Thursday, September 16, 2010
FOREX DOJO TRADE # 9 ( Change of TP)
Just want to bring TP level to 132.85. Don't want to stretch too far below .50 Fib level @ 132.95 range.
Wednesday, September 15, 2010
FOREX DOJO TRADE # 9 ( Go Figure)
After learning that the BOJ was selling JPY last night it's clear why none of the technical levels held there own. Now that we are nearly 500 pips from where we were on Monday, the break lower that was witnessed at 129.00 means a lot less. By where we sit now I feel that a cautious sell is the way to go . I will place an order to sell GBP/JPY @ 133.74(pending) with TP 132.65 annd SL 134. 30. Here's why:
1.After breaking 129.70 and 131.60 it clear that the immediate momentum has shifted upward. With the price sitting comfortably above the 100 EMA on 30 min - 4 hour charts it seems like the skies the limit, but is it? The break higher was clearly based on fundamental factors (Government Intervention in this case). Now that these factors look to have subsided for now I think the price will return to it's natural course fairly soon.
2. The daily 100 EMA at 133 65 hasn't been breached and could be all that is needed to bring about a dip as long as we don't close above it in the next few hours.
3. The RSI is reading Overbought on the daily chart but oversold on 5 min to 1 hour chart. This indicates that although the move up is near the ceiling, there might another jump to see if the highs can be broken. I'm betting they can't.
4. The 61.8 Fibonacci level sits at 134.00 after falling nearly 100 pips already from 134.00 it looks like this level combined with the 100 day EMA could be enough to cap the rally for now.
EDITED @ 22:35 PST
CHECK COMMENTS TOMORROW TO FIND OUT RESULTS
1.After breaking 129.70 and 131.60 it clear that the immediate momentum has shifted upward. With the price sitting comfortably above the 100 EMA on 30 min - 4 hour charts it seems like the skies the limit, but is it? The break higher was clearly based on fundamental factors (Government Intervention in this case). Now that these factors look to have subsided for now I think the price will return to it's natural course fairly soon.
2. The daily 100 EMA at 133 65 hasn't been breached and could be all that is needed to bring about a dip as long as we don't close above it in the next few hours.
3. The RSI is reading Overbought on the daily chart but oversold on 5 min to 1 hour chart. This indicates that although the move up is near the ceiling, there might another jump to see if the highs can be broken. I'm betting they can't.
4. The 61.8 Fibonacci level sits at 134.00 after falling nearly 100 pips already from 134.00 it looks like this level combined with the 100 day EMA could be enough to cap the rally for now.
EDITED @ 22:35 PST
CHECK COMMENTS TOMORROW TO FIND OUT RESULTS
Tuesday, September 14, 2010
FOREX DOJO TRADE # 8
Tonight I will place a sell order for GBP/JPY @ 131.60 with TP 130.85 and SL 132.15.
I expected for a good bounce from the 127.80 zone but nearly 400 pips is just nuts. Frankly I think this rally is overdone and a correction is now in play at least to the 23.6 Fibonacci level around 130.70. Tonight I will sell because:
1. The bounce from 127.80 has been extremely sharp, Profit taking and new shorts should provide decent resistance above 131.75 which is why my stop is in the 132.00 area. A break could mean 133.00 in a heartbeat.
2. RSI on 5 min- 4 hour charts is overbought meaning a reversal of some sort should be close by.
3. Although the 100 EMA has been smashed on all the charts from 5 min to 4 hour, it seems to have traveled to far from the price on the 1 chart which is why I prefer to play the reversion to mean card from these levels.
4. A trend line coming in at 131.30 has been breached but just by a hair. I feel the may drop back below it before making another jump.
[RESULTS ARE ALWAYS POSTED IN COMMENTS SECTION THE NEXT DAY]
I expected for a good bounce from the 127.80 zone but nearly 400 pips is just nuts. Frankly I think this rally is overdone and a correction is now in play at least to the 23.6 Fibonacci level around 130.70. Tonight I will sell because:
1. The bounce from 127.80 has been extremely sharp, Profit taking and new shorts should provide decent resistance above 131.75 which is why my stop is in the 132.00 area. A break could mean 133.00 in a heartbeat.
2. RSI on 5 min- 4 hour charts is overbought meaning a reversal of some sort should be close by.
3. Although the 100 EMA has been smashed on all the charts from 5 min to 4 hour, it seems to have traveled to far from the price on the 1 chart which is why I prefer to play the reversion to mean card from these levels.
4. A trend line coming in at 131.30 has been breached but just by a hair. I feel the may drop back below it before making another jump.
[RESULTS ARE ALWAYS POSTED IN COMMENTS SECTION THE NEXT DAY]
Monday, September 13, 2010
FOREX DOJO TRADE # 7
Tonight I will place a sell order for GBP/JPY @ 128.60 with a TP 127.90 and SL 129.15.
Due to the pair breaking through support in the 129.00 region, the range between 130.00 - 129.00 has broken to the downside. Resistance now lies in the 128.80 area but pressure seems strong enough that we may not reach that level. A break of 129.00 could bring 129.50-129.60 into play fairly fast, which is why I have placed my SL close to that level. There are not many indicators that can help to predict price movement from this level so this is strictly a momentum catching trade. Here are some of the factors for which I prefer the short side:
1. Breaking of support first at the 129.40 level than again in the 128.90 level indicates that longs are bailing out and bears are gaining momentum. The lack of bounce at these levels also signals a strong bearish sentiment.
2. Next support rests in the 127.80 zone which should be where sufficient buy orders are placed due a seemingly strong trendline that lands in the area. Since this latest move looks like a sharp one, I would guess that the pair will test this area.
3.100 EMA on 5min-4 hr have remained well above the price which reflects the strength of the down move. In my opinion any rallies will be absorbed ahead of the EMA (based on 30min-1hour charts)
4. NEVER FIGHT A TREND when a move such as what took place yesterday happens, it is always wise to follow in the same direction. Simply put, "the trend is your friend" as the much repeated saying goes.
Due to the pair breaking through support in the 129.00 region, the range between 130.00 - 129.00 has broken to the downside. Resistance now lies in the 128.80 area but pressure seems strong enough that we may not reach that level. A break of 129.00 could bring 129.50-129.60 into play fairly fast, which is why I have placed my SL close to that level. There are not many indicators that can help to predict price movement from this level so this is strictly a momentum catching trade. Here are some of the factors for which I prefer the short side:
1. Breaking of support first at the 129.40 level than again in the 128.90 level indicates that longs are bailing out and bears are gaining momentum. The lack of bounce at these levels also signals a strong bearish sentiment.
2. Next support rests in the 127.80 zone which should be where sufficient buy orders are placed due a seemingly strong trendline that lands in the area. Since this latest move looks like a sharp one, I would guess that the pair will test this area.
3.100 EMA on 5min-4 hr have remained well above the price which reflects the strength of the down move. In my opinion any rallies will be absorbed ahead of the EMA (based on 30min-1hour charts)
4. NEVER FIGHT A TREND when a move such as what took place yesterday happens, it is always wise to follow in the same direction. Simply put, "the trend is your friend" as the much repeated saying goes.
Sunday, September 12, 2010
FOREX DOJO TRADE # 6
Tonight I will sell GBP/JPY @ 129.94(pending) with TP 129.45 and SL 130.44.
My strategy to sell is based on the triangle showing up on the 4 hour chart. I will sell at the top of the triangle in the 129.90-130.00 region with my TP set around the bottom at 129.40-129.50 zone. In addition to this shape the reasons I prefer the bears tonight are:
1. Resistance after 130.00 lies in the 130.30 region where the 100 EMA comes on the 4 hour chart. The EMA should also provide good resistance at those levels.
2. Divergence on the 5 minute charts is pointing to reversal on the intraday swing up which I anticipate to end in the 130.00-130.30 zone
My strategy to sell is based on the triangle showing up on the 4 hour chart. I will sell at the top of the triangle in the 129.90-130.00 region with my TP set around the bottom at 129.40-129.50 zone. In addition to this shape the reasons I prefer the bears tonight are:
1. Resistance after 130.00 lies in the 130.30 region where the 100 EMA comes on the 4 hour chart. The EMA should also provide good resistance at those levels.
2. Divergence on the 5 minute charts is pointing to reversal on the intraday swing up which I anticipate to end in the 130.00-130.30 zone
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