Is Aussie Dollar (AUD) Topping in the Hourly?

Aussie Dollar (AUD) pairs are showing some temporary weakness in the 15 minutes to the hourly timeframe, which may result in a short-term reversal. In this post, I analyzed the market’s supply and demand on the 3 of the most traded AUD pairs: AUD/USD, EUR/AUD and GBP/AUD.

 

AUD/USD

In this pair there was supply at new highs, which often pinpoints the beginning of a downtrend – in new (relative) market highs, there just isn’t trading due to old resistances, and so any supply sign tends to carry more weight. Before looking for a short I would like to see another descending top (lower than the last 2) on low volume, a downtrend confirmation.

Note: Non-farm employment change and unemployment rate numbers are coming out tomorrow for USD at 1:30 PM GMT

 

Aussie Dollar/Dollar 15 Minutes

AUDUSD 15 Minutes


 

EUR/AUD

In EUR/AUD Hourly chart, the price is still moving in sideways, but the volumes are telling another story. They spiked on the market lows, which means there was mostly demand in the last 2 days. A low volume rally to 1.44 would be the trigger for a high probability long trade.

 

Euro/Aussie Dollar Hourly

EUR/AUD Hourly


 

GBP/AUD

This pair is near a long-term support at 1.68, and just showed a major shake-out (blue dot). It’s probable that it may form an inverse head-and-shoulders, that given the accumulation, would show strength. Even if that doesn’t happen, though, a dip to around 1.687 (previous low) on low volume would still give a long opportunity with a favorable risk:reward.

 

Sterling/Aussie Dollar Hourly

GBP/AUD Hourly

Trading London Open in EUR JPY

In this trade, I went short after VSA gave a weak signal, together with the weak background + weakness nearby for quick 30 pips. It’s usually a strategy that works in London open, as volumes tend to spike at these hours.

 

Taking the VSA signal at London Open

  1. The background analyzes both the trend and supply/demand signs in the market. In this case, it was showing that the market was weak, which means you should be looking for shorts
  2. The market showed weakness behind, seen by the wide high volume (red) down bar, closing on the lows. This is a supply sign, that is even more important during a downtrend.
  3. Finally, a weak VSA signal (minor supply) triggered the trade, and a sell-stop was used at the bar’s low.

 

Trading London Open in EUR JPY

Trading London’s Open in EUR JPY

Major Forex Pairs Outlook for 2017

By the year’s end, volatility is certain, and coincidentally, there are usually many trading opportunities across Forex pairs.  This year is no exception, and we found 3 trading opportunities among the 4 major pairs, which can possibly be taken by January/2017.

 

EUR/USD (-4.29% year-to-date)

Euro/Dollar just broke an important support at 1.05, and it’s very close to reaching parity, currently at 1.038. The support was broken following major supply in November, and it kept showing selling volumes on the way down, and during the breakout. After a short-term rally on low volume just before Christmas, it keeps heading lower. Despite the historical lows, solely based on the market’s supply and demand, it’s a good time to short it.

Daily background: Weak

 

Support Breakout in Euro/USD Daily

Support Breakout in Euro/USD Daily

 

GBP/USD (-17.15% year-to-date)

There was a selling climax, just before the October’s rally surged. Most recently, at November and December though, the Sterling/Dollar has been showing supply, and the short-term support 1.21-1.23 won’t probably hold. The ultimate support is 1.20, and if there are no significant changes such as VSA demand signals, aim to short in the breakout.

Daily background: Weak

 

Near Support GBP/USD Daily

Near Support GBP/USD Daily

 

USD/JPY (-2.05% year-to-date)

Following an accumulation consolidation, that lasted for 5 months, USD/JPY started a major uptrend. To trade the daily, there should be a retracement first, to around 114. There are no resistances ahead, and so an uptrend still has much room to go.

Daily background: Strong

 

Uptrend in USDJPY Daily

Uptrend in USDJPY Daily

 

USD/CHF (+3.00% year-to-date)

Similarly to the Yen/US Dollar, USD/CHF also went through an accumulation process mostly due to the strength in the US dollar. The rally has been showing good volumes, and as it’s just approaching an important resistance at 1.032, a breakout would be a trigger for a long trade. The next important resistance is at 1.17 which gives enough room for a favorable risk:reward.

Daily background: Strong

 

Near Resistance USDCHF Daily

Near Resistance USDCHF Daily

 


If you wish to trade EUR/USD with our indicators for free, you can try it here.

When to Enter in a Trade (Trade Review) – USD/CHF M5

 

USD/CHF Trade Review

USD/CHF Trade Review

 

This trade was taken in the 5 minutes timeframe at the today’s London session. There were 2 things going for the trade:

  1. The background was strong at the time
  2. There were multiple demand signals nearby (strength)

But sometimes the market only gives 1 shot, and this was one such example – the opportunity was missed when there was a down bar with about average volume. The trade was taken when the rally was already underway, and the volumes were drying up.

Try our Full Package FREE DEMO!

How to Trade EUR/USD in Tomorrow’s London Session

Background (15 minutes): Strong

Support: 1.0400

Resistance: 1.0479

 

Trading Euro/Dollar in London Session

Euro/Dollar 15 minutes

 

Euro/Dollar just broke out from an important accumulation pattern of the last few sessions, that peaked at 1.0418.

  1. At point 1, we can see that the breakout was on good volume. Together with the buying seen in the pattern’s lows, this shows strength, and we should be looking for a long trade at the moment.
  2. This was a testing bar, testing for supply at the resistance. If prices keep staying above 1.04182, there is probably not enough supply for a downtrend, and we can expect further rises in prices.

 

Suggested Strategies

  • Look for a low volume down bar, or a demand bar by tomorrow’s London session, for a long position. Make sure to close any trades before 1:30pm GMT, as unemployment claims and the final GDP numbers for US are coming out.
  • If prices dip below the critical price 1.0418, re-evaluate depending on what happened during the most recent news.

 


If you wish to trade EUR/USD with our indicators for free, you can try it here.

Euro/Yen’s Bounce Off Resistance on the Hourly

Background: Weak

Entry reason (1st trade): Low volume up bar on resistance, with weakness behind

Close reason (1st trade): Demand signal

Entry reason (2nd trade): Low volume up bar and failed test

 

Euro/Yen Trade

Euro/Yen Trade

 

Following up on last week’s post about Euro/Yen, upon reaching the resistance, this pair continued to show supply just above the zone at 123.44, and the background soon turned weak.

  1. First short trade on the break of a low volume up bar, inside the weak zone. Closed when there was a demand signal, and the traded end up being barely break-even.
  2. I took another short trade on the break of a low volume up bar. This was also a failed test, which showed further supply. Holding the trade until the support at 120.900, or further strength in the market.

Congestions Indicator (New Video)

We have just released the video explaining the most recent indicator, Congestions. It’s an indicator that detects certain supply and demand patterns which form buying/selling zones, and serve as supports/resistances.

This is an improvement over standard supports/resistances, that don’t really take real supply/demand into account to draw the resistance areas, which has to be seen by the volumes. This results in more reliable and predictable resistance areas.

You can check the video below:

 

Euro/Yen 2-Week Trend is Broken – What’s Next?

Hourly Trend: Down

Resistance: 122.800

Support: 122.142

 

Euro/Yen Hourly

Trend Changing Euro/Yen Hourly

Euro/Yen Hourly – Trend Changing

 

Euro/Yen’s been trending for the past 2 weeks, but on today’s Tokyo session, the up trendline that was in control, just broke.

Point 1: In this top, there was heavy supply by professional traders pointed out by the VSA indicator [Free Demo], as the market made a top on high volume, and went into a downtrend in even higher volumes. This happened when touching a weak congestion zone (selling zone) above, and all together, it’s a common reversal sign.

Point 2: On the reaction a few days later, the market reached 122.970 on low volume (volumes lower than average). With such selling behind, this is never a good sign, and the market then went on sideways.

Current time: As the ranges have been narrow for the last 2 sessions, this action can be better understood in a lower timeframe, such as 15 minutes.

 

Euro/Yen 15 Minutes

 

Trading Range in Euro/Yen 15 minutes

Trading Range in Euro/Yen 15 minutes

 

In the 15 minutes, we can see that the market is in a trading range, with a buying zone below, and a selling zone above. The current rally is happening on high volumes, and so it’s likely for the trend to continue until 122.8.

 

Suggested Strategy

Wait for prices to go to the resistance at 122.8, and look for further supply or low volume up bars in the hourly timeframe.

Will EUR Rise Over USD?

Dynamic trend: Turned up
Background: W1 – very weak; D1 – weak
Phase: Markup
Support: 1.066
Resistance: 1.079

 

 

EURUSD: Hourly

EURUSD: Hourly

Considerations

Point 1: We can observe “Shakeout” with very large volume and a wide range, on a weak congestion zone. This movement alone indicates absorption of supply, but the subsequent down-bar indicates that the supply is still high, and the market is not ready to grow.

Point 2: “Test” with a low volume and an average range. Follow up-bar indicates the success of the maneuver.

Point 3: There was a breakout of the congestion zone with a high volume and wide range. In TF M15, a successful test occurred and then continued to grow.

Suggested Strategies

Strategy 1: Consider buying if:

  • The price breaks out the resistance level 1.079 and
  • «No supply» occurs.

Strategy 2: Consider to buy if:

  • The price pulls back to the support level 1.066;
  • «No Supply» appears (down-bar with a narrow range and a low volume);
  • And the price reverses up.

Strategy 3: Consider going to sell if:

  • The price breaks down the support level 1.066 and;
  • «No Demand» appears (up-bar with a narrow range and a low volume).

Tips

You can search «No Demand» and «No Supply» on a lower TF.

Know more about CONGESTION ZONES

Dynamic trend: Turned up
Background: W1 – weak; D1 – strong
Phase: Markup
Support: 113.60
Resistance: 116.00

 

USDJPY: Hourly

USDJPY: Hourly

 

Observations

Point 1: There was a breakout of the resistance level, with an average range and a high volume. The following up-bar confirmed buying. In addition, on a smaller TF, we can observe a successful testing after this breakout, which confirmed the validity of this movement.

Point 2: We may see a “Shakeout” with a wide range and very high volume. Because the subsequent bar was a down bar, and the volume was high, we may conclude there is a large supply in the market, which must be tested.

Point 3: A second breakout of the resistance level (113.60) occurs.

 

Suggested Strategies

  1. Consider buying if “No Supply” appears (down bar with a narrow range and a low volume) near the support level 113.60.
  2. Consider selling if the price breaks down the support level 113.60 and “No Demand” appears (up bar with a narrow range and a low volume).

 

Tips

You may search «No Demand» and «No Supply» on a lower TF.