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

This week we are going to look at the GBPNZD on the daily timeframe. This is one of the most volatile pairs in the forex markets. It is quite clear when we look left, prices have been on a very steep downtrend. We can confirm the steepness from the gradient of the trend. Price later reached a near-term support then rallied up momentarily. Following the rally, there was a consolidation in form of a chart pattern. The pattern is known as a head and shoulder pattern as illustrated on the chart.

Summary:

Consolidation is an indication of indecision between the buyers and sellers. Price was supported twice on the neckline of the pattern but eventually broke and closed a few pips below the neckline. At this point, we will hold on for prices to confirm the breakout from the neckline, as we know it is possible for prices to gain some bullish momentum and rally back up to the level of the left shoulder. Therefore to confirm bear power a pullback/retest is important to verify that the neckline will resist price from rallying back up past the neckline and push downwards.

Today we shall approach the analysis on this pair from the weekly timeframe. We establish that prices on the pair has been ranging for some years since 2014. The market has been on a major consolidation, and currently, price is ranging in the form of an ascending triangle. In addition, the flat side of the ascending triangle, lies on a major level that has acted both as a support and resistance level in the past.

SUMMARY:

In as much as we have an ascending triangle, it is not obvious that we should now open long positions. Instead, to go long we have to wait for a breakout from the triangle and the resistance line, i.e. a retest and a confirmation before open a position. Price could also be resisted at the major support level/the flat side of the triangle and push downwards. Therefore at this point, we should sit on our hands and wait for the market to guide us on the next course of action.

Analysis:

This week we are going analyze NZDUSD pair.  The long-term trend on this pair is bearish, if you look from the left side, prices have been trending downwards for a sequence of months since last year. From the chart, prices of the pair bottomed and started trending upwards. Prices have been currently consolidating in the form of a symmetrical triangle as drawn on the charts. On the lower trend line, we find that an indecision candle formed, in the shape of a pinbar. This indicates market indecision between buyers and sellers at a significant near-term support level.

Summary:

With the formation of a pinbar, we will be watching for chart patterns and candlestick formation for confirmation signals in order to pick a bias on the pair. With the formation of the symmetrical triangle, and based on the price level of the near-term support level, we will hold on for the prices to guide us on whether will be going long or short on the pair. We anticipate a break-out on this pair.

USDJPY Currency Pair 4th – 8th Feb, 2019: Today we are going to look at the USDJPY pair and we are going to show analysis on a different timeframe, the Monthly. Remember in our price action course we emphasize the TOP DOWN APPROACH when analyzing the market. If we spot candlestick formations in the monthly, this provide a higher probability trade setup than the lower timeframe.

Now we may notice the main trend is up and the currency has been trapped in consolidation in form of a symmetrical triangle.

The pair has recently hit a zone of a support and we a monthly pin bar forming in that zone.

Summary

Will the bullish trend continue? Which direction will the pair break out of the consolidation? We will keep a keen eye on this pair amid confirmation of the direction this pair will head. As always we wait for the price to guide us on the investor sentiment.

ANALYSIS

The pair has been consolidating in a descending channel pattern. We see that the price has been making lower highs and we see a weakness in buyers. We see an aggressive move to the downside and the price is on the floor of the descending channel.

Will the sellers be strong enough to push the prices further down and or will this floor prevent further downside? I hope you note the candlestick formations highlighted in the green boxes. The price is talking but are you listening?

Our bias on this pair is neutral. We will wait to see how the price will react at this zone of support. Will the buyers ease the sellers’ pressure? As you know how we do it on FourthStreet Consultants we always let the price guide us on where the market is headed.

Analysis:

This pair has been on a clear uptrend. This pair has been trapped in broadening tops chart pattern and the price has attempted to break the channel but the bulls could not keep up with the momentum. We see the prices soon closed inside the pattern which shows the importance of waiting for candle to close.

This is a perfect example of how the buyers are trapped in the fake breakout.

The sellers have stepped in they are pushing the prices down the bottom of the channel.

Summary:

Our bias for this pair is bullish although we need to see a clear breakout on the channel to hint us that the investor sentiment has changed. The price will guide us on our position as the prices approach the near term support whether the bullish trend will continue or the seller will prevail.

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.