FX pairs about to breakout on the 1H (post yours here too)

Hi there breakout traders and friends.

As a short-term breakout trader I am always looking for currency pairs that are about to breakout from a consolidation area (also called "trading range" or "congestion area"), so I created this thread to alert you of any potential trading range zone that could lead to a breakout on the 1H time frame.

In return I ask you to post your own charts here if you believe that a particular currency pair is ready for a breakout on that time frame.

Remember, currency pairs cannot get stuck in a narrow range forever, sooner or later they break-out one way or the other and never look back.

I will start with the USD/JPY, this baby here is surely up to something, take a look (see chart).



(PS: In case you are wondering why I stopped posting for months, I was simply busy doing research and experimenting with other trading ideas, especially with an ingenious trend and counter trend trading strategy I found on e bay. Anyway, I am back now, thanks to all the FF traders/friends who followed me and subscribed to my threads over the years).

The USD/CAD is also currently stuck in a nice trading range, but for how long...

EUR/CHF cannot make up its mind too.

However, this pair is "weird" and unpredictable so be careful.

Example of a recent breakout on the EUR/USD (1H).

This pair got stuck in a narrow trading range for less than 3 days and then went down like a ton of bricks.

Here is a typical trap breakout on the USD/CHF : the market "breaks" to the downside, traps the short sellers and then breakouts in the intended direction (up).
These false counter trend breakouts are powerful signals if the trader can spot them...

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AN H 1

Welcome aboard TeaTime and thanks for your input.
Yes AUD/NZD seems to be a candidate too, although I do not like that weird move on the chart. It even looks like a complex head and shoulders formation, from both sides (top and bottom), so let's see.

If breakout to the downside a possible target is 1.2750 (about 70 pips lower).

The expected breakout to the upside (most likely scenario in this case) did happen indeed.

Here are the "before" and "after" charts (breakout line is at 109.38).

Hope you made some money on that (still in progress) move.

+50 pips on that USD/JPY upmove (bought at the breakout line at 109.40), selling 50% of my position and moving stop to entry point.
Now keep going you lazy mule.

Come on Yen, give me another 50 pips and then you can go back to sleep.
Chop chop, off you go.

Jokes aside, what I like about this long USD/JPY position is that there is no resistance overhead, at least in the short term.

This is something a trader should be looking for, trades with almost no immediate resistance (for long positions) or support (for short positions) ahead, as these trades offer the best risk/reward ratio.

Think about it, why would you buy a pair when heavy resistance is waiting for you just 5 pips above your entry point (and vice versa for short positions), for example?

Anyway.

The USD/CAD has been stuck in that range for 10 days now.
Notice the fake breakout on the chart (black circle) : two big bullshit bars immediately followed by two bearish bars.

Get ready, the breakout could be huge...

Out at 109.70.
Outcome : +50 pips on half the position and +30 pips on the other half, in less than 48 hours.

The Canadian dollar is going for the breakout (to the downside), or so it seems...

So far the support line is still holding after the FOMC report.

I completely forgot to update this thread, sorry.

Here is what happened as far as the breakout on the USD/CAD (see post above) was concerned.
As you can see, the Canadian dollar finally broke out of its trading range, made a 100 pip upmove and then re-entered the range..

Concerning the AUD-NZD here is what happened.
These type of breakouts are known as double fake breakouts
First a fake breakout to the upside (blue rectangle), then a second fake breakout to the downside (red rectangle).

The second fake breakout was almost certainly generated by the smart money (these guys want to buy big but without "shaking" the market, that's why they need the liquidity provided by unsuspecting short-sellers...). Also notice how the market took off as soon as the short sellers realized they had been tricked.

Astute traders, on the other hand, often buy these fake counter trend breakouts (red rectangle), as soon as they fail.

Hey Mr. breakout!

Your posts is very informative and educational, thanks and keep them coming!

I read from your first post in this thread that you are trading short term breakout.

Do you trade using the hourly as the trend bias and then go to a lower timeframe for entry or do you just take the hourly timeframe breakout and trade it as it is?

And as well, how long do you usually hold a position? Since the breakout could last for a few days to even a few weeks, I assume this is not the usual intraday trading you do with the minutes timeframe.

Looking forward