USDJPY 12-8-06

12-8-06

USDJPY

The USDJPY has based below the 1.1549 area of supply and has formed a breakout area of demand at 1.1526. Since the USDJPY is above the moving average on the 60 minute chart, the 3 to 1 risk to reward counter trend short trade at 1.1549 is out. The most important part of the picture of the chart below is that the low end of the range was raised up from 1.1456 to 1.1474 yesterday. If you do trade the NFP report today, watch the 1.1605 area as resistance on a long trade and watch for a bounce at 1.1491 on a short trade.

USDCHF 12-8-06

12-8-06

USDCHF

The trading range between 1.1915 and 1.1952 that I passed on trading yesterday in the USDCHF is a little wider today. The low was 1.1915 yesterday, and the top of the range was extended to 1.1972. I am going to pass on trading the USDCHF for the NFP report. I am still interested in shorting 1.2056 when the USDCHF trades up to it.

GBPUSD 12-8-06

12-8-06

GBPUSD

The short trade at 1.9722 was not entered yesterday, as the best that the GBPUSD could do was a high of 1.9710 for the day. I would be careful with the NFP report trade because the areas of supply and demand on the chart below are both fresh. In other words, you may enter and have a violent reversal and a large loss if the spike up hits 1.9723 or the spike down hits 1.9572 and you enter in the direction of the spike. I have seen that happen many times. I will pass on trading the GBPUSD for just that reason. Use the areas I have marked off as places to take profits if you do try to trade the NFP report.

EURUSD 12-8-06

12-8-06

EURUSD

There was no trade in the EURUSD yesterday. The EURUSD never reached the 1.3334 supply area before selling back down to the bottom of the range, so the pullback trade at 1.3215 was negated. The area of supply at 1.3324 made the pullback trade a less than 2 to 1 risk to reward entry which is why I wanted to see the EURUSD trade up to 1.3334 before I would buy a pullback to 1.3315.

Today is the NFP report which has the potential to cause wild swings, and will probably cause both a spike higher into the areas of supply at 1.3314, 1.3324, 1.3334 and 1.3360 and possibly a spike lower to the area of demand at 1.3247. None of the areas of supply are fresh. The area of demand at 1.3247 is fresh, and I would be interested in a possible long trade if the EURUSD spikes down to that 1.3247 area and then reverses higher. Watch for a spike candle that closes off the low and above 1.3247 before your long entry and set a stop just below the low of that spike candle. Keep trailing your stop as each level of supply is approached. The next area of supply to worry about is 1.3385 which is not very far above the 1.3360 area. Tighten your stop loss up to avoid a whipsaw once that 1.3385 level is visited. A drop below 1.3360 would be where I close the long trade.

EURUSD 12-7-06

12-7-06

EURUSD

Yesterday we missed our long entry at 1.3247. The area near 1.3247 has quite a bit of demand since the buyers in the area were willing to pay up to 1.3254 to buy EURUSD in the auction process. Anyone who trades with buy and sell stops will often miss these trades, but I will make a note that the 1.3247 area is a very good place for a long entry in the future. This morning, the EURUSD is working on forming a breakout area at 1.3215. If the 60 minute candle closes above 1.3215, it will be an area to buy on a pullback for a move to the top of the range at 1.3362. I would buy the pullback if the EURUSD can trade up to 1.3334 before the pullback.

GBPUSD 12-7-06

12-7-06

GBPUSD

The GBPUSD long trade from 12-5-06 was exited at 1.9719 yesterday. The sell off extended the big trading range lower to 1.9614. The big trading range is 1.9814 to 1.9614. There are several small areas of breakout demand and breakdown supply inside the big range to trade between today. This morning, the GBPUSD is back above 1.9700 and has an area of supply at 1.9723 and another area near 1.9750 ahead of it.
Since we are back to range trading, I will enter a short trade at 1.9722 with a sell stop once the GBPUSD trades above 1.9730 as long as it does not trade above 1.9740 first. If that happens, I will short the higher area of supply near 1.9750 instead. If the GBPUSD reaches 1.9750, I will enter the short trade at 1.9748 with a sell stop. My target to cover the short will be the breakout area of demand at 1.9670. The 1.9670 would be a good area to enter a long trade if the area of supply at 1.9723 is reached on a spike higher. It is also possible that the GBPUSD will base just below the 1.9700 area in which case the short trade at 1.9723 is out, and the 1.9750 short will have a target of 1.9693 as a place to cover. For now, the next long will be at 1.9670.

USDCHF 12-7-06

12-7-06

USDCHF

The breakout long trade in the USDCHF happened early yesterday morning. The entry price was 1.1934 which was 1 pip above the moving average, and the exit was at the 1.1983 breakdown area. That 1.1983 area has been tested three times this week and was where we entered a short trade on Monday when it was tested the first time. The small trading range is narrowing and it is nowhere as large as the small trading range in the GBPUSD. The breakout area of demand at 1.1915 and the new breakdown area of supply at 1.1952 is too narrow of a range to trade for me. You are welcome to trade it. I will wait for a day to see if the range is extended. It is possible that the bounce in the dollar may be over if the bottom of the range is extended below 1.1879. The reverse will be true on a move past 1.1983. Since the breakdown area at 1.1952 has formed, I am leaning toward another move down in the dollar resuming.

USDJPY 12-7-06

12-7-06

USDJPY

The short trade at 1.1550 was missed yesterday when the USDJPY ran out of gas at 1.1536. I hope we get another shot at it, but it is not looking like that will happen any time soon. I am not interested in a long trade since the area of support at 1.1450 has been tested twice already and there is a new breakdown supply area at 1.1500. You are welcome to trade that range today, but I will pass.

GBPUSD 12-6-06

12-6-06

GBPUSD

A long trade was entered yesterday at the 1.9690 area and it will be closed out if the GBPUSD closes below 1.9720. With the dollar in daily support, I will hold off on any long trades in the GBPUSD for a few days to see what kind of bounce the dollar gets.

EURUSD 12-6-06

12-6-06

EURUSD

The EURUSD is still in the same range as yesterday between 1.3362 and 1.3294. The area of supply inside the range between 1.3320 and 1.3334 may turn the EURUSD down to extend the bottom of the range. I see that the US Dollar Index came into an area of support on a daily chart at $82.25 which may lead to a significant bounce for the dollar. I will hold off on any long trades until the 1.3250 area in the EURUSD.

USDJPY 12-6-06

12-6-06

USDJPY

The USDJPY had a big bounce yesterday at the 1.1450 area. There is an area of breakout demand at 1.1472 that formed inside the big range between 1.1550 and 1.1450. That will be the first target for now on the short trade at 1.1550 unless another area forms higher in the range.

USDCHF 12-6-06

12-6-06

USDCHF

No trade in USDCHF yesterday. With the dollar being in an area of daily demand and the moving average close by, the next trade should be a breakout trade in the USDCHF above 1.1932 with a first target of 1.1983 and a second target of 1.2022.

GBPUSD 12-5-06

12-5-06

GBPUSD

The GBPUSD long trade on a pullback to 1.9802 never happened on Sunday, since the GBPUSD opened at 1.9785 on my platform. The vertical movement has stopped for the time being and the GBPUSD is trading in a range between 1.9734 and 1.9814. I am going to wait until the range is extended lower to the 1.9690 breakout to enter a long. My first target will be 1.9755 an the second target will be 1.9814.

USDJPY 12-5-06

12-5-06

USDJPY

No short trade in the USDJPY yesterday at 1.1606. The USDJPY traded in a range between 1.1580 and 1.1550 and formed a stage 3 breakdown area at 1.1548. I will look to short the 1.1550 area if the USDJPY can trade down to the 1.1450 area before it bounces. The thin market makes the distance between the areas of supply and demand and the profit zone more important.

USDCHF 12-5-06

12-5-06

USDCHF

The USDCHF short trade at 1.1983 was entered on 12-4-06. The trade was exited at 1.1930. With the EURUSD and GBPUSD reverting to trading in trading ranges I decided to exit the trade as soon as the other pairs came into support. The next place I will enter a short trade will be at 1.2056. The first target will be 1.1980. That range trade may be exited at any time like the one from yesterday. Trail your stop after entry since this market is thin, and the currency funds will be taking profits during the month. That means they will buy dollars aggressively for any reason.

EURUSD 12-5-06

12-5-06

EURUSD

The first trading day of December for me was mixed. The EURUSD opened the day higher and hit the area of supply near 1.3360. The bounce at 1.3325 never happened, so the long trade was stopped out -10 pips. The EURUSD is trading in a range between 1.3335 and 1.3290 so far this morning. If the 60 minute candle closes below 1.3315, the EURUSD will possibly extend the trading range lower to the breakout line at 1.3271. I will wait for the range to extend to the 1.3250 breakout area to enter a long since the areas between the buyers and sellers are narrowing. Since we are in a range again, my first target on the long trade will be 1.3315 and the second target will be 1.3335.

EURUSD 12-3-06

12-3-06

EURUSD

Sorry for missing Friday, but I had issues due to the snow storm. The EURUSD is close to the 1.3400 area of supply that extends up to the old high of 1.3666. The first place I would watch for selling to come in is between 1.3377 and 1.3420. I would use that pullback as an opportunity to enter a long at 1.3325. My first target would be 1.3420 followed by 1.3480. I would hold the last contract for a run up to the old highs with a wider stop to avoid being taken out again.

GBPUSD 12-3-06

12-3-06

GBPUSD

The move higher in the GBPUSD has been amazing. The question is do we take a breakout first thing this afternoon, or do we wait for a
pullback to 1.9802 to happen after the breakout. The answer may be academic depending on what time your platform opens for trading.
If it is like last Sunday, the GBPUSD could open 50 pips or more higher at 4:00 PM Eastern time with the traders from 1:00 PM pushing it up.
The pullback to 1.9802 will be where I next enter a long trade in GBPUSD with a first target of 1.9850 and a second target of 1.9900.
We will try to hold the last contract with a wide stop loss since the areas of supply above are from 14 years ago. I am more concerned with the currency funds selling to lock in yearly gains.

USDJPY 12-3-06

12-3-06

USDJPY

The last email was on 11-30-06 due to the snow storm. Here is what it said to do and what happened:

11-30-06

"USDJPY

The short trade was finally entered at 1.1650 and the first target was reached at 1.1610. Let's move the stop loss on the other two contracts to 1.1630. This should be safe in case the USDJPY tries to rally past 1.1620. If it does rally past 1.1620, it will try to absorb the supply at 1.1650 again. If the area of supply at 1.1620 turns the USDJPY lower, take a profit at 1.1578 and move the stop loss to 1.1610 on the last contract."

The short trade was exited on 11-30-06 at the 1.1578 profit target and closed at the 1.1610 trailing stop. The USDJPY rallied up to the 1.1637 breakdown line on 12-1-06 and collapsed down to 1.1500.

I would be interested in shorting the breakdown area of supply at 1.1606 if the USDJPY can rally up there. My first target will be 1.1535 and the second target is 1.1500. Move the stop loss to entry after the first target is reached, and to 1.1551 if the second target is reached. Watch out for currency funds booking profits. Use a 10 pip stop loss after entry, and try to enter with sell stops once the price touches the breakdown line.

USDCHF 12-3-06

12-3-06

USDCHF

The last time I sent an email on USDCHF was on 11-30-06. I mentioned an area of demand at 1.2040 inside the big trading range between 1.2000 and 1.2100 that could produce a bounce. That bounce at 1.2040 did happen, but as soon as the USDCHF hit the 1.2072 breakdown area, it was look out below. Unfortunately, I did not mention taking a short trade at 1.2072 in the first email, but I did mention it to the traders in the forex chat room later that morning. There has been no let up in the selling of the USDCHF since, and no other pullbacks to enter a short since the start of the recent move down. I would enter a short trade at 1.1986 if the USDCHF manages to rally up to that breakdown area. The first target is 1.1900 and the second target is 1.1850. Use a 10 pip stop loss after entry and a sell stop to enter the trade after the USDCHF trades above 1.1983.