Fun With Forex
Fun With Forex
Interesting day so far and I trust you rats are enjoying some of the 300 inside day setups presented yesterday. Well, I wouldn’t get too comfortable here – it’s possible we drop further but if you caught a nice candle down since last night then at least take partial profits and keep a few lottery tickets for the prospect of a more pronounced sell off.
As you can see our Net-Lines chart shows us holding right at a cluster of support – there’s another possible support zone near the 25-day SMA which is pushing toward ES 1380 (again consider fair value of ~ -5.9 when correlating this to the SPX).
You may also take note of the deep volume hole right at 1380, thus increasing the odds of a sustained sell off running out of steam there.
But today’s theme is Forex and here’s the AUD/JPY, still our closest correlation to U.S. equities, hanging somewhere in nowhere land. There’s support near 85 in the form of its 25-day SMA.
A few more goodies for my intrepid subs – please step into my freshly fumigated lair:
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EUR/JPY – very nice red candle there but this drop reminds me a bit of a Hollywood stunt from a roof into a stack of cardboard boxes. There’s a ton of old Net-Lines and if those don’t hold then the 25-day SMA ought to be good for some support. If we get there I’d try to be long – until then I play voyeur.
AUD/USD however seems to have suicidal tendencies and if you took that short entry today (or reversed your long trade after being stopped out) then there’s nothing to do for you right now but hold. Your stop should be above that NLSL – give it a bit room for intra-day shenanegans.
EUR/USD is flagging a warning signal and it almost got me stopped out. However, if we push higher I will add another position as this would be a failed challenge (or successful retest – whichever way you want to look at it) of the NLBL. If I get stopped out then I’ll probably just leave it at that as the downside potential seems limited.
Finally, the NZD/USD is sitting on dual support – a NLSL which thus far held up plus a 100-day SMA right below. I want to be long here until proven wrong at which (you know it by now) I would have little compunction to flip that trade as there’s nothing but air below.
As a matter of fact – that is the scenario I am hoping for but I cannot take that trade yet as we have not taken out support just yet. Sometimes a few ticks make a world of difference and leave the guesswork up to the suckers on the opposing side of your trades ;0)
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Cheers,
