Daily Analysis of Major Currencies

D

downrivertrader

Short Term Analysis
Date: Monday, 2/4/2008

EURUSD (Close 1.4802)
I'm short from last week’s 4891 range top. Currently up 106 ticks. If you are short, stay short and follow today’s analysis.

For Monday, I expect the EURUSD to trade down to the 4780 level in Asia. This area has the potential to hold the range bottom and reverse price back to 4850. If this materializes, short term traders can look to set new shorts on a push up into the 4850 level. Target for the trade would be 4718. Ideally, risk should be above the 4895 level.

If the 4780 level gives way, then continue to hold short into 4718. Cover all shorts at this level. This is a very important level and will establish our directional trend for the week. If this level holds and price moves up, look to set longs on a return to 4718. Current target is 4850.

If price were to move down and settle below 4718 before my next update, then I would look to set shorts on a push back up near this level. Current target comes in at 4572.

USDJPY (Close 106.48)

If you have been following our progress on the Yen, we are long from last week’s range bottom at 105.70. Currently up 78 ticks. If you are long, stay long and follow today’s analysis.

For Monday, I expect the USDJPY to test the 106.30 level in Asia. This is a key level and my bias is for it to hold. Traders can look to set new longs at 106.30. Target 107.24, if price moves through this area then target 107.75. Exit all longs at this level and wait.

If 106.30 does not hold and price settles below this level, then I would exit current longs and set shorts near this level at 106.30 for a move down to 105.40. Cover shorts here and wait for value to build for the next directional move.

GBPUSD(Close 1.9683)

No prior analysis to follow.

For Monday, I expect the GBPUSD to move down to 9624 in Asia/Europe, if this level holds price should reverse for a re-test of 1.9682 in London. Short term aggressive traders can set longs out of 9624 and target 9682. If price continues upward through the 9682 level, then target 9735 and exit all longs at 9735. Wait for value to build. If 9735 holds, then traders should look to set shorts for a move back down.

If price moves down through 9624 in Asia/Europe and holds below, then traders can set shorts for a move down to 9509. Cover all shorts here. A move below this level is very significant.

USDCHF (Close 1.0892)

If you have been following our progress on the Franc, we are long at 1.0825 from last week’s range bottom. Currently up 25 ticks. If you are long stay long and follow today’s analysis.

For Monday, I expect the Franc to trade up to 1.0926 in Asia/Europe. This level has the potential to reverse price action; however my bias is for price to continue up to 1.0964. Exit all longs at this level and wait for value to build for further directional information.

If price moves down in Asia/Europe, look for 1.0819 to hold. Traders can set new longs out of this level for a move up to 1.0964. Risk on this trade should be below the 1.0780 area.

The key for the Swissy is the open in Asia, I am looking for price to move up but it is not completely clear to me.
 

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Quote from downrivertrader:

Short Term Analysis
Date: Monday, 2/4/2008

EURUSD (Close 1.4802)
I'm short from last week’s 4891 range top. Currently up 106 ticks. If you are short, stay short and follow today’s analysis.

For Monday, I expect the EURUSD to trade down to the 4780 level in Asia. This area has the potential to hold the range bottom and reverse price back to 4850. If this materializes, short term traders can look to set new shorts on a push up into the 4850 level. Target for the trade would be 4718. Ideally, risk should be above the 4895 level.

If the 4780 level gives way, then continue to hold short into 4718. Cover all shorts at this level. This is a very important level and will establish our directional trend for the week. If this level holds and price moves up, look to set longs on a return to 4718. Current target is 4850.

If price were to move down and settle below 4718 before my next update, then I would look to set shorts on a push back up near this level. Current target comes in at 4572.
More...


NA UPDATE: The EURUSD reached 4850 and was quickly rejected. You should be short out of this level with a target of 4718. In order to reach this target, we will have to move down through 4780. If the market moves back to 4850, use this opportunity to set up shorts ahead of this level once more.


USDJPY (Close 106.48)

If you have been following our progress on the Yen, we are long from last week’s range bottom at 105.70. Currently up 78 ticks. If you are long, stay long and follow today’s analysis.

For Monday, I expect the USDJPY to test the 106.30 level in Asia. This is a key level and my bias is for it to hold. Traders can look to set new longs at 106.30. Target 107.24, if price moves through this area then target 107.75. Exit all longs at this level and wait.

If 106.30 does not hold and price settles below this level, then I would exit current longs and set shorts near this level at 106.30 for a move down to 105.40. Cover shorts here and wait for value to build for the next directional move.
More...

NA UPDATE: Continue to hold long. Watch the 107.24 level. This level has the potential to reverse direction for the session. My bias is for this level to give way, if it does target 107.75.

GBPUSD(Close 1.9683)

No prior analysis to follow.

For Monday, I expect the GBPUSD to move down to 9624 in Asia/Europe, if this level holds price should reverse for a re-test of 1.9682 in London. Short term aggressive traders can set longs out of 9624 and target 9682. If price continues upward through the 9682 level, then target 9735 and exit all longs at 9735. Wait for value to build. If 9735 holds, then traders should look to set shorts for a move back down.

If price moves down through 9624 in Asia/Europe and holds below, then traders can set shorts for a move down to 9509. Cover all shorts here. A move below this level is very significant.
More...

NA UPDATE: This worked out perfectly. The pair made a low of 9625. You should have set longs and held through 9682 and exited at 9735. We are currently trading at 9764. My bias is down from but I would like to see value build and the pair move back below 9735 before setting up shorts. I would recommend being flat at this point.

USDCHF (Close 1.0892)

If you have been following our progress on the Franc, we are long at 1.0825 from last week’s range bottom. Currently up 25 ticks. If you are long stay long and follow today’s analysis.

For Monday, I expect the Franc to trade up to 1.0926 in Asia/Europe. This level has the potential to reverse price action; however my bias is for price to continue up to 1.0964. Exit all longs at this level and wait for value to build for further directional information.

If price moves down in Asia/Europe, look for 1.0819 to hold. Traders can set new longs out of this level for a move up to 1.0964. Risk on this trade should be below the 1.0780 area.

The key for the Swissy is the open in Asia, I am looking for price to move up but it is not completely clear to me.
More...

NA UPDATE: We did trade up but have not reached 1.0925 (High of 1.0919). I continue to hold long into 1.0925. Watch this level carefully, if we move through here target 1.0964 and exit. If we move down, 1.0819 is a valid target for this session. My current bias is up.
 
if you are posting your trading journal that is one thing. But you are posting in advisory format ("You should be short out of this level with a target of 4718"...) which either implies either:

-- You are setting up a service, to attract paying customers In this case, you need to get permission from the site owners, and becoming a paid sponsor (do not see any evidence of this in your posts so far).

-- You have no clue about the liabilities you are setting up, since you are ignoring the federal requirements for disclaimers (warnings about hypothetical returns and other things). Being free does not spare you from this responsibility.
 
Don't you have anything better to do than worry about what I am doing. This place will never change.

I will change my pronouns for you.

Why is it you assme that I have no ideas about liabilities? I graduated from Harvard Law, but took a position on Wall Street instead. I still get together with my pals and a few of them advise me. Jeezy peezy.
 
"Jeezy Peezy?" LOL I've heard Jeez Louise, but not that one. Heheh. Good one. By the way, thanks for the posts. At least they are informative and backed up with something other than "I believe" ...
 
Something different. Maybe it will give you some ideas. Here are tommorrow's initial trades based on the attachment.

EURUSD

Short @ 1.4829
Target1 = 1.4780
Risk above 1.4830

Watch for a reversal at 4780, if price moves through 4780 stay short. If price moves through 1.4830 strongly, reverse to long.


GBPUSD

Short @ 9731
Target = 9632
Risk above 9774

Watch for a reversal at 9682, if price moves through 9682 stay short. If price moves up through 9774 strongly, reverse to long and target 2.0486.


USDJPY

Short @ 106.69
Target = 106.29
Risk above 106.73

Watch for a reversal at 106.29, if price moves through this level, stay short and target 105.42.

If prices moves up through 106.73, then reverse to long and target 107.24.


Swissy - Same method using Bridge Levels
 

Attachments

Just in case anyone is following along or trying to understand this concept here is an update....

Things worked out really well today, not always so lucky of course.


Quote from downrivertrader:

Something different. Maybe it will give you some ideas. Here are tommorrow's initial trades based on the attachment.

EURUSD

Short @ 1.4829
Target1 = 1.4780
Risk above 1.4830

Watch for a reversal at 4780, if price moves through 4780 stay short. If price moves through 1.4830 strongly, reverse to long.
More...


You would have been short at 4829, the first target 4780 was hit and price continued down. If you took profit here, you should have been short again below 4780. You would continue to hold short with the next target at 4572. Price is now at 4669. Up around 160 pips.

Since 4780 has traded, it is considered resolved and will be removed after the close today.

GBPUSD

Short @ 9731
Target = 9632
Risk above 9774

Watch for a reversal at 9682, if price moves through 9682 stay short. If price moves up through 9774 strongly, reverse to long and target 2.0486.
More...

You would be short at 9731, continuing to hold short for 9632. Currently up 56 points.

USDJPY

Short @ 106.69
Target = 106.29
Risk above 106.73

Watch for a reversal at 106.29, if price moves through this level, stay short and target 105.42.

If prices moves up through 106.73, then reverse to long and target 107.24.
More...

You would have been short at 106.69. Once price moved through 106.73, you should have reversed and targeted 107.24. Price is now at 107.43. Depending on your losses around the reversal area, you should be up around 50 points or more. If price moves back below 107.24, I would cover the trade and wait.

Since 107.24 has traded, this will be removed at the end of trading today in North America.

Swissy - Same method using Bridge Levels
More...

You would have been short the franc at 1.0878, once price moved above 1.0890 you would have reversed at this level. The next target level at 1.0986 has traded thru and we are currently at 1.1018. You would be up around 100 points or maybe more.

Since 1.0890 and 1.0986 have been traded, they will be removed at the end of the NA session.
 
Downriver, hopefully you will continue the analysis.

Sure contributed in my decision to short the Euro this morning and come home to a nice take profit.

Thanks
 
Just a note...the best time to begin trading these levels is around 3:00 AM EST (London Session). This will reduce the number of reversals. It is not easy for those of us on EST to do it though. The method is very robust if traded during the Asian and NA sessions as long as a trader is disciplined to always reverse at the "red box" level.

PS - I also included currency futures and the DOW mini if anyone trades these.

Take care and good trading
 

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