Intraday Analysis of EURUSD and EURJPY

EU and EJ were the suprise packages for today with both of them showing very good strength as compared to the other currency pairs. EJ has strong support at around 126.4. This needs to be broken for any more movement further down. If this does not get broken, then we could see a slow retracement towards 128 but if this does get broken, we could go down all the way to 125. Considering the strength of the down move so far, this cannot be ruled out.

EU is in the middle of a very strong support region. I say 'region' as there is support all around from this price till down to 1.2820. So, i really dont see EU dropping much more than 80 pips, even if the fall were to continue. EU has broken through a strong support at 1.2940. We will have to see whether this break will hold and if yes, we should see a very slow move to 1.2820 as there is a lot of wood to chop.

Analysis of todays currency movements Part 1

Today, there was a huge fall in a lot of currency pairs and i hope everyone made some nice money. Usually the London session is the one with a lot of action and that was again proved yet again today where all the pairs saw a large drop during that session.

So, now, where do we go from here ? As all regular followers of this blog should already be knowing, i am not one for predicting any long term direction for any pair. I just trade what i see. I try not to have any bias and i just go by the charts and i believe that this is the best way to succeed.

But despite that, lemme try and stick my neck out and see whether i can predict the upcoming direction of currencies.

For GJ, it went down to support at 142.8 and then made a good retracement to 143.8 and now is back to 142.8. Break of this low, is a good confirmation that the downward trend would continue for some more time. This is because, it would then be showing all the trends befitting a trend continuation, which is, break of support, retracement and then continuation with the downward trend. But if 142.8 is not broken cleanly, then we should see some ranging for some time during which accmulation would take place and then we might see a slow movement upwards. But so far, things look like continuing downwards. If it does continue downwards, the first target would be 140.6.

I will analyse the other currencies and post an update in my next post.

An Important Lesson for PA Traders

One of the most important lessons that anyone, who wants to trade using Price Action, needs to learn is the retracement philosophy. Whenever price breaks any support or resistance, 80% of the time , price will retracement back to the support or resistance and it will then continue with the break. For eg, if the price breaks a support, price will retrace back to the support 80% of the time. When the retracement happens, that is your crucial period. If the price retraces back to the support plus or minus a few pips and then continues downwards, thats confirmation of the support break. This is the place where you either take a short or add to the short that you had already taken.

If the retracement pushes back above the support and continues upwards, then that shows that the support break was false.

Intraday movements for EURJPY

All the pairs have had a nice fall so far and i hope that the beginning of this week has provided all of you some good pips. Now let us take the pair EURJPY for our analysis. As posted in the attached 1H chart of EJ, it came down to its strong support at 128.13 and has since bounced. 128.13 is also strong support at higher timeframes and this support needs to be broken for any further down move. London should provide the direction for the next move for the day. On the upside, 128.5 has proved as a resistance so far and the next resistance would be 128.9.

Weekly Outlook for EURUSD

Attached are the daily and weekly charts for EURUSD. As can be seen from the weekly chart, EU broke thru strong support at 1.3184 this week. So, the coming weeks should see a retracement towards 1.318 and then the fall should continue. If the fall does continue, from the daily chart, we can see first support at 1.2950 and then it could go down to 1.27.

I am not sure it will go up too much but if it does start to go up, it should face strong resistance at 1.3184 as it is both a daily as well as a weekly resistance.

Weekly Outlook for EURJPY

Lets move on to the favorite currency for a lot of traders due to its slow and predictable movements, the EURJPY. As can be seen from the daily chart, it has broken thru strong supports and it has good support below at 128.1. This should prove to be a strong support and with strong resistance between 131.25 and 132, i believe that the coming week would see ranging between 128 and 132 for this pair unless something very drastic happens.

The weekly chart shows a strong support at 125 but i doubt whether the price would reach there just yet !!

Weekly Outlook for GBPCHF

Now lets move on to the analysis for GBPCHF. As predicted last week, GC did manage to break the strong resistance at 1.70 and then using 1.7050 as strong support and as a springboard, it leapt to 1.73. Now looking at the daily chart, we can see that its further progress would be hampered by a lot of resistances at the upside. It has a resistance at 1.7330 and then resistance through a previous high at 1.7481 and then a major resistance at 1.7570.

With these resistances above, it would be ideal to day trade this pair rather than look for any swing trade on this pair. Just look for 30-40 pips every time u take a trade and once u get it, run with it.

The weekly chart also shows a strong resistance at 1.7570.