Trend Line Analysis : 25/08/2015

Introduction to Trend Line Analysis
Welcome to our newest feature; Trend Line Analysis. Our professional market technician showcases intraday / swing trade setups on a broad spectrum of FX currency pairs. The most effective way to use the setup are:
▪ If indicated price zone holds; consider partial profit taking between 20-40 pips before aiming for the maximum listed target.
▪ If the price zone fails to hold; we likely to see price moving against us. Fail means; the candle closing higher or lower to indicated price zone.

 

I’m sure wherever you go; you have been hearing the same thing. Blood on the floor; total carnage; what was that; this is madness; OMG; who is behind all this; is this for real and my personal favorite and I thought I have seen all sort of market conditions but I found out today, I was wrong.

Was it the Dollar weakness; or was it the crash on the stock market or was it Yen who was the culprit. Were there any usual suspects behind it, hedge funds / CB or perhaps Aliens.

Whatever it was; it brought the best of the best to its’ knee. Usually we would expect low volume / low volatility for August; but was not the case today. It was the case of two currencies on Friday; where US Dollar decided to dip and EUR decided, it had enough of lackluster move and decided to try up-north. They were to an extend challenge by YEN; but it was the EUR who was the dictator and was dictating till the closing bell on Friday.

Then came the weekend and all whispers were about; what EUR was up-to. There were some after shocks on Stocks as well on Friday where something was felt which was not normal in terms of behavior on them. As we have been seeing over the past good 7-9 months any hard dips on stocks was almost instantaneously bought for newer all time highs. It was thought perhaps this time the decline was bit harder & deeper than last time but most thought of it as a better buying opportunity.

Fast forward and it was opening bells for the current week. The date was 24/05/2015 and with the opening bells we heard a roar like the resident of Pompeii felt prior to its’ eruption and the rest can be look up on the history books; what happened next.

The slaughter house was set; weekend perhaps was the calm before the storm and then all hell broke lose. USDJPY was in a mood to show; it doesn’t like to be the second best and showed its sharp teeth, sharpen claws and appetite that was saying feed me more. It was a beast unleashed and it didn’t care nor respected anything that came in front. It didn’t even spare the Mighty EUR and it showed it meant business on the word GO.

The rest that followed will be written down in the history books; the almost 150 USD slide on SPX or 200 USD decline in 2 trading days, 1000+ plus pips surge on EURAUD on a single day, 800+ drop on GBPJPY and the list goes on.

It’s not that we haven’t seen such ferocity of moves before; we have seen bigger than these. What makes this truly amazing is that in the past it was usually one currency that gets all the volatility ( as we saw on CHF on Jan 15,2015 when SNB took out the EURCHF flooring ); but today it was the case with almost every currency. NZDUSD flashing 300+ pips nose dive and covering that within moments and well the list goes on. Perhaps the Gold was the only quieter one that wasn’t truly moved or bother with what was going all around. However; it decided to increase the past 2 trading range with some drop towards the end of the trading day.

In the end; it didn’t matter who you are and what you think on the pairs or the market in general; it was total carnage and madness and we simply hope that you were spared of this madness.

I decided to layout few sketches on the pairs; but would strongly advise if the volatility stays like yesterday; be very cautious and use stop-loss.

Last but not least; my special yesterday was on the JPY and suspected it will turn out to be a monster; but I seriously wasn’t expecting this. Also suggested drop on the SPX to continue; but this drop surpass expectation as well.

 

EURJPY

Feeling lower up on the pair. 138.20-4X expected resistance and if holds; can see a drop heading for 134 handle.

EURJPY 8 hr - We can break support for move towards 134 handle before more fallout
EURJPY 8 hr – We can break support for move towards 134 handle before more fallout
EURJPY 2 hr - Either side breaak of the trend line will follow the move to that side
EURJPY 2 hr – Either side break of the trend line will follow the move to that side
EURJPY Daily - Showing 134 zone as base of a wedge
EURJPY Daily – Showing 134 zone as base of a wedge

NZDUSD

Suggesting it can attempt to stage a rally if can stay higher to T2 and especially closing the day higher to it to begin with.

NZDUSD Daily - Holding higher to T2 can provoke bounces to T3 to start with
NZDUSD 8 hr – Holding higher to T2 can provoke bounces to T3 to start with

USDCHF

 

 

USDCHF Daily - Approaching base of the channel and a possibly bounce expected off there T1
USDCHF Daily – Approaching base of the channel and a possibly bounce expected off there T1

USDJPY – This could get uglier

Nothing much to pen here beside keep an eye on the stocks; if they slip further, USDJPY just may decide to try out 111 handle.

USDJPY Daily - Dangerous looking steps if decides to fall further
USDJPY Daily – Dangerous looking steps if decides to fall further
USDJPY Daily - Dangerous looking steps if decides to fall further - Close Up View
USDJPY Daily – Dangerous looking steps if decides to fall further – Close Up View

GBPJPY

Can’t say much. The pair can still do a move close to 182 handle. Either GBP decides to pull up and make it’s way higher else GBPJPY can get hit out.

GBPJPY 8 hr - Scary & that's all I can say esp if USDJPY decides to break under 115.9X en-route to 111
GBPJPY 8 hr – Scary & that’s all I can say esp if USDJPY decides to break under 115.9X en-route to 111

USDCAD

Falling oil price or plain simple shaky and weaker commodity currencies including AUD / NZD.

knock on 1.34 handle likely coming. T5 good enough spot on the charts to try shorts though.

USDCAD 8 hr - T5 likely test coming and that means more brutality on it's crosses
USDCAD 8 hr – T5 likely test coming and that means more brutality on it’s crosses

 

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