Week 5/2016 Summary
We will remember this week because of Bank of Japan rate decision to lower rates to -0.1%. Thanks to that we saw a strong reaction on yen pairs. I managed to catch that move because I was watching closely a bounce from 164 level. Later, on 4-hour chart, I noticed that 100 SMA was a resistance for gbp/jpy. Look close at how long it was a problem to price. Eventually, it broke above 100 SMA. For me, it was a signal to go long because I was hunting that ABCD move. 4-hour gbp/jpy:
As you can see, after decision it skyrockets to the 161.8% extension level.
What is interesting, there was a very similar situation on 4-hour SPX chart:
There was less time for a decision, but still it was a good Fibo setup which I took.
Lately, I switched from low time frames (5, 15min) to higher from range 30min – 4hour which I have to say works great so far. 4hour is mainly to decide about a trend, direction and Fibo setup and 30min/1hour are to entry. Thanks to that I started to trade other pairs and indices. Au200 is a good example, where I went long for a correction move. It is, of course, a downtrend here (on weekly chart), but I spotted interesting thing. Price was holding above average and it also broke above 100 SMA, 4-hour Au200 chart:
Which met my criteria to draw a Fibo lines and to go long at breakout above 0% line:
On more interesting thing about this AU200. I said it is in a downtrend on weekly, but check monthly chart:
AU200 have found a support at 50% and 61.8% which is interesting. It is worth to remember that there are other time frames and we can see the different situation there.
Also I had a good trade on AUD/NZD. I was lucky, I think, in that case. I just spotted that after drop price stopped at 78.6% (C on chart) and then went up. It was a rather big ABC pattern and I started to watch it. I went long at the breakout, with a rather wide stop and took profit at 161.8%. 4-hour chart:
I didn’t have that much luck with eur/usd. Not single profitable trade on that pair :). I simply ditch euro and wait until it breaks up or down. I don’t care which side. Simply in that range there is no point to look for a trade:
I will look for one during a breakout :).
Oh, I forgot about Bund which was no brainer. I wrote that it is in a strong uptrend. It broke above high from 2015 with no problem. You can see this on weekly chart:
But on monthly it is really interesting:
This is what I call an uptrend ;).
Hope you had a good trading week. Have a nice weekend, folks!