Forex Analysis for the Week Ahead 21st February 2010
Hi, we have been on a roll on the weekly charts over the last 4 or 5 weeks & I am sure that you are all sat there with pens & papers ready to write down this weeks golden nuggests of wisdom 
I have spent over 6 hours analysing the charts. Been for a walk to clear my head and come back to them but have struggled to come up with just a few possible weekly trades for this week.
Remember my mantra is IF IN DOUBT. STAY OUT. Our 1st priority is to NOT lose money. February has already been a tremendous month so I have no intention of giving anything back. Last weeks weekly Gbp/$ analysis alone was worth 450 pips. I said to consider a short at 1.5800 which was spookily accurate.
Remember if the charts are not in our favour we should wait until they are. Unfortunately if you were only working from weekly charts that’s a long time to wait. My best advice is wait & see what happens tomorrow. There were some huge moves last week with recent highs & lows being broken & then the fed threw fuel on the fire with their surprise move on Thursday, when they announced that they were increasing the interest rate charged to banks for emergency loans. This was a further reminder of why you should only be in one $ trade at a time (unless you have your stop to entry). The sudden unexpected announcement meant that anyone who was short the $USA for solid technical reasons had their trades wiped out in minutes.
Cleveland Federal Reserve Bank President Sandra Pianalto had this to say at the week-end: “So many variables affect the value of the U.S. dollar that it is hard to know where the greenback is headed” if this lady is struggling then I don’t wonder I am confused!
Last week I showed you how lots of moves were likely to be 4 hour. It may be the same this week. Take a look at some of the weekly charts, we have “spinning top/indecision candles” on more than a few. The Euro/$ for example looks very bearish (likely to fall) on the monthly chart just as soon as it can break 1.3600 which also happens to be the monthly 55ema, BUT on the Daily it looks at least temporarily bullish.
Bollinger bands again will give important clues at the market open. Make sure you check them out on the weekly as well as the daily charts. If they slam shut then price is likely to reverse & if they swing open, price is more likely to break through.
Stops: I have had a few emails lately asking me for advice about where to place stops. I will go into greater detail on this subject tomorrow.
Emas: Remember, when I do my analysis the emas are static, but by definition they move. So if for example the 4 hour $/Yen 200 & 55emas are currently at 90.64 they will move at market open, similarly the daily & even monthly.
I will not place any orders at the market open. I will wait & see what happens. The following numbers are just areas of interest. These are areas that I will mark on my charts for tomorrow & wait & see what happens when price gets there. After the huge moves of last week it is my best advice to wait for the dust to settle before diving in to take trades. There is a strong possibility of gaps on many $ pairs at the market open. Wait & see.
| M1 | If the Asian session is quiet then look for opportunities tomorrow around the London open |
| Lmt
|
Fridays Gbp worked out. On Alpari at least, there is the likelihood of a signal on the Gbp/Yen daily chart at market open. Wait & see what happens at market oepn. If pulls back up then then look for possible short around 142.00 |
| Gbp/$ | Can’t help but think that this was oversold on Friday. I do think that it has further to fall but as ever we need an entry. Friday’s candle is a pin bar reversal which suggests up move at least temporarily & the weekly candle will be outside the bollinger which supports the theory. 1.5550/1.5600 are areas I will be watching. Further complicated by the fact that there is an report by the Governor of the Bank of England before parliament that starts at 09.15 GMT tomorrow & will last a few hours. Avoid anything Gbp related around this time. Could have the same effect as Bernanke testifying before the Senate. |
| Euro/$ | Quite a few news releases tomorrow, the most important of which is at 09.00 GMT tomorrow. Price bounced back up on Friday the question now of course is if it is to continue down, where should we look for possible entries. 1st line of interest is 1.3650, but I am more likely to short if price gets back up to 1.3700/3735 area. Weekly bollingers support the theory of a further move up even if only temporarily. Fridays daily bollinger slammed shut. If points up at market open suggest bigger move up. |
| Chf/$ | Very bullish on monthly & weekly. This pair seems to pullback more than many of the others. Strongest area for me to consider a long is 1.0700 & possibly as low as 1.0660 |
| $/Yen | I made a mistake in the video. I was intending to talk about placing stops on $/Yen & I said shorts. This was a mistake I am NOT looking to short this pair at those areas.
Japanese News tonight around market open 23.30 GMT wait to see what effect it has before entering a trade. Looking to long at 91.00 or definitely at 90.70
|
| Aud/$ | Waiting until Tuesday. |
| Cad/$ | BOC Senior Deputy Governor Paul Jenkins speaking 19.30 GMT today. If he says something unexpected could be gap at market open. Remember the Cad is strengthening & the Bank Of Canada does not want that. It has said that it will intervene to weaken the currency. Cheaper way is for this gent to say soemthing detrimental! If no unexpected news/comments from him then I expect this pair to continue falling. It finally broke major support of 1.4015 late last week. Pullback to there and even better to 1.0450 would be good place to consider a short. recent low in January 2010 was 1.0220 so could fall to there. |
| Euro/Cad | Broke MAJOR support last week. Bounced back up from 2007 weekly candle close at 1.4100. Looks bearish BUT need a pullback. 1.4200 would be ideal but 1.4178 is 61.8% weekly fib and a daily trend line that I have, so would struggle to go any higher than that. |
| Euro/Yen | No Idea! |
| Euro/Gbp | Starting to look bullish again on all time frames. To go long though I need price to break lots of areas & emas. Possible bounces back down at 0.8830 & then 0.8860 BUT be extra cautious with this |
| Gbp/Yen | Looks bearish on daily so possible short at 142.00 again BUT only way I would look at this tomorrow is a 4 hour triangle break out |
| Aud/jpy | Looks bullish on all time frames but price needs to clear and close above 83.00 for me to consider a long. The flip side of that is 83.00 would be an area to consider shorting BUT I will not with current outlook. Wait till tomorrows analysis. |
| Remember that Patience & Discipline is a virtue in forex. We have been spoiled in the last 6 weeks. It simply means we will have to look at daily charts this week, which is no hardship, regards, marc |
If you would like to receive detailed daily analysis that has already yielded 1000′s of pips this year then consider joining my low cost forex mentoring service. We have a 5* Rating on forex peace army and those joining now do so at the reduced rate of only $29.95 per month, locked in for as long as you remain a member. Click on the following banner to find out more:
