The Ferrari Of The Forex Trading

Hello Traders!

Today’s focus will be on the GBPJPY! So get your reading glasses and a cup of tea for this in depth analysis! Today’s article will be a great guide for your Forex trading plan!

First, let us start with a quick recap of the majors to get an idea which direction the crosses could be headed to.

1)      The USDJPY has been fighting to reach higher grounds for quite a while now but it has not been able to crack the 94.50 resistance level.

This level actually was already viewed as a potential barrier for this currency pair in this article: Yen 110? 

Basically, the longer the currency stays under that high, the more likely a deeper correction on the UJ will indeed take place.

Of course a break 94.50 should clear the road for a further continuation to at least the 100 level. Read more details on the UJ in this Forex trading strategy article. 

2)      The GBPUSD has been indeed making that down move as we at winners edge trading were anticipating. The GU is in its 5th wave on the 4 hour and day chart. Also the Cable finds itself quite close to the weekly support areas of 1.5250-1.5350.

A bounce from this horizontal weekly support level is quite likely as it has acted as strong support in the past as well. In fact, the last time that the GU was lower than 1.5250 price level was approximately 2,5 years ago. Therefore, the chances that price will break through such an important price level are slim.

Read here more details on the GBPUSD for further Forex advice. 

From this analysis we can anticipate downside continuation on the GU until we reach weekly support and downside correction on the UJ until we break the high or reach a big retracement level.

Enough discussion about the majors….

Now its time for… the Ferrari of all currencies: the GBPJPY!

Of course the daily and weekly chart both show a huge impulsive move up, just like any Yen cross.

It is interesting to note however that recently price action to the upside has halted somewhat. It seems that the GJ is making a bigger correction.

The questions are:

-          Will the up trend continue?

-          And if so, when and from where?

There are interesting questions. If we look at the Elliott Wave count on the day chart, the likelihood of more continuation is quite high in my opinion. Of course this analysis could change 2 weeks from now depending on the price action information we receive. But the likelihood of a wave 4 and 5 are quite high.

This of course leads us to the question, where would wave 4 end and wave 5 continue?

That question is best answered by a Fib! If we place a Fibonacci retracement on the potential wave 3, we can see that price has already retraced back to the .236 level. A 382 Fib however is considered the normal retracement level for a wave 4.

 

We also see 2 bottoms at the same price level (+/-139.30), which could act as support.

The wave 5 target is the double top and the -0.272, which is at 153.80. I myself will be keeping a hawks eye on price action clues that indicate a turnaround anywhere in that area.

Until we reach the 382 Fib I do think further downside corrections is possible, but one should be careful when trading against such a strong trend. The preferred trade is catching the wave 5.

Good Trading!

Forex Currency Trading System - Weekly Heads-up

Welcome Traders to today’s overview for the upcoming week!

Hope you had a good weekend and plenty of time to do some charting. In my opinion it is never a bad moment to do analysis when the charts are standing still. It gives a good opportunity to create excellent Forex strategy trading plans.

Long-term charts

Today’s analysis will focus on the long-term charts, such as the weekly graphs, as Mondays and Fridays are never the best days for intra-day trading.

Mondays are difficult because the markets are trying to find their balance and direction after the weekend pause. Fridays are tougher because the market has already made substantial movements throughout the week.

On Monday’s I therefore like to analyze the long-term charts and identify whether or not there are any interesting swing trade setups. The EURUSD will be our first focus.

EURUSD

The EURUSD has been retracing downwards for the last 3 weeks. This retracement can be explained by the following facts:

1)      The currency has completed 3 waves up

2)      The currency has completed 3 waves up within the 3rd wave

3)      There were 3 waves in each of the 3 waves within the 3rd wave

4)      The wave 3 target hit the -0.618 target right to the pip (day chart)

The EURUSD up move was therefore completed and it was high time for a down move.

 

The Big Question

The big question is: how to trade the EURUSD? Is the EURUSD upward correction over and are we now at the start of a down trend? Or will we make one more upward correction before making a bigger down trend?

Let us take a look at the week and month chart for more guidance on how to trade the EURUSD and formulate a trading plan.

On the month chart we are able to see that the current month of February is still retracing January and has not yet broken its low at around 1.30. Another interesting fact is that the EURUSD had 6 bullish months in a row. A retracement of that move up only seems naturally now. However, there is something else that is even of more importance.

Monthly Wedge

The most important factor in my analysis is that there is still a high likelihood of testing the previous top on the month chart before moving down again. Why?

The last down move on the EURUSD was not able to break the pervious bottom. That created a wedge where price cannot break tops and bottoms. The EURUSD is now in its final leg of a contracting wedge. In theory this wave up can stop anywhere and at any retracement of the last move down.

 

But I do believe that certain areas are more likely than others.

1)      The probability of the currency retesting the previous high  is high

2)      The probability of the currency testing the upper week/month wedge line is high

3)      The probability of the currency testing the 786 Fibonacci retracement level is high

Week Fibs

When looking at the week chart, we can see that the move up did not stop at a Fibonacci retracement level of the last swing high swing low to the downside.  But we are respecting the Fib targets to the upside.

 

Conclusion

The upside Fib level targets are so far more important than the downside retracement levels. So in that regard I do believe that the EURUSD monthly wedge would finish its upward correction. That upward correction most likely will end at a Fib level retracement such as the 786 and not half half way the 500 and 618 Fib.

Therefore when putting all the pieces of the puzzle together, I do believe that the likelihood of this down move turning out to be a correction of the up move for another leg up is high.

Up Fib

If we place a Fibonacci retracement key on the last move up, we can see that we are at the 500 Fib, plus trend line support as we speak. Another likely bouncing spot to the upside could be the 500 Fib and huge weekly bottom at 1.2670.

Another way of looking at the chart is fibbing the last wave up on the week chart, in stead of the entire double wave up. In that case we can see the the EURUSD respected the 500 Fib last week. A move down to the 618 and then up to the -618 target which equals the 786 retracement is also a likely scenario:

 

Forex Currency Trading Systems - FOREX (Foreign Exchange Market)

Forex Currency Trading Systems - FOREX (Foreign Exchange Market)

The foreign exchange market is also known as FX or it is also found to be referred to as the FOREX. All three of these have the same meaning, which is the trade of trading between different companies, banks, businesses, and governments that are located in different countries.
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Cash, stocks, and currency is traded through the foreign exchange markets. The FOREX market will be present and exist when one currency is traded for another. Think about a trip you may take to a foreign country. Where are you going to be able to 'trade your money' for the value of the money that is in that other country? This is FOREX trading basis, and it is not available in all banks, and it is not available in all financial centers. FOREX is a specialized trading circumstance.

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Forex Currency Trading Systems - should you invest?

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Constant trading is done in the forex markets as time zones will vary and the markets will open in one country while another is near closing. What happens in one market will have an effect on the other countries forex markets, but it is not always bad or good, sometimes the margins of trading are near each other.

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Foreign Forex Currency Trading Systems is different from the stock market

Foreign Forex Currency Trading Systems is different from the stock market

The foreign exchange market is also known as the Forex Currency Trading Systems, and the forex market. Trading that takes place between two counties with different currencies is the basis for the fx market and the background of the trading in this market. The forex market is over thirty years old, established in the early 1970's. The Forex Currency Trading Systems is one that is not based on any one business or investing in any one business, but the trading and selling of currencies.

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