GBP USD CLOSE TO WEEKLY RANGE - forex trading system rules

GBP USD CLOSE TO WEEKLY RANGE ~ forex trading system rules

The GBP USD has been moving in step with the EURO USD as both pairs decline in sync with strong gains for the Greenback across the Forex market.  Similar to the EURO USD, the Sterling pair is closing in on its Weekly Range target which lies only 120 pips away. When that area is hit in the next few days, we could see a temporary pullback or consolidation take place before the downtrend continues. On the other hand, the slow and staggered nature of the downtrend also points to the possibility of a large Range being formed in the months ahead.

Daily Chart below shows that the pair is very close to hitting its first Weekly Range target of the new downtrend.

DAILY CHART

Within a very short time after hitting this price area, we could see one of two alternate scenarios unfolding.

SCENARIO 1

• A Pullback/Small Consolidation;
• New Bearish Signal to Continue Downtrend;

If the downtrend is going to continue in the next few weeks, we could either have a temporary pullback or a small consolidation being formed. This will then give way to another bearish signal to resume the existing trend direction.

DAILY CHART

  

After resuming the trend, the currency pair will decline until the 2nd Weekly Range Target is hit.

SCENARIO 2

• A Rally that starts a Consolidation;

The slow nature of the downtrend suggests that a Consolidation could also be formed over the next few months. If this is going to take the form of a Range, then the Weekly Range target that will be hit would represent the Support boundary of that Range.

DAILY CHART

 

Only time and traders will show us what actually transpires in the next few days. However, given the manner in which currency pairs behave based on the types of candles and their Weekly Range, these are likely to be the scenarios to look out for going forward.

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MONTHLY RANGE PUTS EURO AUD AT MAJOR CROSSROADS - forex trading system simple

MONTHLY RANGE PUTS EURO AUD AT MAJOR CROSSROADS ~ forex trading system simple

After completing a Bear Crown setup that led to a strong downtrend of over 1,000 Pips, the EURO AUD is now at a crossroads that could either lead to more gains for the Aussie or a strong trend change altogether.

The Chart below shows how this downtrend began, the breaks of the Uptrend Lines and the current Pennant setup that the pair has now formed. 

DAILY CHART

Bull and Bear Crowns as well as the breaks of Trend Lines are typically what we see when major trend changes take place. Traders can either enter at the start and hold trades for long periods or can aggressively trade the waves of the trend. As this trend continued to create lower lows, the Monthly Range of the pair was also breached. Trends that reach this important price point will either pause for a period before resuming the trend or change direction. In the chart below, we can see that this pause took the form of a Pennant that was eventually broken, indicating that we could see a continuation of the downtrend. 

DAILY CHART

On the other hand, as we can also see from the chart above, the current Pennant that has been formed has moved the pair above the Inner Downtrend Line. This could indicate that the current downtrend may actually be coming to an end, given the slow and unconvincing breakout from the larger Pennant. Currency pairs can exceed their Monthly Ranges to give the impression that the trend will continue but the longer the trend takes to get going, the more likely that a trend change will take place. The chart below shows how these two scenarios could unfold.

DAILY CHART 

A simple bearish breakout from the Pennant could be the signal required to continue the existing trend. If the candle given to start this breakout is strong enough, entry can take place there with the appropriate target of between 100 and 200 Pips. However, this Pennant may also be the Centre Tip of a possible Bull Crown that starts a new trend above the Downtrend Lines. One would have to wait for a Right Tip that completes the Bull Crown or another formation before considering entry to go long. Strong trend changes require strong setups and the current Pennant is not large enough to support a trend change. 

Only time will tell what takes place with this currency pair. Regardless of the ultimate direction, we can take advantage by patiently waiting on the appropriate Daily and 4 Hour Chart signals for profitable trades.

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GBP AUD MAJOR DOWNTREND REVERSAL IN SIGHT - stealth forex trading system review

GBP AUD MAJOR DOWNTREND REVERSAL IN SIGHT ~ stealth forex trading system review

OVERALL SCENARIO

• At End of a Major Uptrend;
• Broken Inner & Outer Trend Lines;
• Within a Large Pennant Consolidation;
• Possible Rally to Resistance;
• Likely Break of Support to Start Downtrend

  

CHART 1 - END OF MAJOR UPTREND

POSSIBLE SHORT-TERM SCENARIOS

• Rally to Pennant Resistance after/without hitting Support;
• Break of Pennant Support to Start New Downtrend;

CHART 2- PENNANT CONSOLIDATION

 LONG-TERM SCENARIO

• Support Likely to be Broken;
• Major Uptrend has ended, Trend Lines Broken,Large Pennant Formed;
• This is the typical setup for a new, major Trend Change;

ACTION RECOMMENDED

• Wait for Strong Bull Signal now or at Support to Trade to Resistance;
• Wait for Strong Bearish Break to start Downtrend;
• Aim for 100 - 200 Pips;

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EURO USD MAJOR DECLINE TO SUPPORT AT 1 2154 - forex trading renko system

EURO USD MAJOR DECLINE TO SUPPORT AT 1 2154 ~ forex trading renko system

As the EURO USD continues to decline, a temporary pullback appears to be on the horizon in the next few days as the pair approaches its 2nd Weekly Range price target. Since this area will also coincide with the Monthly Range also being hit, a significant rally or consolidation is expected after that price point is reached. Following this pause in the downtrend, gains for the USD will resume as it sets its sight on the major Support area of 1,2154.

The first graph below shows that we are just about 100 Pips away from the 2nd Weekly Range and the Monthly Range being hit. Based on the average Weekly Range of the EURO USD, this target is expected to be at the 1,3307 area.

DAILY CHART

 

In most cases, currency pairs tend to pullback or go through a period of consolidation when the 2nd Weekly Range is hit. At that area, they will either start a new trend or resume the existing trend with another strong setup and signal. With this new downtrend having been formed with the break of the Inner and Outer Trend Lines of the uptrend started in July of 2012, a continuation in the current direction is expected.

DAILY CHART

This new trend has also led to a break back inside of the Resistance of the large Pennant setup. We are therefore likely to see a long-term decline to the Support area at 1,2154, over 1,200 Pips away.

DAILY CHART

Along the way, the market is expected to pullback at major past Support areas that can also be used as profit-taking targets. Some traders who trade against the trend will also be buying at these areas, while others will be selling as the pullbacks give way to the resumption of the strong long-term downtrend.

DAILY CHART

In trading these movements in the direction of the trend, one must ensure that the setups and signals are strong and clear enough. Naturally I recommend the setups in my Trading Manual based on Price Action, but if you are a Day Trader and/or someone who uses indicators, ensure that your analysis is spot on to capture the large number of pips that will be on offer over the next few months.

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MAJOR TREND CHANGE EURO JPY EASY 250 PIPS - mathematical forex trading system review

MAJOR TREND CHANGE EURO JPY EASY 250 PIPS ~ mathematical forex trading system review

The bearish pattern now seen on the EURO JPY as part of a major trend change, could either be one of the largest Bear Crowns you will see in the Forex or a setup for a very large Pennant Consolidation. A small Pennant has just been broken on the Daily Chart that could provide 250- 280 Pips of potential trading gains. However, given the uncertainty of the larger formation taking shape, this might actually be a very risky trade.

The Pennant broken can be seen here along with the potential take profit areas if the breakout takes place. The Breakout Equivalent is the expected target to be hit based on the size of the Pennant, while the Weekly Range is the average distance that this pair moves when it is trending.

DAILY CHART - PENNANT BREAKOUT

DAILY CHART - BREAKOUT TARGETS

On the face of it, this looks like a very straightforward Consolidation Breakout setup with a strong bearish candle signal. If this breakout materializes, the targets would be hit within 3-6 days to give traders a good profit in a market offering very few opportunities. This may even be supported by a very large, though awkward-looking Bear Crown Setup and a movement towards the major Outer Uptrend Line.

DAILY CHART - BEAR CROWN

DAILY CHART - INNER & OUTER TREND LINES

Breaks of Trend Lines that follow the end of a major trend usually lead to movement towards an Outer Trend Line if this exits. However, another look at the setup also gives us the impression that this awkward pattern may actually be a very large Pennant that is being formed. This would mean that a Reversal and False Breakout will actually be the pattern that we actually see that leads to the 2nd Support of this Pennant being formed.

DAILY CHART - CONSOLIDATION ?

This setup actually looks to be the more likely outcome given the unusual pattern of this currency pair. Such large Consolidations also tend to appear when the market is transitioning from the end of a major trend to the start of another.

DAILY CHART- EURO USD

DAILY CHART-  AUD USD

Aggressive traders could take the chance to trade this breakout in case we are wrong about this large Pennant. But given the examples of similar setups across the market, it may be better to forgo this one and wait for another, clearer trade setup.

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USD CAD AT MAJOR TREND LINE STRONG RALLY AHEAD - forex trading system scams

USD CAD AT MAJOR TREND LINE STRONG RALLY AHEAD ~ forex trading system scams

The USD CAD is now just above a major Uptrend Line following a recent downtrend that led to strong gains for the Loonie. With this Uptrend Line having defined the direction of the pair since 2012, we could either see a strong rally above the current Downtrend Line or a major break to resume the downtrend.

This Uptrend Line supported a very strong rally that carried the currency pair from 0,9632 in September 2012 to the high of 1,1277 in March 2014. We can also see that there were four previous rallies at this Trend Line, indicating the strength of this boundary.

DAILY CHART

Looking at the recent downtrend that has carried us to this Trend Line once more, we can see that it provided a trading opportunity when a Range setup was broken. Entry at the breakout candle could have given the trader a little over 100 Pips with the exit taking place above the Uptrend Line.

DAILY CHART

From this point, the currency pair can either rally to break the Downtrend Line or break below the Uptrend Line. If it does rally, it can do so with a direct break of the Downtrend Line followed by a test and then a further break long. Alternately, it could also move sideways in a Consolidation before breaking out. Such a setup could also be the precursor to a breakout short below the Uptrend Line.

DAILY CHART

With the pair already reaching its 2nd Weekly Range, however, further moves bearish could be limited if we dont see a large setup formed in the near future (see Trade Manual). This would give the break of the Downtrend Line a higher probability of taking place, providing a larger range of pip targets to choose from.

As with all scenario analyses, one will have to wait for the best signals to be provided by the market to justify entry. In this very low volatility environment of few opportunities, one will have to be sharp to monitor several currencies at a time to be able to spot these rare, but profitable trades.

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