After strong movement on both sides of the market after the Employment Situation news out of the US on Friday the pair finished moderately higher, just edging out pre-news levels.

Currently the pair is in a downtrend , but a rise above 93.40 indicates a potential reversal.    Resistance beyond is at 94.00.

92.00 – 91.75  is major support on the downside and a break of that level indicates another swing lower.  Some support comes in at 91.30 and 91.00.

Over the last two days the pair has rallied, waiting to see how the pair reacts near the 93.40 will be beneficial, as the pair currently is in mid-swing and several short-term scenarios seem equally likely.

Short term traders can still take advantage of moves within the current swing in early trading this week.  A break above 93.10 will likely test highs (news related) at 93.20 and beyond 93.40.  A move below 92.85 indicates a test of 92.65, 92.50 and 92.25-92.20 if needed.

~Cory Mitchell, CMT
Chief Market Strategist
Remember, failed breakouts are tradeable too!

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Today I am going to briefly go over a few things to notice in the markets.  For those of you who actively trade you will have noticed certain pairs have died – meaning volatility and movement has decreased.  Other pairs have been extremely active and have developed strong trends.

Certain strategies work during certain types of market conditions and therefore it is important to know which environment we are trading in.  This seems obvious, but many traders fail to realize when conditions are not ripe for a certain strategy.

So let’s look at what some pairs are doing (or not doing) right now and then hopefully that will help pick better pairs to traded based on what strategies you use.

EUR/USD, GBP/USD are quite tightly wound at the moment.  Until a major breakout occurs on the daily chart these pairs should not be traded for large moves (relatively speaking).  Rather quick trades within the range (the ranges which started around mid-July) are the best bet.  Looking for reversals within the range using candle sticks is effective.

EUR/GBP and USD/CHF are also moving in a choppy fashion at the moment, although this is not too uncommon for these pairs.  Other than the major movements seen basically in all markets world-wide toward the end of last year, these pairs often move in what I would call a choppy fashion.  These pairs right now are good for similar trades as mentioned above.  Day charts will give many false signals, so use shorter time frames for entries and exits and trade within the ranges established on the daily charts.

USD/CAD and AUD/USD have been moving extremely well, both in strong trends as the dollar has experienced massive declines against these pairs.  Both these pairs are currently at levels which will help determine if the trend is likely to reverse or continue.  Both are approaching former swing lows and highs respectively which if punched through will mean a continuation of the trend.  Large moves still have the possibility of being captured as these pairs continue to trend – whether they continue to reverse (this is a topic for another post).

The examples given are used to show that while we may like to trade a certain pair and a certain strategy, it may not work all the time.  And what worked at one point may not work right now, but it may work again in the future.  We can minimize losses by not trading a certain pair when conditions are not right.  We can trade a pair that is more suited to our strategy, or we can do nothing.  Some of the greatest traders in history were the best not because they made the best trades, but because they knew when not trade and therefore not waste money.  That said there are plenty to opportunities if we match up the right strategies with the proper conditions (different pairs).

To Your Trading Success,

~Cory Mitchell, CMT
Chief Market Strategist
Remember, failed breakouts are tradeable too!

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Are you interested in getting into trading? Or if you are already trading and dissatisfied with your broker, check out mine at Forexyard. Switch to Forexyard, open a Standard account and receive up to a $1,000 bonus.

Open a SuperMini or Standard account now and receive a 100% cashback worth up to $300.
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Here is a longer term view of the EUR and USD relationship.  Adam provides his analysis in this video of where the pair is likely to go.

What I like about this video is he demonstrates a simple way to calculate profit targets.  The method he describes I use myself in conjunction with other profit target establishment methods.  It is simple to use and can be very effective in “predicting” what kind of moves are probable in a forex currency pair.

Battle of the EUR vs USD…who’s the winner?

These guys provide a great service and if you stick around right till the end of the video you will be able to take a 30 day risk free trial.  BUT, as always these videos posted here are entirely free and you don’t even need to register unless you want to try to out many of the great products Ino has to offer.

Best wishes in your trading, and if you want to learn more about forex (as well as other markets) trading on your own, be sure to check out the Trading Courses page on this site for access to some great programs and trading strategies.

WANT MORE?  How about 4 free online seminars:   http://www.ino.com/info/36/CD3784/&dp=0&l=0&campaignid=9 Be Sure to check that one out!

Cheer,

Cory Mitchell, CMT

I will be posting a forex signal later today, so check back in several hours for that.  In the mean time, as you know I love Ino videos.  They put together quality videos which cover a longer time frame than I normally trade on, so I offer these videos for the traders who are looking to swing trade or invest.  That said, having an overall idea of where the market is going or what it is most likely to do can definitely benefit day traders as well.

In this video the Dollar Index is discussed.  The dollar is index is a gauge of how the USD is doing against a basket of other currencies.  By analyzing the DX (dollar index) we get a broad view of how the USD is doing.  Since most of the pairs with high liquidity and low spreads involve in the USD, the ones most commonly traded,  it can be a worth while index to keep on eye on.

http://www.ino.com/info/404/CD3784/&dp=0&l=0&campaignid=3

Oh, and if you wait for the video to totally finish you will be redirected to a free 30 day trial!  Well worth at least taking a look at.  But the videos are totally free and you don’t need to sign up for anything.

~Cory Mitchell, CMT
Chief Market Strategist
Remember, failed breakouts are tradeable too!

Yesterday the pair tore through support in the 94.00 area.  A drop of that magnitude was not expected – the pair had almost a 300 pip move!

The drop does signify a longer term down trend is about to begin with the target being 87.00.  Intermediate support is expected between 90.00 and 89.50.

Currently the pair has bounced off the lows at 91.80 and is trading at 93.18.  A successful retest of the 94.00 level, where price try to test this level and then retreat once again will confirm the breakout.

Want to learn more about chart patterns or other forex and stock market trading methods?  Check out my Trading Courses page.

Source: Forexyard, USD/JPY Daily Chart

Please read the latest How to Use the Trade Ideas blog if you have questions. If you still have questions after, feel free to comment

~Cory Mitchell, CMT
Chief Market Strategist
Remember, failed breakouts are tradeable too!

Are you interested in getting into trading? Or if you are already trading and dissatisfied with your broker, check out mine at Forexyard. Switch to Forexyard, open a Standard account and receive up to a $1,000 bonus.

Open a SuperMini or Standard account now and receive a 100% cashback worth up to $300.
Open a Standard account and trade commodities, receive 10% cashback worth up to $1,000.

I am here to personally help you out if you open an account, and need help with strategies or figuring out the trading platform.

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There are a few analysts I really respect and one of them is Adam over at Ino (Market Club).

Here is a great video on the EUR/USD pair.  It is a longer term view of the pair, but is very valuable and informative for traders on all time frames.

What I love about these videos is it shows you right on the charts (in the video) how Adam is analyzing the market.  So not only do you get some insight into the market, but you also get a great little technical analysis tutorial.

http://www.ino.com/info/395/CD3784/&dp=0&l=0&campaignid=3

To your trading success,

Cory Mitchell, CMT
Chief Market Strategist

In my last post on the longer term view of this pair, I mentioned that how the pair reacted at 1.0800 would be critical in its longer term movements (this analysis was contributed to ForexPros.com and can be seen under my submitted analysis – My analysis of the eur/usd and usd/jpy can be viewed daily, all day, on the homepage of the site as I provide an idea of what to expect through the upcoming trading day).

We know know that it reacted strongly with the USD gaining over 700 pips against the CAD since that level was touched.

Several factors point that we are in the start of a new uptrend.  RSI has moved up above 70 which it did not do on the downswing.  Thus we have a breakout on the RSI.  The (small) correction also held above 40, which is a strong sign.

With the rate surging, at the moment, higher we will likely test the trend resistance line.  This trend line is just below the former swing high at 1.1750, the former swing high is at 1.1800.  Obviously a break of that level will be required to really confirmed a reversal and a new uptrend.

The trend line moved down over time so the break of that trend line can give us early indication of a  move ever higher.

The break above 1.1800 indicates a move to 1.2800 over the long term.  This could be adjusted as low as 1.2400 depending on the when the breakout occurs.  The longer it takes to breakout, and thus the lower the trendline price is when the breakout occurs, the lower the profit target will be.

Failure to move above 1.1750 (this will decrease over time as the upper trend line falls) and ultimately 1.1800 would mean a testing of the small correction lows at 1.1200 and a more significant correction.  A break below 1.1200 would indicate further weakness and a likely resumption of the downtrend.  That downtrend would be confirmed with a move below 1.8000.  Intermediate support between 1.1200 and 1.8000 is 1.0950.  If that level can hold, it will likely be choppy trading for a while as the market chooses a direction.

BOTTOM LINE:  Right now it appears we are heading even higher, but we are still in a downward sloping trend channel.  Corrections should hold above 1.1200 and and resistance is expected between 1.1700-1.1800.

Keep in mind, oil is breaking hard, and you see that analysis at http://www.darkpooltraders.com/vb/energy-futures/106-oil-about-break.html.  Get the analysis and updates to that trade there.

Falling oil prices hurt the CAD, which will mean the USD is likely to rise in relation to the CAD.  It is not a perfect indicator, but as a general guideline it works well.  This means the USD/CAD currency pair is likely to push higher as oil prices fall.  While this is not an oil analysis, a move back to former lows is not expected in oil, so the oil fall is likely to be  just  a natural correction.  Thus I believe oil will fall, but for a short time.  Large moves in oil can affect the pair dramatically…as they did today (June 22).  Thus, keep an eye on oil when following this pair.

The average daily range of the pair is currently hovering around 150 pips per 24 hour period starting at 00:00 GMT.  Keep this in mind when making projections for day trading and when using profit targets with time constraints.

Please add comments or if you questions please ask them view the comments link at the bottom of the post.

Want to learn more about chart patterns or other forex and stock market trading methods?  Check out my Trading Courses page.

Source: Forexyard, USD/CAD Daily Chart

To Your Trading Success,

~Cory Mitchell, CMT
Chief Market Strategist
Remember, failed breakouts are tradeable too!

———

Are you interested in getting into trading? Or if you are already trading and dissatisfied with your broker, check out mine at Forexyard. Switch to Forexyard, open a Standard account and receive up to a $1,000 bonus.

Open a SuperMini or Standard account now and receive a 100% cashback worth up to $300.
Open a Standard account and trade commodities, receive 10% cashback worth up to $1,000.

I am here to personally help you out if you open an account, and need help with strategies or figuring out the trading platform.