Pattern Trader - February - 2016 - Trade Analysis, Trade Set-ups and Profit (Loss) Currency Pair: NZDUSD Entry Order: BUY stop @ 0.6561 Stop loss: 0.6518 Take profit: 0.6787 Analysis: In the video (attached above) I explain why the US dollar may have a set-back as a result of diminished expectations of a rate hike in the US in 2016. If the dollar sells off I think one of the pairs to benefit will be the NZD vs. USD. Today's very large "outside" Key Reversal bar, and break-out of a symmetrical triangle, suggests that recent support could turn in sustained momentum to the upside.
Currency Pair: AUDJPY Entry Order: BUY stop @ 86.25 Stop loss: 85.65 Take profit: 88.18 Analysis: AUDJPY recently burst higher out of an inverted head-and-shoulders (bull) price pattern. Should we see penetration above today's inside-day bar, I think it would pave the way to higher prices...in a hurry.
Currency Pair: AUDUSD Entry Order: SELL stop @ 0.7037 Stop loss: 0.7087 Take profit: 0.6918 Analysis: This pair has been thrashing about in a wide trading range. Today's Key Reversal bar suggests we may see a re-test of the 0.6800 price level soon.
Currency Pair: GBPJPY Entry Order: SELL stop @ 172.58 Stop loss: 173.18 Take profit: 171.37 Analysis: GBPJPY has been in a prolific down-trend over many months. The recent rally off the 164.00 low is either a short-covering rally that will peter out, or if this pair is going to rally it still looks like it needs to do a re-test of lower prices. Either way, penetration below the low of today's inside-day should pave the way for a move to the downside. (Full disclosure. The markets are extremely fickle of late and both signals tonite could turn out to be duds, so keep your risk low).
Currency Pair: AUDJPY Entry Order: BUY stop @ 84.78 Stop loss: 84.23 Take profit: 87.77 Analysis: AUDJPY appears to have formed an Inverted Head-and-Shoulders (bottom) price pattern. Following a rally past the neckline, over the past few trading sessions AUDJPY retraced back to the neckline. In today's session, this pair feel under the neckline and rallied huge to close at the high of the day (Key Reversal). This is very constructive price action for the bull's.
Currency Pair: EURGBP Entry Order: BUY stop @ 0.7615 Stop loss: 0.7569 Take profit: 0.7709 Analysis: For the past few months, EURGBP has been in a firm up-trend. For the last several weeks trading has been consolidating at current price levels. Today's Key Reversal suggests that the upward momentum in this pair is likely to resume.
Currency Pair: EURCAD Entry Order: BUY stop @ 1.5430 Stop loss: 1.5371 Take profit: 1.5687 Analysis: Following a steady uptrend over the past few weeks, and months, this pair has been in a freefall since peaking at the 1.6100 price level. Even though we may not exceed that level, I feel that prices have been "compressing" at current levels. I think if we take out the high of today's (almost) inside-day bar, we could re-trace, some of last week's decline - to higher prices from here.
Currency Pair: CADJPY Entry Order: SELL stop @ 84.74 Stop loss: 85.29 Take profit: 82.57 Analysis: For the past twelve months CADJPY has been trending lower. Recently, after hitting a multi-year low of 78.93 this pair has rallied to the 87.00 price level in what appears to be a "short-covering rally. I feel if we penetrate below the low of today's inside bar, we could be headed back to last week's low... in a hurry.
Currency Pair: EURAUD Entry Order: BUY limit @ 1.5755 Stop loss: 1.5697 Take profit: 1.6018 Analysis: EURAUD is currently trading in a large range between 1.5300 and 1.6100. I believe we are going to see an attempt on the upper band of this range soon. Accordingly, I think getting long EURAUD at current levels is a good idea.
Currency Pair: EURUSD Entry Order: BUY stop @ 1.1216 Stop loss: 1.1139 Take profit: 1.1457 Analysis: I believe the EUR is poised for a dramatic move to the upside against most major pairs. (Unfortunately I was stopped out of EURAUD in yesterday's trade. I also think EURAUD is a BUY at current levels). There is short-term resistance at the 1.1240 level in EURUSD - and it may take session, or two, before we see this pair bust out to the upside. I want to give this pair sufficient room to swing at current levels, so SL is intentionally far away. Just reduce your lot size. You don't want to be stopped out of this pair, until it launches to higher prices from here.
Currency Pair: NZDCAD Entry Order: BUY stop @ 0.9250 Stop loss: 0.9202 Take profit: 0.9487 Analysis: NZDCAD is in a primary long-term up-trend. It feels like if we take out the high of today's inside-day bar, we should see this pair retrace back to the 0.9500 price levels shortly.
Currency Pair: NZDUSD Entry Order: BUY @ market (0.6640) Stop loss: 0.6560 Take profit: 0.6857 Analysis: This is an early call. The NZDUSD Weekly chart appears to be forming a double-bottom pattern which could lead to a substantial (up) move from current levels. Based on today's Key Reversal bar, I feel comfortable probing the long-side of this pair at current levels. Click this link for a more detailed analysis: NZDUSD Special Report
Currency Pair: GBPJPY Entry Order: BUY stop @ 167.15 Stop loss: 166.45 Take profit: 0.6857 Analysis: I am seeing an interesting divergence between the primary price pattern and price action in the yen-cross pairs. Today's Key Reversal bar, at or near, the old low prices a few weeks ago suggests there could be an explosive move higher...in very short order. Click this link for a more detailed analysis: Price Pattern vs. Price Action Analysis
Currency Pair: NZDCAD Entry Order: BUY stop @ 0.9238 Stop loss: 0.9183 Take profit: 0.9487 Analysis: NZDCAD is in a primary long-term up-trend. It feels like if we take out the high of today's Key Reversal bar, we should see this pair retrace back to the 0.9500 price levels shortly.
Currency Pair: EURCAD Entry Order: BUY stop @ 1.5741 Stop loss: 1.5679 Take profit: 1.5987 Analysis: EURCAD is in an up-trend. Today's Key Reversal in the direction of the primary trend, suggests momentum will continue to the upside - and a challenge of the recent high's at 1.6100.
Currency Pair: GBPCHF Entry Order: BUY stop @ 1.42070 Stop loss: 1.42250 Take profit: 1.44770 Analysis: This is admittedly a speculative call. However, if we penetrate above the high of today's inside bar this pair could catch some momentum to the upside. Keep your risk low if you decide to follow me on this one.
Currency Pair: GBPAUD Entry Order: SELL stop @ 2.03160 Stop loss: 2.04110 Take profit: 2.00570 Analysis: GBPAUD has been in a six-month decline (see down-trend "channel"). If we take out the low of today's Key Reversal bar, I think it will pave the way for a move to (at least) the recent 2.00000 price support level...and probably (much) lower.
Currency Pair: EURAUD Entry Order: SELL stop @ 1.5767 Stop loss: 1.5818 Take profit: 1.5387 Analysis: For several months EURAUD has been a very unpredictable and range-bound pair. However, the emergence of a Double-Top at recent high's suggests this pair is going to reverse direction (lower). I think if we take out the low of Friday's inside-day bar, we could see a (dramatic) sell-off in this pair.
Currency Pair: AUDUSD Entry Order: Buy stop @ 0.7128 Stop loss: 0.7077 Take profit: 0.7487 Analysis: The Weekly chart of AUDUSD is flashing some very strong technical support. Accordingly, if we take out the high price of Friday's inside-day bar, we could see further momentum and upside in this pair...in a hurry.
Currency Pair: GBPJPY Entry Order: Buy stop @ 164.78 Stop loss: 163.80 Take profit: 167.78 Analysis: Following a massive sell-off (in all yen-cross) pairs over the past several months, I believe last week's price action was a "crescendo", and it is likely we will see a (sharp) reversal. I think the primary beneficiary of a "turn" in yen-cross pairs will be GBPJPY (I also really like the Double- Bottom / inside-bar combination of AUDJPY). Should we take out the high price of Friday's inside-day bar, we could see further momentum and upside in this pair. However, we could see massive volatility in GBPJPY before it goes in the anticipated direction, so keep your risk LOW on this one. Currency Pair: USDCAD Entry Order: SELL stop @ 1.3795 Stop loss: 1.3847 Take profit: 1.4037 Analysis: USDCAD appears to have formed a Head-and-Shoulders(bear) price pattern. Penetration below the low of today's NR7 bar (the lowest trading range in the past seven days), could pave the way for lower prices.
Currency Pair: NZDUSD Entry Order: BUY stop @ 0.6677 Stop loss: 0.6629 Take profit: 0.6887 Analysis: This pair is trapped in a trading range. However, the recent Key Reversals price action in this pair suggests it could be ready to test the upper levels of the trading range.
Currency Pair: USDCAD Entry Order: BUY stop @ 1.3914 Stop loss: 1.3861 Take profit: 1.4187 Analysis: USDCAD has been in a long-term up-trend. Today's outsize Key Reversal bar, at a (recent (Double-Bottom) low, suggests momentum will resume (to the upside). Currency Pair: GBPJPY Entry Order: SELL stop @ 162.41 Stop loss: 163.18 Take profit: 159.18 Analysis: The Head-and-Shoulders (top) price pattern on the Weekly chart for GBPJPY is dominating the price movement in this pair. After a brief thrust of recent lows today's Key Reversal bar suggests prices will continue to the downside...in a hurry.
Currency Pair: EURAUD Entry Order: SELL stop @ 1.5469 Stop loss: 1.5527 Take profit: 1.5267 Analysis: EURAUD appears to be in the process of forming a Double-top (bear) price pattern. Should we take out the low of today's "outside" Key Reversal bar, this pair could come crashing down to the neckline in a hurry.
Currency Pair: NZDCAD Entry Order: SELL stop @ 0.9056 Stop loss: 0.9096 Take profit: 0.8878 Analysis: NZDCAD has completed a Triple-Top (bear) price pattern. Penetration below the low of today's inside-day bar, and the neckline, could result in (much) lower prices from here.
Currency Pair: EURAUD Entry Order: SELL stop @ 1.5467 Stop loss: 1.5521 Take profit: 1.5267 Analysis: I recommended this trade in yesterday's analysis, however, based on today's price action, I like it even more today. (Yesterday's short trade pending order was NOT triggered). EURAUD appears to be in the process of forming a Double-top (bear) price pattern. Should we take out the low of today's inside-day bar, this pair could come crashing down to the neckline in a hurry.
Currency Pair: GBPJPY Entry Order: SELL stop @ 162.02 Stop loss: 162.89 Take profit: 159.77 Analysis: Admittedly, recently I have been conflicted as to the next direction in the yen-cross pairs. On the one-hand, most of the yen-cross Weekly charts look very bearish. However, in the past month some of the yen-cross pairs, most notably CADJPY and AUDJPY formed, what appeared to be Double-Bottom price patterns, which I thought could lend (short-term) support...and the possibility of a (short-term) rally. However, the past few day's price action has confirmed the ominous implications of the Weekly chart bear patterns. So the (very) likely direction of the yen-cross pairs will be (much) lower. Accordingly, penetration, below the low price of today's reversal bar in GBPJPY, will pave the way to lower prices in this pair.
Currency Pair: EURUSD Entry Order: BUY stop @ 1.1141 Stop loss: 1.1091 Take profit: 1.1311 Analysis: EURUSD appears to be going incrementally higher in a stair-step fashion. Following a break-out above the resistance area (at about the 1.1060 price level), prices have re-traced back to this level. However, Friday's Key Reversal bar suggests that the old resistance level will become new support. I think prices in EURUSD bounce to (much) higher prices from here.
Currency Pair: USDCHF Entry Order: SELL stop @ 0.9877 Stop loss: 0.9927 Take profit: 0.9687 Analysis: USDCHF appears to have formed a Double-Top (bear) price pattern. Following a crash through the neckline at the 0.9790 price area, this pair has rallied (in what appears to be a "dead-cat" bounce) to the 0.9975 level. Friday's Reversal bar at the rally high price level, suggests this pair is ready to turn-tail (lower)...in a hurry.
Currency Pair: USDJPY Entry Order: SELL stop @ 112.49 Stop loss: 113.09 Take profit: 110.18 Analysis: USDJPY recently broke out of a very bearish Weekly chart pattern. Penetration below the low of today's inside-day bar could pave the way for a breach under last week's lows (at around 111.00) in this pair.
Currency Pair: NZDCAD Entry Order: SELL stop @ 0.9153 Stop loss: 0.9211 Take profit: 0.8987 Analysis: NZDCAD has formed a Triple-Top (bear) price pattern. I think if we penetrate below the low of today's Reversal bar, we could see (much) lower prices.
Currency Pair: EURCAD Entry Order: SELL stop @ 1.5079 Stop loss: 1.5158 Take profit: 1.4818 Analysis: EURCAD has formed a Double-Top (bear) price pattern. Penetration below the low of today's inside-day bar, and the neckline, could lead to a huge price decline...in a hurry.
Currency Pair: CADJPY Entry Order: BUY stop @ 81.91 Stop loss: 81.45 Take profit: 85.87 Analysis: A few weeks ago CADJPY formed a Double-Bottom (bull) price pattern. Recently CAJPY exhibited a bullish divergence from the other yen correlated pairs (whereas, all the other major yen pairs made new weekly lows, CADJPY did NOT). Today's major Key Reversal bar suggests price momentum could swing the other way (higher)...in a hurry.
Currency Pair: NZDUSD Entry Order: BUY stop @ 0.6677 Stop loss: 0.6631 Take profit: 0.6877 Analysis: NZDUSD appears to have established support at current price levels. Should we penetrate above the high of today's Key Reversal, we could be on our way to piercing the upper level of the symmetrical triangle price pattern that has been "containing" price action at current levels, and provide a catalyst for much higher prices from here.
Currency Pair: GBPUSD Entry Order: BUY stop @ 1.3997 Stop loss: 1.3935 Take profit: 1.4218 Analysis: I'm going out on a limb on this one. This is an early call, but I get a sneaky feeling we are oversold based on the "Brexit" speculation surrounding this currency pair. On a technical basis, while these small inside-day bars at the bottom (or top) of an extended channel, often signal a (major) reversal. I have a feeling if we break above the high of today's range, we could see an explosive move (higher).
Currency Pair: AUDCHF Entry Order: SELL stop @ 0.7069 Stop loss: 0.7111 Take profit: 0.6909 Analysis: AUDCHF appears to be trading in a range between 0.6750 and 0.7300. Friday's Key Reversal bar suggests that this pair is now poised to challenge the lower end of the trading range.
Currency Pair: GBPJPY Entry Order: BUY stop @ 158.55 Stop loss: 157.77 Take profit: 162.18 Analysis: Admittedly, this suggested trade could be a "reach". I have been conflicted over the direction of the yen-cross pairs this week. On the one hand the Weekly chart patterns in (most) of the yen-cross pairs is overwhelmingly bearish. However, last week, CADJPY broke (higher) out of a Double-bottom Daily chart pattern. Also Friday's Key Reversal price action in USDJPY, suggests that something is brewing in the yen - we could possibly be on the precipice of a (major) turn in the yen complex. Accordingly, I am willing to "roll the dice" on the possibility of GBPJPY busting above the "Falling Wedge" price pattern. I think if we break above Friday's high price, AND, above the Falling Wedge down-sloping line, we could see a quick and explosive move (to the upside). Keep your risk low on this one.
Pattern Trader - February 2016 - Trade-by-Trade Profit (Loss)