GBPAUD

This week’s analysis is going to happen on the weekly timeframe. Price has been trading within an ascending channel for 5 months. Therefore we’re in an uptrend. The occurrence of the price ceiling validates bullish weakness and bear power at this point. Last week’s candle stick closed as a hanging man. A candlestick which shows a high probability of a reversal or weakness in an uptrend. We can describe this as a trading confluence as well. Combination of a level and a reversal candlestick.

SUMMARY.

Our trading confluence gives us a reason to believe that this price might reverse and push further down. As usual we have to wait for a confirmation to validate bear dominance at this level. Patience is key and also the name of the game.

AUDJPY

Analysis on this pair is going to be on the daily timeframe. Immediately we notice that price has been on a downtrend. The momentum on the downtrend paused momentarily and started consolidating in the form of a triple top. Price has been supported severally by the neckline and hasn’t broken below yet.

SUMMARY.

This set up is quite clear and direct but not any different from any other in terms of how we approach it. Patience  is key for validation of an entry or bias. In order to trade this chart pattern, a close and confirmation below the neckline is needed. Until then, let’s stay put. Since price might rotate bullish and trend upwards like we have seen numerous times before.

NZDCAD

Welcome to our weekly analysis this week. We are going to look at NZDCAD on the weekly timeframe. It is quite apparent that we are in a bear market. Trading in a descending channel that dates back to 2016, having retracements lasting a few months then sellers take charge. During the last few weeks, we have seen the bulls trying to mark up the price. Currently we see an indecision candlestick in the form of a doji. The doji lies on the upper boundary of the channel which acts as a resistance zone as shown by the eclipses on the chart.

SUMMARY

This week’s candle indicates indecision; therefore we have to wait for further clarification before we make a move. However price behavior is indicating that buyers are exhausted at this point. A decision has to be made and we need to be keen to identify it. Price may be resisted and rotate lower as we are at a price ceiling shown by the upper boundary of the channel. If bulls regain momentum and break above the resistance zone then we will be alert for a confirmation to open bullish positions.

AUDUSD

Again on the weekly timeframe we are looking at the Aussie this week. Bears have been the dominant market players. They’ve pushed price downwards since 2017.We subsequently find a consolidation in form of a chart pattern. There’s a clear descending triangle which also doubles as a double top. Top 1 and top 2 are labelled. The neckline of the double top acts as the lower boundary of the descending triangle. Price has neither broken out of the double top /the descending triangle. This week the lower boundary has supported the bear power just as it has done 3 times before. 

SUMMARY

In order to open any positions we need to wait patiently for a break out. Price may break out below our pattern,i.e below the double top/descending triangle signaling that the bears are still authoritative. On the other hand it may break above the descending triangle. A validated break out on either direction will give us a high probability trade opportunity.  

This week, we are going to look at the most liquid currency pair. Right away looking left, it’s clear price has been trending strongly bullish. Bulls got exhausted at the top and bears took over and have been successful driving the market bearish. Price has been consolidating in the form of a falling wedge in this bear dominated stage of the market. In addition to that, a few weeks ago, we were trading within an ascending channel. The market broke below the ascending channel and pushed upwards to the lower boundary of the channel for a retest. At the same time we have a level that has acted both as support and resistance. Ladies and gentlemen this is what we call a trading confluence or an A plus setup. Trading confluences are explained in detail in our course, but briefly they are described as when we have more than one occurrence happening at the same time giving us a high probability that something will happen. In this case we have 3 occurrences. Currently price has been resisted by the upper boundary of the falling wedge. The retest on the ascending channel has held at least for this week as price has not been to return to the channel. Finally the level has also held its own and acted as resistance.

SUMMARY:

Following the resistance of the various patterns on price, we have a bearish bias. However waiting for a confirmation is paramount to opening any sell positions. Since we are well aware that price might as well, rally bullish and break out of the wedge, pierce through the level and return back to the channel.

On the gold this week, we are keen to notice that price has been on a strong bullish trend since 2016.Price reached the major level got resisted and sellers took over the market. Bears got exhausted around September 2018 and there was resumption of the bullish take over. Last week price formed a pinbar then followed by a strong bearish confirmation this week. Moreover this week’s candle has engulfed the previous 4 candlesticks and closed below the near term level.

SUMMARY:

Patience of a saint will be needed. The combination of the pinbar and confirmation could be a test of the previous break of the near term level  by the bulls in order to see whether it’ll now act as a support zone. Price may rally even though we have seen a break of the near term level. Alternatively it could be a total reversal of the uptrend and the beginning of a new downtrend. In order to validate the latter we need a confirmation of the bear power by a retest. Further price action will guide us on which path to follow.

On this pair we are also going to follow up on what we observed two weeks ago. Price was on a long term ascending channel. There was a bearish move to the lower boundary of the channel. Right at the lower boundary, formed a bullish engulfing candle. Later the following week a doji was spotted succeeded by a bearish candle. A candle stick pattern known as an evening star.

SUMMARY:

During the analysis of the pair we concluded that we had to wait for a bullish confirmation after the bullish engulfing formation. Here we have another perfect example of how waiting for a confirmation is paramount in trading profitably consistently. It eliminates the chances of getting faked out or caught up in false moves. Price formed a doji there after, showing indecision of the bulls then a bear candle pushing prices further bearish. At this point we’re back playing the waiting game. Additional guidance is needed with either more bear dominance to break and close below the channel or a resistance of the lower boundary of the channel.

This week’s analysis will consist of a follow up of the previous week’s work. In the past 5 trading days on the pair, price broke and closed below the neckline momentarily. Which was then followed by a rejection of much lower prices and price pushed further up. The recent bullish move is seen to have reached on the level of the left shoulder of the head and shoulder chart pattern.

SUMMARY:

Remember we mentioned previously that in order to trade the head and shoulder pattern we have to be patient for a break and close below then followed by a confirmation. Basically the pattern is only complete if the latter happens. However our pattern was not completed, buyers took over the market and bid for higher prices.It should be clear how waiting for a confirmation prevented one to be faked out by the close below of the neckline. Currently price has formed an inside bar. We’ll again have to wait for a confirmation from price whether price will continue bullish with a close above the mother candle or reverse and close below it.

Analysis:

We approach the analysis of this pair based on the weekly timeframe. In this pair we see that price has been trading on an uptrend for two years. On the lower boundary of the channel, prices have formed a bullish engulfing candle. This week’s candle has engulfed the previous three weeks candle, indicating a strong bullish push on the pair in line with the upward price channel.

Summary:

The formation of the bullish engulfing candle shows that there’s a strong bullish momentum after the bearish retracement. This implies rejection of the previous bearish move. We will be analyzing for buy price action signals in the lower time frames of the daily and the 4-hour as long as the bulls can sustain their upward push. Waiting for price confirmation is paramount as they help us not to get faked out.

Today we are going to look at a recent topic we discussed in our first webinar the power of breakout trading. This pair had nice breakout trades that worked really well.

I want you to note how the market topped in the previous bullish trend. Can you identify the price pattern highlighted in yellow? Do you see the candlestick formation in the right top of the chart pattern? If not, feel free to visit www.fourthstreet.co.ke for more information on our Price Action Trading Course.

As you may observe we see a break of the red trendline in the fall of the GBPUSD and we see close outside the bear trendline. Next we see a peculiar candlestick formation that show indecision. Then a strong decision confirms the investor sentiment. What is the price telling you? What is there to say when the price does the talking?

Summary

Our bias on this pair is to stay alert and we will have a very close to see how the bulls will react as price is at a zone of resistance.

Weekly Analysis

Hello guys,

This week we’ll be looking at the GBPJPY pair. We see that the pair has been on a downtrend for the most part. The main trend is bearish. Prices found a bottom and made some retracement. Then we see prices trading within a descending channel. At the most recent bottom of the descending channel, we see a hammer, signaling that there’s a high probability markets will reverse. They actually did reverse. Now at this point we have to wait for a clear breakout of the descending channel in order to have a clear signal of where the market will be headed.

Summary

Our bias is still bearish. The bulls have made a strong comeback by rejecting the prices moving lower and the confirmation by the bullish weeks.

A breakout outside the descending channel may show that the investors sentiment has changed and with the political drama of the Brexit we need to be careful trading this pair.