Trading the major forex pairs - Week beginning 3rd Jan

Hi,

This is my take of the major pairs going into the trading week starting 3rd Jan. I’m only a novice trader therefore any feedback is gladly welcome.

I'm not sure what effect the European and other bank holidays will have on the markets today.

EUR/USD – Pair has been range bound between 12,972 and 13,451 since 1st December. Beyond this the next S/R levels appear to be and 12,617 and 13,755. Current PA suggests 13,450 – 13,500 is a key level, I’ll be watching price action going into this looking for a reversal or break and pull back to this level.

The 38.2% fib retrace from the 4th November high can be found within this area at 13,472. An ascending trend line connecting the 10th Sep, 1st Dec and 27th Dec lows shows that price is being squeezed between the horizontal resistance and the ascending trend line, making a break from this range even more appealing. If going short off the 13,450 – 13,500 level, the ascending trend line may hamper the R:R ratio.

USD/JPY – Price had been in a weak downtrend since 15th Dec, which then turned into a strong downtrend on 27th December. The descending trend line from the 27th, 28th and 30th Dec highs was broken today, therefore the best bet now looks like a rally back up to the last key support in the 8178 – 8192 range to see if this level will again act as resistance again. This level is also in line with the 23.6% fib from 15th December. If the level breaks the next key resistance is in the 8243 – 8252 range.

GBP/USD – Price has been in a downtrend since 4th November, with a descending trend line connecting the 4th Nov and 14th Dec highs. Major support exists in the 15,350 – 13,300 level therefore I’ll be looking for support again at this level. More recently price has broken through minor support at 15,524, therefore if price retraces to this level there may be a short opportunity.

Again, price in being squeezed by the descending trend line and the major support line, therefore I’ll be watching for a breakout from this range.

AUD/USD – Price has been in a strong uptrend since 8th June. The AUD is at a 5 year high to the dollar. The major level here is 9992 – 10015, with the big 10000 lying right in the middle of this area, I would definitely expect some price action at this level, most probably a bounce as I see this is as a big psychological barrier.
Before this an ascending trend line connecting the 17th, and 27th December lows could also represent a good long opportunity.

hi fxtrades sound analysis,
what timeframes are you looking to base entry on ?
happy new year
cheers
Wig

Hi Wig,

Happy New Year to you too!

I'll be taking my main (intermediate) from the 30 minute chart, unconventional however I like what it gives me, however will give the hourly some reference to see if it tells me any more than the 30 min. S/R is being derived from the daily (long term), again with reference to the 4h to see if I've missed anything.

As far as entries are concerned, I'll be watching the 5 min time frame as my short term to see how price reacts as it runs into levels. I'll be honest, I'm not sure exactly what I'm looking for, however a fast run up into a level would provide me with a little extra confidence that price may turn, equally a relevant candlestick formation indicating a reversal may also help.

I'll look to add to my first post as things develop.

Just entered EUR/CHF on a nice looking 30min pin bar. It didn't quite get to the 12,534 - 12,546 S/R area, however I couldn't resist such a good looking pin bar.

Other factors that may help are the 12,500 big round number, short term MACD divergence and the .location being at the daily R1 pivot, if you place any value on pivot points, which I generally don't.



Well that was a complete disaster, stopped out in under an hour with a massive up bar. Lesson here is dont trade it if its not in your plan!