Sep 24 – Market Analysis

George’s personal notes

I have been observing the markets (but have not had enough time to post on my blog on a prompt basis – blame my French teacher!).

My GBPJPY position was stopped out yesterday at 158.40 – a profit of 81 pips on the remaining portion of my position (I had sold 8 of the 17 mini-lots at 159.85 – which ended up being 10 pips off the top thus far – there’s a bit of luck for you!!).  Thus, I have no positions remaining in the market.

Overall Market Analysis

Equity markets were fairly stable on Monday – oil and gold are erring on the lower side again – gold retracing to $1,300 and oil retracing to $106/$107.  News items coming up this week – nothing ‘major’ major  – Draghi is speaking Friday 10am.  Various MPC and/or FOMC members are speaking – and traders will be looking for some clarification on last week’s “delay of tapering” decision.

FX Market Analysis

Carrying on from the assessment I was making yesterday.  Traditional STAM analysis:

NZD leading the way (on 12); EUR, CHF, GBP (all on 10) – AUD has gained to 6 points (from Monday), CAD and USD on 4 and JPY on 0. This is from an absolute basis.  It is the AUD which seems to have some positive momentum.  How much impact would a Kiwi win in the Americas Cup have on the NZ dollar?

The 4H movements are very similar to what is happening on the W/D timeframe.

Currency pairs that are strength/weakness combinations and that have S1 setups (ignoring CAD pairs):  EURJPY, GBPJPY, CHFJPY; AUDJPY (momentum play); GBPUSD, NZDUSD, NZDJPY

Currency pairs that are strength/weakness combinations and that have S2 setups (ignoring CAD pairs): possibly AUDUSD (because AUD is gaining, even though it only 2 points more than the USD).  GBPCHF and EURNZD are also in S2 but those are strength/strength combinations – consider them as part of other trading strategies – not original STAM.

Thus I am considering 6 currency pairs from an absolute perspective and two currency pairs from a momentum perspective (involving AUD).

Looked through all 21 D charts very quickly (5-10mins).  Now looking at the charts of the 8 currency pairs mentioned above in more detail – looking for retracements:

EURJPY – looks ok on the 4H chart, currently two bullish pin bars right on the demand zone, however the daily candle looks very ugly.  Very similar story with CHFJPY.

AUDJPY – looking nice on the daily chart (bullish pin bar) and in the demand zone.  See chart above.

GBPJPY is retraced well to 157.30 and is now rallying.  Need to wait for confirmation on D chart.

GBPUSD – also looking good see below – wait for the daily candle to close.  See chart above.

NZDUSD – Strong bearish candle – so retracement is in progress, now wait for bullish price action (if any!!) – is this at all impacted the final America’s Cup race?  Same comment applies re NZDJPY.

AUDUSD – Bullish pin bar forming on D chart, with supply zone above acting as natural/logical target.

Next action step (Tue evening, 10pm):

  • GBPJPY – wait for D candle to close to see whether it constitutes bullish price action.  Same for EURJPY and CHFJPY (though less likely than GBPJPY).
  • AUDJPY, AUDUSD and GBPUSD – all looking reasonably okay – consider taking trades on these at 10pm off the daily chart.
  • NZDUSD – check 4H chart for a corn-trade setup
  • EURGBP – S2S setup (missed in earlier comments) – see chart above.

Earlier Analysis

[Note made Monday, 7.45am]

Quick update – equity markets have given up some of the gains on Friday – largely due to tapering comments from a FOMC member?  Merkel wins Germans election – still some uncertainties due to the formation of the coalition government.

My long GBPJPY position is still open – it will probably get stopped out today, due to the stop being at 158.40.

Quite a few gaps of decent last night – all of which closed!  On Sunday evening I added the NZD charts to my profile on ActiveTrades and also updated the Weekly charts on all currency pairs to check for the latest weekly momentum changes.

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