GBPUSD 12-22-06

12-22-06

GBPUSD

There was a long breakout trade at 1.9650 on Wednesday afternoon, and a short trade triggered in the GBPUSD at 1.9697 yesterday morning. The first target on the long was at 1.9697 to reverse to a short. The first target of 1.9650 on the short trade, and the second target of 1.9600 were reached and the trade was closed at 1.9570. The GBPUSD has formed an area of breakout support at 1.9620 this morning and is ready to move back toward the top of the range. You can enter a long trade at 1.9632 with a first target of 1.9697 to exit and go flat. That area of supply should cause a sell off again, but this time I will only enter a short trade with a sell stop at 1.9696 if the GBPUSD trades up to 1.9710 before reversing lower. I will exit at the first target of 1.9634. That 1.9634 area should produce a bounce the first time it is tested if you feel like trading all day today.

EURUSD 12-22-06

12-22-06

EURUSD

There was a long trade triggered in the EURUSD from the email on Wednesday afternoon at 1.3276 since it was a breakout trade that was ready to happen while I was writing the email. There was a pullback after I sent the email to 1.3175 for entry, but if you took the second pullback to 1.3175, it was a 10 pip loser since the EURUSD extended the range down to the 1.3150 area. The first target was reached at 1.3298. The EURUSD has traded in a range between 1.3206 and 1.3150 now for the last two days. It has formed the same area of breakout support at 1.3175 to buy on a pullback, and the area of supply at 1.3206 is going to be tested for the second time. I will pass on trading this small range for today. If you decide to trade the pullback to 1.3175, use a buy stop at 1.3176 once the EURUSD trades below 1.3175 and a 10 pip stop loss after entry, Your first target is 1.3206 and the second target is 1.3219. Move the stop loss to entry after the first target and to 1.3190 after the second target.

USDCHF 12-22-06

12-22-06

There was a short trade triggered in the USDCHF at 1.2203 on Thursday morning. The first target of 1.2150 was reached. If you trailed your stop tight, you may have been stopped out on the bounce to 1.2180 since I did not give specific targets past 1.2150. If you still are short, move your stop to 1.2180. The next target is 1.2117. Move the stop to 1.2151 after the 1.2117 target is reached.

USDJPY 12-22-06

12-22-06

USDJPY

The USDJPY is still in the 1.1820 to 1.1850 range. I am still not interested in trading the USDJPY.

EURUSD 12-21-06

12-21-06

EURUSD

I have to go somewhere early tomorrow morning, so I am doing the Thursday update this afternoon. The EURUSD sold down to the 1.3172 area and it is basing for a move higher. Either buy the breakout if you trade this afternoon, or the pullback to 1.3175 if the breakout happens before I finish this email. The first target is 1.3198 and the second target is 1.3219. Move the stop to even after the first target and to 1.3190 after the second target is reached. This looks to be a possible pullback to the higher EURUSD from here entry for those of us that missed the weekly bottom trade. In case it is not, trail your stop tight so that, at the very least, it is a profitable trade.

GBPUSD 12-21-06

12-21-06

GBPUSD

If you were brave enough to buy the pullback to 1.9703, you got a small gain up to 1.9725 depending on the time you bought it. The buyers finally were absorbed, and the GBPUSD has moved down to the 1.9632 breakout area. It is getting ready to rally out of this area right now, but it has a fresh area of supply at 1.9697. I am going to trade long right here at 1.9650 and then I am planning to short that 1.9697 area if the GBPUSD rallies straight up to the area without basing anywhere near it. Those are my two trades for Friday.

USDJPY 12-21-06

12-21-06

USDJPY

The USDJPY is basing near 1.1850 since it finally absorbed the sellers at 1.1825. If it rallies, it has sellers at 1.1883. Since it took three days to take out the sellers at 1.1825, it may be a while to take out the supply up here at 1.1850. It could slip down to the 1.1820 area and rally back up to the higher range instead. The range is too narrow for me to trade.

USDCHF 12-21-06

12-21-06

USDCHF

No short trade at 1.2206 on Wednesday. Looks like the USDCHF is already running out of gas at 1.2188. It should bounce at 1.2150.
If it does rally up to 1.2206, I will still take the short with a first target of 1.2150. Use tight stops in case there is another bounce at 83.33 in the US Dollar Index or a big bounce in the USDCHF at 1.2150.

GBPUSD 12-20-06

12-20-06

GBPUSD

The pullback trade to 1.9470 never happened yesterday. I mentioned that the GBPUSD had moved above the moving average on the 60 minute chart and a breakout trade above 1.9500 was possible. That should have been the trade I took. The move above the MA and the highest high in the trading range + 1 pip is normally the trigger I use as a way to make my trading as mechanical as possible. Find a trigger to enter your trades and stick to it. That way, you take the emotions out of the decision to enter and, over time, you are able to measure your results based on your setup and trigger. For today, I will let the GBPUSD which has already moved over 50 pips base near the area of supply at 1.9750. The breakout area at 1.9700 would be a good place to enter on a pullback if it was near the bottom of the range instead of the top. With the US Dollar near support, I would be careful if you do trade that pullback this morning. Use a buy stop at 1.9703 once the GBPUSD trades below 1.9696, and a 10 pip stop after entry. Trade small in case the bounce in the dollar is big.

EURUSD 12-20-06

12-20-06

EURUSD

As Maxwell Smart once said, " missed it by that much". I waited for the pullback that never came. I did not want to take the breakout trade at 1.3106, so I missed a great opportunity to enter the EURUSD at the bottom of the weekly range, and I passed on a breakout past the first area of supply yesterday morning. In defense of myself, I can chalk it up to the near impossibility of a single person to trade a 24 hour market for missing the weekly low at 1.3051. The pullback trade would have been the safer entry, but you need a breakout strategy in the currency markets to catch big moves like the one from yesterday. Anyway, the EURUSD will need to base near the 1.3240 area before it attempts to move higher to the next area of supply at 1.3265. It has already moved up 30 pips overnight, so that should be the range it trades in for the balance of the morning today. I will let the EURUSD base today and see if it stays up here or if the US Dollar Index bounces off the 83.33 breakout support area and brings the EURUSD down to the 1.3170 area instead.

USDJPY 12-20-06

12-20-06

The USDJPY traded in a whopping 30 pip range yesterday. Since it has based near 1.1825 for the last three days, the short trade at 1.1850 is out. The USDJPY is either going higher to trade in a 25 pip range between 1.1825 and 1.1850, or it will base here for another day.

USDCHF 12-20-06

12-20-06

USDCHF

There was no short entry at 1.2237 yesterday in the USDCHF. Once the USDCHF slipped below the 1.2212 breakdown line, it kept falling all the way down to the third target of 1.2125. If it rallies up to the 1.2212 area, I will short it. I am not interested in any long trades for the time being.

USDJPY 12-19-06

12-19-06

USDJPY

There was no short trade entered yesterday at 1.1850 in the USDJPY. The high on the day was only 1.1829. The 1.1785 breakout area was as far as the sell off went. I would still be interested in shorting the 1.1850 area as long as the USDJPY does not base above 1.1825. The 3 to 1 risk to reward on the counter trend short trade will only work if the USDJPY bases below 1.1820 using a 10 pip stop loss. The USDJPY is on the wrong end of the supply, demand curve for a long entry.

USDCHF 12-19-06

12-19-06

USDCHF

There was no trade recommendation yesterday in the USDCHF. The USDCHF traded in the 1.2193 to 1.2265 range yesterday after the area of supply at 1.2225 was absorbed. If it trades up to the 1.2237 area today, I will short the USDCHF with a 10 pip stop loss and a first target of 1.2193 and a second target of 1.2170. My third target is 1.2125.

GBPUSD 12-19-06

12-19-06

GBPUSD

The GBPUSD pullback long trade at 1.9515 was triggered on Sunday evening, and the first target was reached at 1.9560 early Monday morning. If you moved your stop loss to even, and left your stop loss at even after the first target was reached, you were stopped out on the rest of the position as the GBPUSD traded down to the bottom of the weekly range near 1.9440. The GBPUSD has rebounded back to the 1.9500 area, and is above the moving average this morning. It may breakout above 1.9500, or it may stay in this range for another day. If the GBPUSD pulls back to the 1.9470 area, I will go long at 1.9570 with a 10 pip stop loss and a first target of 1.9520 and a second target of 1.9550. Move the stop loss to even after the first target and to 1.9490 if the second target is reached. The third target is 1.9600 to exit and go flat. I will trade the 1.9500 to 1.9600 trading range if the GBPUSD breaks above 1.9500 today instead of pulling back to the bottom of the current trading range.

EURUSD 12-19-06

12-19-06

EURUSD

There was no trade recommendation yesterday in the EURUSD. The EURUSD did trade in the 1.3063 to 1.3104 range as expected, and it extended the top of the range to 1.3118 and the bottom of the range to 1.3051. This range looks like it may hold again for today, but the next move at this end of the supply, demand curve is up. The 60 minute moving average has reached the trading range, so a breakout above 1.3107 is possible. That is the picture that is forming on the 180 and 240 charts. I am hesitant to trade any breakouts with the markets being thin and would prefer to buy pullbacks today. Here are the two pullbacks I will trade today. If the EURUSD pulls back to the 1.3072 area, I will go long with a 10 pip stop loss after entry and a first target of 1.3106. The second target is 1.3140. Move the stop loss to even after the first target, and to 1.3094 after the second target. If the EURUSD breaks out above 1.3107 as evidenced by a close of a candle above 1.3107 on the 180 or 240 chart, I will buy a pullback to that 1.3100 breakout area, and I will trade the 1.3100 to 1.3200 trading range going forward. My first target will be 1.3140 and the second target is 1.3170. Move the stop loss to 1.3130 after the first target. The next area of supply at 1.3200 is the third target for now.

USDJPY 12-17-06

12-17-06

USDJPY

There was no trade in the USDJPY on Friday. The last line from the email on Friday mentioned a possible sharp sell off in the USDJPY if it traded near the 1.1835 area since it has been trading in an area of supply from the weekly chart. The sell off reversed when the 1.1740 area of support was reached, and the USDJPY moved back above 1.1800 by the end of the session. Any pullbacks should find support near 1.1770 followed by 1.1712 from the 240 chart below. I would be interested in shorting a rally up to the 1.1850 area with a first target of 1.1810 and a second target of 1.1773 and a third target of 1.1712 to reverse to a long.

USDCHF 12-17-06

12-17-06

USDCHF

There was an opportunity to trade the first trade from Friday's email which was a breakout trade above 1.2155 early on Friday. The short trade at 1.2226 was also possible on the rally from the area of demand at 1.2114. I forgot to mention trading the 1.2123 - 1.2114 pullback trade, but the picture in the email from Friday shows the area. What you are looking at is a currency trying to absorb the area of supply at 1.2226 for a move higher. If there is too much supply at 1.2226, the USDCHF will sell off to the breakout area at 1.2193. I will let the USDCHF trade in this narrow range for a day or two while the moving average catches up to the trading range. I would not buy a pullback to the breakout area at 1.2193 since the area of supply at 1.2226 is so close and the USDCHF is at the wrong end of the curve for a long entry.

GBPUSD 12-17-06

12-17-06

12-17-06

GBPUSD

There were two opportunities to trade the GBPUSD on Friday. Here are the trade recommendations from Friday's email:

"Enter a short trade at 1.9671 on a rally this morning with a first target of 1.9620 and a second target of 1.9570. The third target is 1.9515 to reverse to a long position. Move your stop to even after the first target and move the stop to 1.9600 after the second target is reached in case the 1.9570 area of support holds. The 1.9515 area of breakout support should be where the GBPUSD bottoms per the 240 chart if the 1.9570 area of support does not hold.
Use a buy stop to enter once the GBPUSD trades below 1.9515 and a 10 pip stop loss after entry with a first target of 1.9560 and a second target of 1.9600. Move the stop after the first target to even, and to 1.9560 after the second target. We will try to ride the GBPUSD back to the top of the range."

The area of supply at 1.9671 was not quite reached on Friday morning probably because the EURO reached the 1.3171 area of supply first. If you stuck around, you did get a chance to trade the long entry at 1.9515 a couple of times on Friday. If you are still long, follow the recommendation above again. The same thing will work if you are flat.

EURUSD 12-17-06

12-17-06

EURUSD

There was a long trade triggered in the EURUSD on Friday morning at 1.3100 which was exited at the first target of 1.3140 and the second target of 1. 3170. The EURUSD sold off after reaching the 1.3184 area of supply and resumed the move down to the weekly low. The close on Friday afternoon was just below the weekly chart low of 1.3095. The new weekly candle needs to close above the bottom support line of the chart at 1.3095 to re-enter the weekly 1.3095 to 1.3364 trading range and resume the move back to the top end of the range. It will be a slow grind since the US Dollar Index has an fresh area of demand at 83.50 to pullback to. For Sunday and Monday, I expect the EURO to trade between 1.3063 and 1.3104 with a close above 1.3095 a sign that the bottom of the range is in. I will wait for a day to allow the 60 minute moving average to cycle down to the trading range before trading the EURO long.