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GBP/JPY Short Trade EXplained

"The market can stay irrational longer than you can stay solvent" and this aphorism is more true than ever if you look at GBP/JPY. Since mid April this market has gone in straight line for 10 consecutive weeks posting the longest weekly green run since 1995. We didn't had 10 green weekly candle since 1995 when the yen hit a peak of under 80 yen per dollar. Taking in consideration this long stretch and the fact that this pair looked extreme overbought I was expecting to see some retracement a…
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GBPUSD Fractal Map Part 2

Cable's price action looks quite familiar and it's a fractal of the 1992-2000 price action (see Figure 1). We can see that the massive sell off in the 90's resemble the sell off that we had in 2007-2008 and going forward both sell offs have seen a 66 months retracement. Not only that the price action looks similar but also time wise this fractal looks similar. This fractal will suggest that eventually we'll have
to see another major swing low below 1.3490 before the market to enter in the next p…
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Update 6: The market has already broke down to new lows, breaking below last week low of 1.5235. And now we're only 9 pips away from my target to be reach. The 1.5200 is a round number and it's key to break below it. My forecast of 1.5195 is just 5 pips way from the round number and since there are left 2h more until the deadline with the momentum pressing down, there is a change we're going to get even closer to my target

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Using that scale chart and have this accuracy ...... Great : )

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Congratulation : )

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Update 7: At the deadline I had approximately 23 pips deviation, and now 5 minutes after the deadline I'm only 7 pips deviation this is really crazy.

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NZD/USD Bearish Flag (part 2)

This is a continuation post from 2 months ago forecast which has not yet reached the final target projected of the bearish flag formation posted on the weekly chart. NZD/USD is posting and interesting bearish flag pattern on the weekly chart which is basically a continuation move. After we failed to make another high above 0.8850 during the last summer we have sold of without any kind of retracement however this doesn't mean we should have a pullback, quite contrary this bearish flag is absorbin…
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Update 1: Due to the high volatility environment we have now retested the big resistance level of 0.7500. The seasonality pattern is working well so far as we should have expected some kind of traction and upside momentum for kiwi this month but by the end of the month we should see this pair trading lower.

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Update 2: This corrective move is already showing signs of exhaustion as on the weekly chart we have a bearish PB which is a reversal pattern. Once we manage to break and close below 0.7500 big round number we should expect the down trend to resume. Next week resistance should be at 0.7600 round number and left eye of the PB

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GBPUSD Fractal Map

Cable's price action looks quite familiar and it's a fractal of the 1992-2000 price action (see Figure 1). We can see that the massive sell off in the 90's resemble the sell off that we had in 2007-2008 and going forward both sell offs have seen a 66 months retracement. Not only that the price action looks similar but also time wise this fractal looks similar. This fractal will suggest that eventually we'll have to see another major swing low below 1.3490 before the market to enter in the next p…
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Update 2: As expected from previous update 1.5550 has provided a great resistance level and we had a strong rejection. However we need a break below 1.5300 in order for the long term bearish trend to resume.

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Update 3: This week was a formidable week and it has proved once again that my Fractal map is working as we had an incredible 400 pips sell off from the highs. This move is over exaggerated and oversold at this levels and because we couldn't get a close below 1.5000 big round number it may be the case we will consolidate next week between 1.5200 resistance level and 1.5000 support level

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Update 4: As expected we indeed pushed down, however due to the broad base dollar strength across the board the momentum was strong enough to push below the big round number 1.5000. At this stage I'm afraid that we may not see again 1.500 as we have a strong weekly close below this level and also we're closing below an important support level.

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Update 5: Due to extreme volatility environment we have been trading in a very big range with 1.5000 level providing a good resistance level for the time being. As per my fractal model this should have been expected as we're in the blue circle area (see Figure 2).

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Update 6: Even though we're trading still below 1.5000 big round number our fractal map suggest we should see another move higher. so far the fractal map has been quite precise and in this regard we should follow the map. Next week 1.4800 need to act as support and we should see another false breakout above the big round number 1.5000

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NZD/USD Bearish Flag

NZD/USD is posting and interesting bearish flag pattern on the weekly chart which is basically a continuation move. After we failed to make another high above 0.8850 during the last summer we have sold of without any kind of retracement however this doesn't mean we should have a pullback, quite contrary this bearish flag is absorbing all the bids. Usually you measure the length of previous sell off and project that move to the downside in order to find the next leg target.
If we project the prev…
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Update 1: As expected the bearish flag broke to the downside and momentum is accelerating taking us below 0.7500 big round number. But I'm not expecting this move to be smooth and there is plenty of support all the way down to 0.7400 and 0.7300 where we can see a re-bounce back towards the big round number 0.7500

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Update 2: As expected the bearish flag has been working perfectly, however it seems I've been wrong on the speed of the move. Once we broke that pattern the momentum has started picking up to the downside and we broke key support and big round number 0.7500 which was also my target. Based on Elliot Wave we may see kiwi retracing all the way up and retesting the 0.7600 level which is the breakout candle of the bearish flag.

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Update 3: As expected and as per my previous update we indeed continued to retrace further up. The wave sequence from 0.7170 low suggest we should see another marginal high at 1.7580 before to continue down again and complete a WXY type of retracement.

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Update 4: As expected we indeed had a new marginal high at 0.7580 and we had a strong rejection. For Monday we should expect the Friday's high to provide a great resistance zone and we can see kiwi resuming it's down trend. There is plenty of time to reach our target in the first hours of the new session.

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Update 5: We're now at support 0.7515 level(see Figure attached) right ahead of the big round number 0.7500 which should provide good support zone for the entire day, as I'm not expecting any breakout during today. Also to the upside we have another minor resistance level of 0.7540 which should not be broken. Usually kiwi only starts breaking either direction only after the New York session comes in, until that happens we should expect further consolidation. 

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AUD/NZD Multi-Decade Support Level (part 5)

AUD/NZD is approaching a multi-decade support level at 1.0400 which I think will provide some good trading opportunities. In Figure 1 you can see the monthly chart and the strong sell of from the past few months. Since April 2013 after we broke the psychological level of 1.2100 big round number the downward momentum accelerate and we barely see any kind of retracement. But since we hit the 1.0500 level market has started to bottom and move inside some trading boxes, on top of each other. However…
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Update 2: After making a new low at 1.0350 the momentum has started to pick up and we're now in the process of developing the first wave A, correcting the entire structure that started from 1.3780 sell off. The five wave sequence looks completed. For next week we have support at 1.0500 big round number

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Update 3: As expect 1.0500 big round number has provided a good support and right now we're heading for a retest of 1.0755 resistance level. For now the market should be contained inside this two levels. Based on Elliott wave we are forming a flat so we could expect further consolidation

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Thanks!!!

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Update 4: As per my last update we indeed retested previous resistance level and gone beyond that all the way up towards next round number 1.0800, where we had a supply zone. From there we indeed reacted and come back lower towards 1.0600. Right now we're in a much more complex price structure and it may be the case we're doing a double zig-zag pattern, see figure.

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This is a volatile pair so you have all chances to meet your target.Good luck

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Why are XXX/JPY Currency Pairs Rebounding?

Last week I've been giving out my own analysis on the yen pairs,arguing that we may see a rebound in the XXX/JPY currency pairs, you can find my blog post here: Still Confused about XXX/JPY Sell Of? What's next My whole analysis was around the point that Nikkei index which was at an important pivotal point is about to resume the uptrend and thus dragging the XXX/JPY pairs in the direction of the main …
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Still Confused About XXX/JPY Sell Of? What's Next

Still confused about XXX/JPY sell of? Read my blog. If you're confused about recent development in XXX/JPY pairs let me bring some light on what's happening currently with yen pairs. I've been forecasting this retracement in the xxx/jpy pairs since last year, you can check out my blog post here: FX Market Outlook - JPY (part 1)
  • Figure 1. 1989 USD/JPY fractal for today's price action.
I have to admit that I may be wrong and the correction should not be that deep as suggested in Figure 1. B…
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AUD/NZD Trade pattern idea

AUD/NZD is approaching a multi decade support level at 1.0400 which I think will provide some good trading opportunities. In Figure 1 you can see the monthly chart and the strong sell of from the past few months. Since Aprill 2013 after we broke the psychological level of 1.2100 big round number the downward momentum accelerate and we barely see any kind of retracement.
  • Figure 1. AUD/NZD Monthly chart, Multi Decade Support level.

On the Daily chart we can see much more closer the recent price a…
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This is an old analysis and the 1.0650 was the first resistance at that point and if you look there was the point where we stop before to continue upside again. I'm fascinating as how good this prediction was.

Metal_Mind avatar

i have a buy position on this one on my live account. I put my tp at 1.0980. From the looks of it has potential

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Good luck with that hope it will make you a nice profit:) cha ching:)

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I don't disagree with your NZD/USD. What I was showing was what actually happened in the futures market. My interpretation is correct, I think. For one thing it doesn't always work on futures. And it's less reliable using futures to predict the spot market, as I'm sure you know.

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@DumbAsArock you're right the futures are only a small part of the whole market.

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