Forex Trades On Majors

Hello Forex Traders!

Another week of opportunity is ahead of us in the Forex market! As always our trading room will be ready to catch potential break out trades so let us take a look at what we can expect this week.

However, before we dive into a ton of current Forex charts, please review the article on moving averages from our Forex trading room via this link – it will be worth the time :) First pair of our analysis is the EURUSD.

EURUSD

The EURUSD closed with another bullish weekly candle, despite its intra-week bearish engulfing twins on the daily charts. Is this a hook back for more downside?

Nobody knows the answer BUT there is something way more important than that…

The risk of a downside trade is minimal (in terms of pip size).

Any stop loss could be hidden behind the 1.3580 top which means that the stop loss size is relatively small in comparison with the very sizeable downside potential. The -272 target is all the way down at 1.3150, the -618 at 1.2960, and the -1000 at 1.2750. The reward to risk ratio (R:R) adds up into multiples and is obviously tremendously advantageous for any shorts.

Forex Traders, who are interested in trading the break of the 1.3580 top (to the upside), should be warned that the daily Fibonacci retracement levels are close by: a 61.8% Fib is at 1.3630 and the 78.6% Fib is at 1.3720. These levels have a high chance of acting as resistance.

25- 11- 2013 eu d

GBPUSD

The Cable is back at resistance. It is not moving away from the resistance and is stubbornly staying close to it, which means that price could even be making a bull flag chart pattern.

The currency could however also be making a last pullback before changing trends. In any case, price is certainly at a decision moment: bounce or break. With that mind, the Forex trader has an opportunity to short – just as with the EURUSD – with a very small risk, but with a tremendous downside reward potential.

1)      Break scenario (up move): although a break above 1.6260 would be the first bullish confirmation, a break above 1.6340 (highest red line) would be needed for a firm long-term bullish development until the next resistance at 1.6750.

2)      Bounce scenario (down move): the GBPUSD would then need to break below 1.5850 for a firm long-term bearish development down to the bottom at 1.4820 and then potentially even lower.

25- 11- 2013 gu d

USDJPY

As expected the USDJPY is trending up nicely so continuation break out trades seem prime candidates on this pair. The break of the weekly triangle has been mentioned before in previous articles and it is now indeed taking place. Without doubt, price has clearly broken through the weekly triangle wedge, daily high at 100.60 (red) and daily high at 101.60 (red) and is doing so in a very impulsive fashion.

The only obstacle remaining is of course the big weekly and monthly top at 103.70, which is a major key level that should cause the currency to pause before continuing its uptrend. Once that level breaks then there could a massive Yen trend in play, which could bring the USDJPY to higher price levels such as 110, 120 and even 125. Break out trades on the smaller time frame up to and above that weekly top are now well worth the attention in my opinion.

For the moment there is little evidence to ponder about a bearish scenario as the uptrend break out is full in play and I do not see signs of weakness. If any such thing were to materialize, then I’ll mention those views in a future article.

Are you bullish on the USDJPY as well? Or is your analysis different and do you signs of bearishness and weakness on the USDJPY? Let us know down below!

25- 11- 2013 uj d

In the meantime I thank you for reading and sharing this article with others!

Good Trading!

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  • Chris Svorcik

    Hi Ryan, that is great news! :) Very happy to hear about your progress as a Forex trader!!! Awesome :) thanks for the feedback and wish you great trading in rest of the year! Chris

  • Ryan Lemmel

    So far I up about 200 pips on long USDJPY position looking to add on any .382 .50 or .618 retracement followed by breakout. Appreciate your articles and trade room after only a couple months I find myself entering profitable trades on my own. All about risk management followed by high probability set ups with favorable R:R