Hello Traders!
Welcome back for this week’s FX Analysis.
For the new readers, this week you’ll notice “[?]” in my forecasts in the excel spreadsheet. The “[?]” indicates that I’m unsure about the directionality in the markets due to where the current closing price is. Based on the lines that I’ve drawn, all the pairs this week are at critical levels, which depending if they break or hold will determine what will happen.
I’ve learned from experience that it’s best not to bother forecasting 50/50 directionality, it’s better just to state outright that I’m unsure. However, I do still provide where I “think” price will go, which is usually based on the previous week’s forecast. But since I’m unsure, I don’t count these forecasts as wins or losses. So when you look at the excel spreadsheet, you’ll notice a dash in place of the result for this week’s forecast. Last week’s forecast was overall good though, got 3 out of 4 right. EUR/USD is the only one that went opposite and for reasons I don’t understand.
Lastly, I disclosed last week that I was holding short positions on EUR/USD, those trades ended up at a small profit. Despite having 3 out of 4 forecasts coming true, I somehow managed to pick the one that was wrong to trade. As such, Tuesday was a bad day for me, I missed my trade entries while I watched EUR/USD go up and down 300+ pips while I was on the sidelines. Having missed these opportunities, this led me to close my FX account temporarily.
Although I’m already emotionless towards trading as a veteran trader, I still can’t shake the feeling of “missing the move”. So I’m going to take a break from trading FX to collect my thoughts. Thus, there will no longer be disclaimers regarding my positions since I don’t even have a funded FX account at the moment.
So let’s start on this week’s FX Analysis
Monthly Chart
Weekly Chart
Daily Chart
H4 Chart
Commentary / Technical Forecasts
Only time will tell what will happen with these pairs, all directionality for this week’s forecast is 50/50. So trade with caution!
USD/CAD [Long (?)]: Price is currently at a resistance level from Nov 16th, 2012, price surged up and punctured the level on Friday but didn’t close above it. Combined with that upper wick, I’m not sure what will happen with this pair next week.
AUD/USD [Short (?]: This pair broke the H4 (red) trend line this week, but we still have the daily (aqua) trend line in play. The daily trend line is drawn from the extreme low’s of this trend, so it could go up. But price did puncture on Friday but buyers pushed it back up and we ended up with a wick (like USD/CAD)
EUR/USD [Short (?)]: Looks like my 50% fib level was wrong last week, so I’ve drawn another set of fib lines to illustrate a new level of interest. The 1.3485 region is the red 50% fib level, which price bounced off of on Friday. This region also represents the resistance level from the end of February last year. So it’s been nearly 11 months since we were last up here. This is a big ‘make or break’ level, resistance combined with fibs, could end up in a big move in either direction. Upside isn’t capped until the 1.38 level, which is where the 61.8 fib levels are located.
GBP/USD [Short (?)]: We have some room to move down to hit the monthly trend line but considering that the other pairs are unsure, I’m not comfortable forecasting this one to break the monthly trend line. However, if it does break, it opens up a big down move to the 1.53/1.54 level.
Until next week, Good Luck Trading!
Brian