Forex Spider's Den GF Edition

As we could see on the previous Session Recap webinar, USDCAD behaved exactly as planned giving us more than 150+ potential pips on a shorting scenario. Recent jump in oil prices by 3 % suggested another drop in USDCAD (remember the correlation - OIL up = CAD up = USDCAD down).

Technically we can see lower highs and lower lows with a descending trend line that is holding the price from further rallies. Additionally, an inner trend line is making an X cross ™ with H4 further confirming the bearish outlook. We have 2 POCs for possible positional short trades, with continuation and breakout setup.

POC comes within 1.2865-1.2880 zone (H3,DPP, trend line) while POC2 comes within 1.2900-1.2915 zone (X cross ™, H4, EMA89). based on historical vs now moment concept and POCs we could expect sellers there.

However if the price doesn't pull back towards POC a strong momentum break below 1.2820 or 1h close below it, will aim for 1.2788 and 1.2738-30 subsequently.

 

How Forex connects to other markets?

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Fears of Brexit have diminished at least for the time being as latest polls suggest that pro EU option leads by 10 % (55 % vs 45 %). Additionally very good data for Average Earnings Index and Claimant Count Change has spurred additional bullish momentum where the GBPUSD reached 1.4660 resistance.

Technically we can see rising MACD, and confluence within first POC that is 1.4600 zone (pennant breakout , 23.6, round number ) and traders should watch for a possible bounce at the zone.

POC2 is 1.4520-35 zone where we see a confluence - DPP, L3, 50. Below is a strong support 1.4500 with 61.8 and EMA89. If we see another rejection targets should be 1.4660 and only on 1h momentum break or 4h candle close above H4 cam pivot - 1.4725 we could see 1.4830.

1.4500 should stay firm else the pair is back in a range with a downtrend potential.

 

The EURUSD broke through 1.1175 level as I showed on Live Session Recap webinar, touching the target. Now, trade should be focused on 1.1140 important support (X - Cross with equidistant lower channel line). Pullbacks towards 1.1250 could be shorted as 1.1250-70 is important cluster of resistance - POC zone (WPP, H3, EMA89, inner trend line). The pair is making a slow grind towards lower levels.

If 1.1130 fails, 1.1050 is next. Downside will stay intact as long as POC zone holds. Only if price breaks through 1.1270 we can expect an uptrend with 1.1390 as the target.

 

Cherry-picking Forex information

 

In the wake of major economic releases today, we can see that the GBP/USD pair is very close to critical support. Maybe it is time for a retracement. Current price action suggest a possible retracement towards 1.4540-50 zone (POC). 1.4385 is a very important support and we see a higher low compared to a previous low on 4h time frame. MACD has made a lower low and that counts as hidden bullish divergence. Additionally from L to H 1.4385 is 88.6 fib swing so that makes another confluence point. If the price retraces to POC ( L3, EMA89, 50.0) we could see initial selling again towards 1.4400-1.4385.

It is very important for traders to see the whole picture as only if the price breaks and closes below 1.4385 we could see 1.4320 and 1.4280. For now we could see a spike up as a part of correction.

 

Market was a bit surprised by a no rate cut from RBNZ that sent NZD/USD spiking above previous resistance leaving the trail of retail gap. The same time it appears that the US Fed, despite the slightly hawkish view of Yellen of late, will be unlikely to raise rates in June ahead of the UK referendum.
Technically the NZD/USD is showing a retail gap within 0.7027-0.7070 zone and it hasn't been closed yet. Additionally the gap is within POC zone (H3 WPP, 38.2, inner trend line). The zone 0.7020-60 could provide buying opportunities towards H5 weekly target 0.7250. However if the pair doesn't reject from the zone we might be witnessing a deeper retracement towards POC2 (78.6, L3, WPP, EMA89) 0.6985-0.6900 that also shows a historical gap and should be used for new moment buyers.

 

The EUR/GBP has formed inverted head and shoulder and traders might try to short into the top of the right shoulder, exploiting the best possible r:r. POC for counter trend trades comes within 0.9670-0.9695 (H4, bearish divergence, Pin bar, the top of the right shoulder). The first target is 0.7892. If 0.7890 is broken it will form bearish M pattern towards 0.7850 where we could see buyers due to trend confluence zone (WPP, L3, EMA89, historical buyers) - remember the pair is still in an uptrend. So pay attention to price action within these important levels and you might be able to trade it both ways.

 

Brexit vote’s impact on the Forex and financial markets *Your capital is at risk

 

GBP/CAD analysis

 

Winners and Losers of the Brexit

 

EUR/USD Bearish below 1.1000

 

Thanks for the update. If I ever decide to trust anyone in a 3rd world country with my cash, your on my radar!

 

Haha Thanks a lot for your confidence ! Appreciate it

 

Daily Analysis: GBP/USD for July 22
GBP/USD rejecting from the top of the right shoulder

 

How to avoid information overload in Forex trading

 

EUR/GBP Time to short
http://screencast.com/t/iAEnibzLj

 

EUR/JPY bearish zig-zag continues

 

EUR/USD strong support within 1.1050 zone

http://screencast.com/t/wdtAmIvXQuEt

 

USD/CAD Dead cat bounce

http://screencast.com/t/vhFCWw4hb