Do You Still Lose?
Forex Market on Friday Afternoon
Hello 
Thanks a lot for taking the time to answer my questions and show me the way. I have read all the comments you posted and will reply them one by one after posting this report.
Form what I could understand from your comments, most of you like the way that I have been publishing the reports so far and like me to keep on doing that. For most of you learning the technical analysis is important and you like to see my analysis and although you like to take the advantage of the trading opportunities on time, learning the analysis is more important for you.
You are right. You have to learn to do it yourself and you can not be dependent on me or anybody else. Nobody knows for how long the reports will be published on this weblog so you have to become able to do it on your own. This has been my most important goal from the first days I started publishing the reports (read this) but I always think about better ways to help you more.
Anyway! Today is Friday and the forex market will be closed in the afternoon. So I will not have any report for tonight but don’t forget to check the report I will publish on Sunday afternoon. The Sunday afternoon reports are always more detailed and more complete and cover more currency pairs and the good thing is that you can receive it on time and you can take the advantage of the trading opportunities.
Fundamentals: Not any special news for today.
1. Euro against US Dollar (EUR-USD)
As I warned you last night, the uptrend was so close to the end and so the price went down. Hope you could go short or in case you already had a long position you could close it on time and maximize your profit.
Currently the price is fighting with the 61.80% Fibonacci level and goes up and down around it. I have plotted the Fibonacci levels on the one hour chart from 15 Jan 14:00 (GMT) to 22 Jan 8:00 (GMT). As you see the levels have worked as support and resistance several times during this period.
If you like to predict if the price will break down the 61.80% Fibonacci level or will not break it and will go up, you have to check the smaller time frames like 15min and 5min. I will show you how.
You have to find the supports and resistances in the smaller time frame and then see which one will be broken. As you see in the 5min chart, the price is moving inside a channel. If it breaks the support (upper line) it will go up and it means the 61.80% level could not be broken as a support and visa versa. This is what you can see in the one hour chart too but you can see it much sooner in the smaller time frames like 5min.
Currently it is trying to break the resistance but has not been successful so far. Let’s see!
Another thing that the 5min shows you is a triple bottom. The triple bottom will know as a successful reversal signal only when the resistance becomes broken up.
2. US Dollar against Swiss Franc (USD-CHF)
Yahhhhh! This is the case that the triangle rule didn’t work. I told you last night that I don’t trade according to the rules and now you see what I meant. The triangle broke up instead of breaking down.
Currently the price is trapped between the 50% and 61.80% levels and so you have to check the smaller time frames and predict the direction.
The 5min chart shows a Head and Shoulders that worked. When I say “worked” I mean it could break its Neckline as a support and go down. So it will work as a reversal signal. In case it can not break the Neckline, they say the Head and Shoulders failed. It means it couldn’t work as a reversal signal.
Currently the the price is back to retest the broken neckline. If it fails, the price will go down for sure.
3. British Pound against US Dollar (GBP-USD)
It went up nicely and now is inside an ascending triangle. In most cases ascending triangle works as a continuation signal in an uptrend and so we expect the price to break up. But as I always emphasized we work according to what we see not what we expect. If you have a long position you should close it and collect your profit because it is possible that the price goes down.
Another thing is that it has broken the 100% resistance and now is retesting it. This will increase the breakup probability.
4. US Dollar against Japanese Yen (USD-JPY)
Nice opportunity to go short but it is going up right now. You have to check the 5min and wait. As soon as it started going down again you can go short.
5. British Pound against Japanese Yen (GBP-JPY)
Exactly the same story you see in USD/JPY right now. Follow the same advice.
6. Euro against Japanese Yen (EUR-JPY)
Exactly the same story you see in USD/JPY right now. Follow the same advice.
Further Reading:
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leaving our website, please take a look at the other articles we have published.
Forexoma,
Thank you so very much for your analysis! This has been such a great service that you provide for us and I can’t say enough about it.
I do have a question about drawing support lines. I often find it hard to figure out what time period to draw my support lines in. AND - how many points do you reccomend drawing them through? 2 or 3? I see both methods in many of the charts. For the time period, how many candlesticks do you typically use to see a trend?
Another question - looks like you’re very high on the Fibonacci lines. When do we use these as resistance/support lines and when do we restrain ourselves? I hear so many things about the Fibonacci lines, and how they aren’t REALLY based in science, but they work so we don’t question them. Do you have any signals to be able to know when to use them and when not to?
Also, to answer one of your questions, if I had to choose between the technical analysis and buy/sell signals, I would definitely choose the analysis. But I think a lot of us would like to know where you have set buy and sell signals. For me, I see the resistance lines and try to figure out where off of them do I want to set my stop/limit orders. How do you make this decision?
Thanks again for this free service. You’re doing great!
Scromie