The Power of the Week Analysis

Hello Traders!

Another Monday, another trading week! This year’s opening month of January started with tremendous bullish runs on the Yen and Euro. These were amazing movements with almost no stop in sight! One thing we should however be careful of is the fact that the January trading month is actually closing this week on Thursday. Month and quarter end closures are always tricky days, and we traders should be a bit more cautious. One more reason to be extra defensive in this week’s trading sessions is because of the NFP announcement release on Friday. So we start today’s current trading spot with more caution than usual.

Now time for the charts and for some Forex tips and currency trading tips!

The recent bullish trends make the life of the the position traders and swing traders who concentrate on with the trend trades somewhat difficult. The feeling of entering a trade at these levels makes a trader’s head spin when looking at the price level where the currencies started.

If movements of hundreds of pips in one direction will make any trader sweat, then movements of thousands of pips will cause traders to have problems of heights. In the back of every trader’s mind lingers the question “where will this pair” turn? And the question deserves a lot of merit.

The EURJPY chart is a perfect example of the rocket movements we have seen on almost all Yen pairs. Taking a buy causes a lot of fear in any trader’s mind as nobody is looking forward to buy the high. However, taking a sell for the time being also seems senseless for the moment. Nobody wants to get burnt trading any Yen pair southwards in this huge bull market.

28.01.2013 EURJPY week

In my opinion the best opportunity is to focus on places where entering in the current trend has the smallest risk. Depending on this week’s price action, a buy at the low of last week’s low would have yielded great results several weeks in a row. If we were to pinpoint any likely place of support, then the last week’s low and pivot point on the 4 hour chart has the highest chance of respect and the best reward to risk opportunities out there. I will be monitoring those levels closely.

What are your thoughts on the Yen rockets? Let us know what your approach is in tackling this rocket!

Besides the EJ and other Yen pairs, I will also be keeping an eye on the GBPUSD and the AUDUSD. Both currencies had very bearish weeks last week and are reaching crucial support levels. I will be interested to see if we get breaks of those support levels for bigger anticipated long-term movements or will we see strong/weak bounces.

I was looking for GU weakness already a while back. The GU is now close to the weekly wedge line at the bottom as well, and a break of that line could spell more impulse and more bearish sentiment to follow. Price levels of 1,55 and 1,5250 will still be vital horizontal support areas as well.

28.01.2013 GBPUSD week

The Aussie has been stuck in a sideways range and despite several attempts to break to the upside, not one single attempt has been successful to gain significant ground. If the currency cannot move up, could it move down?
28.01.2013 AUDUSD week

There is a huge weekly trend line waiting for a touch at around 0.9800. A move down and bounce at the .98 level would be ideal for trend traders who want to watch a huge potential up move from the start. The Aussie could be ready for such a move after it potentially completes the triangle formation….

Always, I wish Good Wisdom and Good Trading!

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