04/09/2021 Breakdown
DXY – Multiple Scenarios (1) Long
Slow but a strong week in the markets last week. Two trades taken on GBPUSD and USDCHF taking +3% from the market. The market continued to move with little volume up until the NFP release on Friday, because of this there was quite a lot of noise in the market.
Next week in the markets we are looking at a few different scenarios on the DXY. The first is a long position from current price action. We highlighted that fact the DXY closed in a really interested area to see some upside. Because of this I will be monitoring how price develops when we open. If we develop the characteristics of a accumulation / reversal then I will look to get in long. However, we must remain patient with this one, I'm not interested in trading anything below the 1hr/2hr timeframe here. If this were to happen I think we can trade the move up the the retest of the H&S neckline and reassess from there.
DXY – Multiple Scenarios (2) Long
The second potential outcome is if we see the market open lower and continue the current price action trickle we are seeing on the lower timeframes. If this were to happen I would look to see the DXY in and around the 91.500 region where we can begin to look for LTF confirmation. There is a really nice 1hr OB within this region that has yet to have been mitigated.
If this scenario were to play out we have to be prepared for longer term $ upside as it would complete a larger descending pattern and a structure that hints a bullish outcome.
EURUSD – Long and Short
EURUSD continued trickled its way higher last week meaning there wasn't really a setup on the cards to take short, the pair didn't show signs of any bearish LTF confirmation.
Next week we're starting the week mid range in-between two dynamic trend lines. I've drawn out quite a steep ascending channel that I would like to see completed to see longer term downside so if we can trade this pair on the way up I will look for buy opportunities around the 1.18000 region. There is a clean 1hr OB that is yet to be mitigated here so with the right LTF confirmation it looks great for upside.
Alternative we see price continue to trickle higher, if this is to be the case I will look for entries in HTF orders situated around the 1.19500 region for short opportunities.
EURGBP Long and Short
We covered EURGBP pair last week so the HTF move is fairly straight forward – we're just looking for price to interact with the dynamic resistance we're seeing around the 0.86000 region.
However, due to last weeks sideways movement we now have a really clean ascending channel forming which has cemented the move making it higher quality. At the moment we have only 1 touch on the support trend lines so when the market opens my eyes will be on how price interacts with this second touch region. There are some nice LTF orders around the 0.85600 region so with the right development down here I will look to get in a short term long to trade into our HTF short region.
CADJPY Short and Long
The JPY pairs also trickled higher last week but are beginning to develop really nicely heading into the new week.
CADJPY has formed a nice rising wedge pattern into orders. On this pair we have actually completed the 3 touch structure and grabbed liquidity already so if we're looking to trade the short we need to keep a close eye on how the market opens. Ideally I would like to see this 3rd support touch of the wedge completed before looking to get in on the short. However there are a few different way this could play out on the LTF and we will keep you updated in the PRO Telegram.
For the Long position keep an eye on the 86.200 region and wait for LTF confirmation. There is a completely unmitigated OB within this region so I am expecting to see some form of rejection that could potentially be the catalyst for a longer term move up into the 89's.
GBPJPY Short and Long
This is a very similar setup to the CADJPY previously covered and I would expect the two to move at a similar time. When the setups occur we will just have to use our discretion to work out the relative strength of the GBP vs CAD.
Again on this pair we have a clean rising wedge that is working its way into orders. Essentially I'm waiting for the lTF confirmation to trade the short. Any significant break of lows followed by a pullback would a be a good way to get in. Ideally I would like to see the market shake out last weeks sellers grabbing that final piece of liquidity before any committed move so don't be surprised to see price push down at market open before one last drive higher to catch people on the wrong side of the market.
For the long I would like to see price just above the 150.00 region, this would mean price action is interacting with the neckline of the inverse H&S drawn whilst also mitigating a clear OB.
EURJPY – Long To Short To Long
Lots of opportunity on EURJPY. We first have a long scenario after lows where swept before breaking highs. This naturally leads imbalance and orders behind that need to now be mitigated. I will be looking for a pattern or corrective price action into this area for longs. I will also want to see a LTF entry to get involved due to the fact that there are possible orders slightly lower.
The short position looks lovely, we have clear unmitigated orders that I will be looking for shorts from. This will also create the second high of the descending structure before the last push down to the 3rd touch of low for longs. In our bearish order block I will be looking for a LTF entry model in order to get involved.
GBPCAD – Short To Long
As you know we have had this one on watch for quite some time, The main focus for me here is the descending structure to the left of the chart. We know that price has cause for higher prices due to the bearish order block and imbalance sat above current price. We can now pair this with the descending pattern and bullish order block to paint a picture. I want price to move lower mitigate bullish orders, complete the 3rd touch and then one higher. There may also be opportunity for a short position down into our long zone. We have swept highs and broke lows on the hourly timeframe that has left orders behind. So this is where my focus will be early next week.
GBPNZD – Long (Wildcard)
GBPNZD has also been on watch for quite some time now and we're sat directly in our AOI. This is a wildcard due to the fact that this could become invalid on market open and we do potentially have cause to push lower due to equal lows. So its now just a simple case of waiting for some development in this area followed by. break of structure to the upside. If we don't see this there is simply no trade on the cards and we will have to reassess.
AUDUSD – Long
AUDUSD looks great from a higher timeframe point of view. We have mitigated weekly orders and now broke structure to the upside on the daily timeframe. its now a simple case of waiting for price to retrace to mitigate orders before the next move to the upside. As you can see we have also completed the descending channel which is another great sign for longs. Longer term targets will be the bearish order block, 90% rule and then 0.85000. This could be a beautiful move.
AUDCAD – Short To Long
Last but no means least is AUDCAD. This was a move that we called a while ago now, we wanted to take this to the upside due to the descending channel that where breaking lows. It just became overly corrective and wasn't easy to catch an entry. However we can now see that we have broken highs on the higher timeframe here so im now looking for price to correctively retrace into our orders, mitigate them and move higher. This could be a lovely longer term move that correlates beautifully with AUDUSD.
We do also have the opportunity for some short term shorts into our bullish area of interest. As you can see we had equal highs to the top of this area that where wicked through and purged before impulsively pushing lower and breaking lows. This naturally left orders behind so if price action is correticve into here I will be looking for a short position.