EURUSD, NZDSGD, GBPNZD, and Others On the Trade List This Morning
Cory Mitchell, CMT
Lots of pairs near key technical price structure levels this morning. Some of them moved off the levels overnight, which means waiting for a price action signal to get in. A couple of other pairs are moving into the key areas now.
No trade here yet, as the price is still rising into the top of the range.
Looking for signs of a topping pattern (see video below) between approximately 1.0990 and 1.1020. While a consolidation and break lower may occur on the hourly chart, a 15- or 5-minute chart may be needed to see the turn lower...if the turn lower occurs.
If the downside turn occurs, the target is 1.0840, which is near the bottom of the range but above the prior swing low.
There are also similar patterns in USDCAD and NZDUSD (long USD).
*EURUSD broke aggressively lower while writing. It was swift, so not much opportunity to get in. Will await a short on the 15 or 5 minute, but a nice indication that there are still sellers up there.
NZDSGD moved lower off the top of a range last night. The price is currently bouncing up toward the top of the range. I am awaiting a short trade signal.
As with the EURUSD, this short trade signal will likely occur on the 15- or 5-minute chart when this current rally starts to roll over to the downside again. This can occur slightly above or below the prior swing high and the opportunity remains valid.
The rollover to the downside may or may not occur. If the price continues higher with no rollover signal, I am not considering a long trade at this time.
If the short trade does occur, the downside target is 0.85, near the bottom of the range but above the prior swing low.
I looking for shorts in this pair versus NZDJPY. The NZDSGD has been a bit weaker lately and presents a better short opportunity.
This pair is near the bottom of a descending channel on the hourly chart, which also aligns with the bottom of a rising channel on the daily chart.
This one bounced overnight. Awaiting a price action signal to get long.
Upside target is 2.0350
The pair is moving in a large expanding range and working its way higher. It recently broke above a resistance level within the range and is in a short-term uptrend.
Awaiting an opportunity to get long near the rising trendline or the breakout area. Once again, the high reward:risk opportunities will occur based on signals on the 15- or 5-minute chart.
The longer-term upside target is 1.5450, which is below the prior swing high.
Since the price just broke out of a smaller range on the hourly chart, if the price makes moves back into that range, the uspide breakout may be false. That could set up a short trade, but for now, focused on the long.
Other Trades Possibilities on the Radar
EURSEK is near the bottom of a rising channel on the daily chart. This could present a buying opportunity. There is a similar pattern in USDSEK.
GBPJPY is in a descending channel on the hourly chart. It has already started a drop.
Beware the Correlations
A number of these pairs are correlated on different time frames, mainly the hourly and 4-hour time periods, but not so much on the daily.
Monitoring Price Action
Watching for price action signals was discussed throughout the article. This video details what to watch for. I am watching for a reversal on a small scale near the resistance/support areas of the price structures.
By Cory Mitchell, CMT @corymitc
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.
Assume I have positions, all the time, in many pairs.
Trades are based on strategies and are not meant to be predictions. The number of trades won varies between 30% and 60% based on the strategy. My objective is to make money based on solid reward:risk ratios, not try to predict every move of the market.