Hello Traders from FTMO and welcome back to another Sunday Market Review. This week we will look at three currency pairs and maybe we will find some neat swing trading opportunities in the upcoming week.
AUDJPY – H4 chart
In this chart you see that AUDJPY has formed a solid channel with two touches on the upper trend line resistance and two touches on the lower trend line support. As a matter of fact, price tends to get attracted to key price levels and will like test the upper trend line resistance.
Will the price break out or will it reverse off of the trend line resistance? We don’t know, but we will closely observe, how price will react to that level. It is absolutely crucial to let the market tell you what direction it is likely to go instead of trying to predict, what is going to happen.
If the market shows any bearish signs we will go short. A possibility of a double top is there and would look something like this.
On the other hand, price may also break out and we will be also prepared for this scenario. In such case, we will look for a bullish signal such as a flag pattern.
GBPCAD – H4 chart
What we see on the GBPCAD is the price has formed a rising wedge pattern and broke to the downside (bearish). After the breakout, price retraced to a 61.8 fibonacci level, a very significant one. We would want to enter short on this pair, but how? On this example, I will show you how to use multiple timeframes to perfectly execute a trading opportunity.
The chart above shows a solid range on the 15 minute time frame. If price broke out of the range to the downside, we’d have a solid short trade. The idea behind using multiple time frames is that we let odds stack in our favor by letting momentum align. In this case, we would have a bearish signal on the higher time frame (wedge pattern) for direction and a bearish signal on the lower time frame (range breakout) for entry. If price doesn’t break below the range however, we do not have to force the trade, simply look for other opportunities. Stay disciplined!
CHFJPY – H4 chart
In this last currency pair, we will have a look at, I want trading to look as simple as it can get. Now, look at the chart below.
As you can see, the CHFJPY broke out of a flag pattern and price is clearly bullish. However price is simply too high to buy right now, so what to do?
Simply wait for a pullback. Waiting for a pullback is very nerve-wracking as it may never come, but it rewards you with a much better entry price. Many traders have a so-called ‘fear of missing out’. If you do have this problem, simply place a limit order at your preferred price and go watch a movie :). We will wait for the market to do something like this:
This is it for this week’s market review.
I wish you a great trading week and as Pavel says, remember to trade safe.
Khac Tu Nguyen