comments – My Trading

  • I really feel that I could be spending more time on the markets – to get a better feel of the ‘pulse’, of what is going on.
  • Thus far my results are not good.  With the benefit of hindsight, I have clearly made some decisions that showed that I did not trade well.  I also am not putting in enough chart shots.  This is partly because it is a hassle to get them onto WordPress. I will consider putting more chart snapshots into MS-Word instead.

General comments – Markets

  • Equity Markets – rallying a little bit – Nikkei fell – presumably this is to do with the overnight Japanese news? – Current Account figures and BOJ Monetary policy statement
  • FX Markets general – Momentum on GBP is turning to bullish across the board (still) even against the Yen.  Yen has been continues to be very strong.
  • Things are evening out on the matrix.  Three currencies (GBP, USD and JPY) are now in the middle.  EUR and CHF are still the strongest and AUD still the weakest.  JPY is quickly gaining points.

Specific analysis

Thus there are only two potential strength/weakness combinations – EURAUD and AUDCHF.  AUDCHF – the trade is still open.  The trade was in profit until the AUD employment data that came out overnight – it got as low as 8260 (around 70 pips profit, with stop of 60 pips) – should I have shifted the stop loss at this point – well I was going for a much bigger target.  Now it looks to be making its way toward the stop at 8397. EURAUD – this is the pair that I impatiently traded yesterday – I entered on the basis of a corn-trade setup – which, once the 4H candle completed, was not a valid corn trade setup.  The pair is still declining heavily – there is no sign of bullish price action.  Thus no trade setup on this pair.


  • There is one other pair that I would like to consider and that is AUDJPY – JPY is showing a lot of momentum right now – the only currency that it is losing against is AUD.  The next 4H candle is closing in about 30 minutes.  Let’s have another look then.  Why am I not willing to trade JPY against another pair?  Such as GBP or USD?  Is there a pullback on those?  No there is not.  Okay, here’s why I will not put on a trade – technically it not a strength/weakness – it is on the daily matrix (strongest v weakest).  However Yen currently has the strongest momentum and AUD the weakest. 
  • What’s the price action that I like? On the 4H chart, price has put in two candles with long up wicks, and it was never able to close above the fast MA.  The next candle indicates that the buying pressure is running out of steam.  The next candle (particularly if price goes a little lower still) confirms this.  Is a reversal imminent?
  • On the downside – RBA monetary policy statement is in 12 hours.  Price is likely to consolidate before then.  I could put on the trade and take if off if it has not reached the target by 10pm (4.5 hours prior to the announcement) – we would be targeting previous low levels of 8670 (just 55 pips away).  I would set the stop at 8770 (45 pips away). 
  • It all seems a little tight and uncertain – I have already had 3 trades this week.  Let’s pass on this one, but of course I can see what would have happened.
  • With the benefit of hindsight – this trade would have run directly into the stop within a few hours of entry.



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