Weekly Commentary: 2nd Mar 2014

Previous weekly commentary: Commentary on 23rd Feb 2014

Hello Traders,

The USD Index made a new low and it was pretty much an expected move looking at Price Action for the last few weeks. As price closed at $79.81, the next major support level is around $79. If price goes below that with conviction, that’s also a signal for a bearish USD market.

The following is my watch list for the week:

02 Mar - EURUSD Weekly Forex Chart

(Click on image for larger view)

  • EURUSD – In line with the USD index, this currency pair made some strong movement on Friday. The immediate reaction is that this seems very bullish. However, when I move up a few timeframes, the picture is somewhat different. Looking at the chart above, price has been narrowing since its low in July 2012 and, in fact, a wedge pattern has formed. Meanwhile, the downward channel is still intact since July 2008. While my bias is for price to go lower, price did make a higher low (red box) when compared to May 2010. Gut feeling tells me that price is going to be choppy. As always, I need more price action confirmation before I pick a direction.

02 Mar - EURAUD Daily Forex Chart

(Click on image for larger view)

  • EURAUD – It’s been a while since I saw a classic Head & Shoulder (H&S) pattern and this chart seems to be showing me a potential. This is also inline with my short bias mentioned on 12th Jan (see article) as price is testing a major resistance level (~1.55). On top of that, this is a tilted H&S as the right shoulder is lower than the left shoulder, which increases the chances of a short outcome. Just to be clear, for a H&S pattern to be valid, I need a new lower low as a confirmation. Like everything else in trading, I look for patterns and I am very interested in this one.

02 Mar - AUDJPY Daily Forex Chart

(Click on image for larger view)

  • AUDJPY – As a heads up, this currency pairs seems to be moving towards a symmetric triangle. Early days but I’m likely to trade the range (provided I get a clear signal), of I might just stay out of it. More importantly, I’m excited because I look forward for a consolidation breakout – if one is to present itself.

Thank you for reading and happy trading week! Post any questions or comments that you may have at the box below.

 

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2 Comments

  • Andy B

    Reply Reply March 2, 2014

    Hi Alwin, thanks for the charts. Some strong analysis as usual. The Aussie $ is certainly getting close to some key levels. I was wondering how long you typically look to hold your trades? Also do you ever look at Harmonics in your analysis?

    Thanks Andrew

  • Alwin Ng

    Alwin Ng

    Reply Reply March 3, 2014

    Hey Andy,

    Thanks again. Majors/Minor – I usually hold it for a 3-5 days. Having said that, my longest was 5 weeks.

    I use Elliot Wave occasionally.

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