ETMA_The Evolution

Here we go, German Ifo Business Climate came less than expected so support was broken, hold on its gonna be a rough ride, that's 2 pinbar that didn't work, imagine the sell orders placed on this level, anyway the bulls tried including a lot of decent analysts that i know but failed , now the bears are taking over and of course the once bulls now turning to bears to join the ride.

Target, at least 3505.

Best,
B.R.

Back in the weekly Channel, NZDUSD.

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Breaking UTL After being rejected from a important weekly resistance, AUDUSD.

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Back in the range after the support rejection, USDJPY.

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The Euro, sell in may and go away, notoriously known for topping in May - June, broke and closed under 2 Bullish pinbars.

https://media.dailyfx.com/illustrati..._Picture_7.png


The USDX Broke an important down channel up and resistance and closed over it, worth a mention.

Have a nice weekend.
Best,
B.R.

Catch up on the Fundamentals.
http://www.mauldineconomics.com/ttmy...erpants-gnomes

Daily Double top and being broken, now what ?, shorting with the projection of the Double top downward is my target, needs patience, a lot of patience to materialize, one should have his eyes on the goal through ups and downs distractions or noise, let's see.

Another Decsending triangle is building on Silver and the breakout is around the corner, are u prepared.

A Strategy for Silvers Next Breakout
By Walker England, Forex Trading Instructor ------- 27 May 2014 19:00 GMT http://www.dailyfx.com/design/fxcm/img/common/blank.gif
Talking Points:

Silver is currently trading well under the 200MVA

1. Triangles allow traders to prepare for a breakout
2. Risk and reward levels can be managed using support & resistance

Silver (XAG/USD) prices have been consolidating after a continued decline during the 2014 trading year. As prices now move in a descending triangle pattern, traders wait for their next entry with the trend. Today we will review how to approach the current price pattern and plan for silvers next big breakout. Let’s get started!


Silver and the 200MVA

The 200 period moving average (MVA) is a simple technical tools that can be designated to help traders identify the trend. For example if prices are declining faster than the 200 period MVA and trading beneath the technical indicator, traders can interpret this as a downtrend.

This is exactly the case with silver, as displayed below on the daily chart. The metal has been trading underneath the 200 MVA now for the better part of the last fifteen months. Knowing this, traders looking to enter into the trend can wait for opportunities to sell the market.


https://media.dailyfx.com/illustrati..._Picture_3.png
Planning for a Breakout

Now that we have a directional bias of the trend using the 200MVA, we can use this in conjuncture with other techniques find opportunities to sell the market. Below you will see a series of trendlines added to the silver daily chart to form a descending triangle. This price pattern is formed by first finding a series of lower highs, which can be connected to form a descending trendline. As shown below, this line has been created by connecting two previous highs on the metal.

Next, trend traders will look for opportunities to sell silver as long as price for the metal continues to decline under resistance. Due to the definition of a trend, gold must create a series of lower lows in order for the current downtrend to continue. This will allow traders to first target the next value of horizontal support near $18.49. Breakout traders will wait patiently to enter the market only once this value has been breached.


https://media.dailyfx.com/illustrati..._Picture_2.png
Managing Risk

As with any trading strategy, trading breakouts carry risk. Most risk is associated with a false breakout, and traders should be prepared for this scenario through the use of a stop order. One easy way to manage riskwhen trading a triangle is to place your stop between the previously identified levels of support and resistance. In the event of a breakout and price moves back inside the triangle, any existing sell positions should be exited.

Now that you are more familiar with the key price levels on silver, you can practice trading the metal on a demo account. You can get started following gold prices and your favorite currency pairs such as the EURUSDwith a Free Forex Demo with FXCM. This way you can develop your trading skills while tracking the market in real time!


https://media.dailyfx.com/illustrati..._Picture_1.png


Courtesy of Daily FX, Walker England, Trading Instructor @ FXCM.

The Non stop party, i need to be more patient with my entries, all my trades went my way but only after giving me a 4-5 days of nerve wrecking PA, conclusion = i figured the trend direction right but much too early.
GU, the bear flag continuation and the breakdown of multiple short term support.

Best,
B.R.

Worth of a post : How Highly Correlated Equity Markets Can Lead To a Currency Trade

Talking Points:

1. The High Correlation of JPN225 to USDJPY
2. Bullish Key Week on Nikkei 225
3. USDJPY Implications

Many of the major markets are becoming increasingly correlated. In fact, it’s tough to get a feel for currencies or commodities without checking the bond market and stock market as well. While some markets are more closely related than others, one equity market has held an amazingly tight correlation to a currency pair for a very long time.


The High Correlation of JPN225 to USDJPY
https://media.dailyfx.com/illustrati..._Picture_1.png

Visually, it’s easy to see that, ‘as goes the Nikkei, so goes USDJPY’. If you’re comfortable with the correlation coefficient reading, since the beginning of May, USDJPY has been positively correlated to the JPN225 or Nikkei by a matter of 0.821. If you’re not familiar with the correlation coefficient, it is a statistical number between -1 & +1 calculated to present the linear depending of two variables. 1.0 is a perfect positive correlation and -1.0 is a perfect inverse correlation. Anything above 0.5 or below -0.5 is considered a significant correlation, including of course, USDJPY & JPN225 at 0.821.

Because traders are always working to build an edge, we can look for signs of strength in one to help us see upcoming strength in the other. Let’s breakdown some of the developments in both markets and specifically the JPN225 to see what may be on the horizon for the JPY crosses.

Bullish Key Week on Nikkei 225 & More!

A lot of bullish developments on the JPN225 were formed on the close of the weekly candle. Let’s break them down before talking about their currency implications:

https://media.dailyfx.com/illustrati..._Picture_3.png

The first thing that many traders look for on a chart is a price action signal. One of my favorite signals is known as a Bullish Key candle where the candle pushes lower than the prior low but closes higher than the prior candle’s high. This is additionally important if the low is a new low for a significant period of time or of significant support which you can see is true on JPN225 above.

If you’re unfamiliar with reading price action, you’re not alone and you can register for our free online price action course here.

Secondly, you’ll notice a cloud on the chart below price. This cloud is part of the dynamic Ichimoku indicator.In uptrends, Ichimoku’s cloud will often act as support and in downtrends, Ichimoku’s cloud may act as resistance. Given the bullish key week off the weekly cloud touch, that adds significance to the move.

Lastly, you’ll see a trendline drawn from the high from the start of 2014. Price has stayed below this trendlineon a closing basis until last week’s close. Trendline breaks are simple ways to see that if nothing else, a trend is losing momentum and could soon be reversing.
Now that we’ve seen three components that argue for further upside in the JPN225, let’s see how this could apply to Forex given the high correlation earlier discussed.

USDJPY Implications
https://media.dailyfx.com/illustrati..._Picture_4.png

The USDJPY has yet to move as explosively higher in the same way as JPN225. However, upon close look, you’ll see there are budding developments on USDJPY that could bring opportunity to buyers. Let’s have a closer look on a tighter time frame.

Learn Forex: A Closer Look at USDJPY
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USDJPY is not without its positive signs. We’ve had a bounce similar to the Oct. ’13 low which resulted in a 900+ pip push higher. Last week, the Bank of Japan Governor, Kuroda mentioned that he didn’t see JPY strengthening against the USD (read: doesn’t seeing going lower) and he commented on the “very strong” economic recovery in the US vs. the one in Japan.

However, with the evidence in favor of upside, let’s take a look at the chart resistance ahead. There is a cluster of resistance point between the May 13th high of 102.36 & the May 2nd high of 103.02. If we can have a weekly close through these levels, then a retest of the prior highs could very well be under way. If price stays below these levels, it would appear that the correction still needs to complete before moving higher.

Happy Trading!

This was my long time experience also with the Nikkei and the UJ.

Best,
B.R.

GU, Daily stat.

GBP/USD Former Support Now Resistance Near 1.6760

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GBPUSD broke the line that extends off of the November and February lows. The development is the clearest signal yet that an important top is in place.

EUR/USD Sitting on 1.3560/90 Reaction Zone; 1.3670 is Resistance

Daily

https://media.dailyfx.com/illustrati...Picture_10.png

The sharp EURUSD reversal supports the long discussed ending diagonal (wedge) interpretation. Diagonals are often fully retraced (sometimes quickly), which yields a target of 1.3294.

Enjoy.

USDOLLAR Former Resistance Serves as Support
Daily

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AUD/USD Trendline Confluence Near .9375 on Friday
Daily

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-“AUDUSD didn’t quite trade to .9412 before trading lower. The rate is having issues with .9400 generally (including at the early April top, when the rate closed above .9400 twice before failing).”
My opinion, double bottom and break higher, first target is the top of the range @9376 and if that break on a daily closing basis it opens the way for a more upside move with the 9460 an important headwind or resistance, clearing that the AU will be cruising upward smoothly, however the Weekly tells another story.

B.R.

USD/CAD at its Most Important Juncture Since March
Daily

https://media.dailyfx.com/illustrati..._Picture_5.png

Bottom of the Channel, make or break that is the Question.

-“Channel supports in USDCAD extend from about 1.0780 to 1.0860 (the recent low) this week. 1.0793 also represents the 61.8% extension of the first leg of the drop from the March high.”

-The rate is trading at a major confluence of trendlines. The close this week is important. A new low (below 1.0810) on Friday (on news) and recovery back above 1.0810 would be the perfect way to make an important low heading into a new month.

NZD/USD .8415/35 is a Support Zone
Daily

https://media.dailyfx.com/illustrati..._Picture_7.png

Still holding short.
-“Don’t forget about the line that extends off of the 1996 and 2007 highs. That line crosses through the 2008 and 2011 highs as well. In 2011 (record free float high), the rate surged through the line in late July before topping on August 1st.” That line on the chart is the dashed line and the rate reversed from there last week. This is a great way to make a top.

-RSI (daily) exhibits divergence and the indicator is below 70 (at the peak). The break of .8600 suggests that the rate has topped. .8415/30 is a reaction level. .8600 is estimated resistance.

1 More Pinbar on Daily support level that's 6 times bouncing from the 18.6 - 19 level, the Descending triangle is coming to his Climax end, something got to give, one more time Silver will make it or break it, is it gonna follow the Gold downward or bounce up breaking triangle resistance.

In case of a downward move the projection of the triangle is the 11.80 Level.

I like these words, truly inspirational :

Never forget these wise words: “The phrases gifted musician, natural athlete, and innate intelligence are genetic prisons. Abilities are not set in genetic stone. They are soft and sculptable far into adulthood. With humility, hope and extraordinary determination, greatness is something everyone can aspire to.”

A little History :

Richard Donchian: Top Trader
http://turtletrader.com/images/donchian.jpg
Richard Donchian is known as the father of trend following. His original trend following ideas form the basis for all trend following success that has followed, including Richard Dennis. Donchian’s original methods involved the use of a moving average for the entry/exit indicator portion of his system. Richard Dennis, however, did not use a moving average for entry/exit and concentrated much more heavily on money management than Donchian. Money management accounts for 90% of the Turtle success story. Then once you have that down, your psychology accounts for 100% of your success.
Donchian Biography
From Richard Donchian Foundation:
Richard Davoud Donchian was born in Hartford, Connecticut, in September, 1905, the son of Samuel B. Donchian and Armenouhi A. Davoud, both of whom migrated from the Armenian province of Turkey in the 1880′s. Richard attended public schools in Hartford, the Taft School in Watertown, Connecticut, and graduated from Yale University in 1928 with a B.A degree in economics. Upon graduation, he entered the family’s oriental rug business. Although he appreciated studying about and collecting oriental rugs, he became more interested in the financial markets after reading the book about Jesse Livermore, Reminiscences of a Stock Operator. After suffering personal financial losses during the market crash of 1929, he began his study of technical analysis, believing that only the chartists made sense and money. While continuing to serve as a Vice President of the Samuel Donchian Rug Company, he became a securities analyst and account executive with Hemphill, Noyes & Co. in 1933. During World War II, he participated in the invasion of Sicily and later served as an Air Force Statistical Control Officer in the Pentagon. After the war he returned to the world of investments as a private investment adviser and economic analyst, remaining self-employed until 1960. In 1948 his focus changed from securities to the trading of commodities. He created “Futures, Inc.,” a pioneer publicly held commodity fund, based on the principle of diversification, an idea new in this field. He was later dubbed the ‘father of modern commodities trading methods,” having developed a technical trading method called “trend following,” which presupposes that commodity prices will move in long sweeps like bull and bear markets.
He used a mathematical system based on moving averages of commodity prices. During this period, he authored numerous articles on both securities and futures trading. In 1960 he became associated with Hayden Stone Inc., as Director of Commodity Research. From then until his death on April 24, 1993, he was associated with the various configurations of Hayden Stone and Shearson Lehman Brothers (now Smith Barney) and was a Senior Vice President. Also in 1960 he became responsible for writing a weekly technical newsletter entitled “Commodity Trend Timing,” which he continued to author for 19 years. In 1963 he was awarded a Chartered Financial Analyst degree from the Institute of Chartered Financial Analysts at the University of Virginia. Mr. Donchian was best known for his pioneer work in the field of commodity futures money management. He was a member of the Commodity Exchange, Inc., the New York Cotton Exchange, the New York Futures Exchange, the New York Society of Security Analysts, the American Statistical Association, the National Association of Future Trading Advisers, the Financial Forum, and listed in Who’s Who in America. In June 1983 “Managed Accounts Report” selected him as the first recipient of its “Most Valuable Performer Award,” for outstanding contributions to the field of commodity money management.
Donchian and his Students
Richard Donchian, though now deceased, left many students that still trade or run money management firms. A sampling of his students include:

1. Nelson Chang worked for Donchian: Started Chang-Crowell Corp
2. Robert Crowell worked for Donchian: Started Chang-Crowell Corp
3. Barbara Dixon worked for Donchian: Started Spackenkill Trading
4. Bruce Terry worked for Chang-Crowell Corp

Paul Dean and Brent Elam of TrendLogic had this to say about Donchian and success:
What’s the point? Trading as a trend follower is a learned behavior. Not everyone is going to trade this way. Most people want no more complexity in their life than to buy and hold. Most people don’t want to think or learn about new methods. It takes discipline. But, if the students of Richard Dennis or the students of Richard Donchian don’t provide inspiration as to how important learning the right method is toward achieving success…well buy a mutual fund and shoot for 12% a year.

The beautiful Trend, breaking support one more time.

The Euro is Building base or accumulation in the shadow of the huge Bullish Pinbar.

Following the MPC Official Bank Rate Votes the GU Broke his distribution phase and the Donchian channel downward and begin his markdown run, retest of the broken level is expected, the cci crossed the 0 line down , an H1 and H4 bearish Pinbar is being printed at the close also.

Beware of FOMC Tonight.

Best,
B.R.

What I'm seeing on my H4 TFS (Trend Following System) after the FOMC Minutes Yesterday.

-CL short.
-Gold long.
-Cadchf short
-Chfjpy long breaking
-Gbpjpy short breaking consolidation on resistance.
-Gbpchf breaking short.
-Gbpaud breaking short.
-Ucad rejected from major support on the H4 TF.
-Uchf break support and consolidation so go short.
-Audnzd breaking long after being rejected from support and the formation of a Pinbar.
-Euraud breaking long.
-Eurgbp breaking long in a Bear trend could be a trend changer.
-Eurjpy breaking long from support and consolidation.
-Eurusd breaking high long from support and consolidation.
-Usdx broke lower 7 days ago.
-Gbpusd Invalidate our short signal yesterday and broke resistance today on the H4 TF ( Remember beware FOMC), got tiny room to go up unless it will break W1 Resistance Worth a short if you are a top and bottom hunter, wait for a clue in the shape of a candlestick pattern before shorting.

Best,
B.R.

I agree 100% with this post.
Read it 3 times to understand it well and then go implement it NOW.

Best,
B.R.

Hi Bassramy, can you please post an updated chart of the Eur/Cad with the same template as post#675? I really like those charts! Can you post a 4hr and daily pic of this pair?

Thank you so much!

SC