AUDUSD has shown several weak signals approaching the down trendline, which was a confirmation that the downtrend was to continue. After some strength on the end of the US Session at 15/July (blue dot), the market reversed and it rallied to the trendline once again. Upon reaching near it, the market tested for demand in the market, by marking up the prices and waiting for activity to show up. The volume was relatively low, below the average, and the prices failed to rally, which means the No-Demand test marked by the pink bar, failed, and there was lack of demand in the market.
Shortly after there was an alert on a trendline nearby, and the price hit the first target already, which guarantees we’re not losing anything in this trade. Before the downtrend continued, there was a 2nd similar alert. For a future short entry prices must come up near the trendline again, to guarantee a good Risk:Reward. Also look out for strong signals in this price area, because of the 15/July strength, which could turn the trend.
In this trade there were 2 major mistakes:
1. There were demand signals before at this price level, so any short should be avoided, unless the price had made a very significant rally.
2. There was no weak signal before the trend change. This is necessary to guarantee there is some smart money support for the down move
1. Background was weak
2. Wait for an up bar near the broken support. Entering on the break-out bar, about 2 hours before, is also valid, as long as it has a volume above average.
3. Set the take-profit on the red-line of the StopLoss indicator for the S/R Breakout setup. If there were strong signals (Major Demand/Demand signals) before they would be the exit point instead.
After the Greek voted ‘No’ on accepting the Troika’s bailout proposal, Euro gapped down at the opening, in seeming weakness. But lower prices meant it’s now a currency more attractive for buying, which is what institutional traders did – we can see 2 major demand bars, still in the Asian session, and afterwards test bars (Oanda’s feed). EURUSD also failed to break the previous support at 1.095. I’d like to see either a trendline break or the prices testing the demand zone, to get in long at a better price and to ensure the trend is really about to change. The daily trend is still clearly down, and this move is happening after major supply at 1.134 in the beginning of June, which could dominate over these smaller trends if there’s not enough strength for a pullback to happen.
GBP/AUD was near a support after the low at 18th June (red line below prices). Everything fit into place in this trade for the Support/Resistance trading setup.
1. Background was neutral
2. Demand signals near the support, which is the smart money buying into a previous area of demand
3. Went long in a test-like bar (part of long type bars), shown by the volumes indicator
4. Exit in a weak signal. Holding through the weekend and exiting on the trailing stop was also OK
Gold (XAU/USD) and Silver (XAG/USD) are naturally, two very correlated commodities, and the recent action is no exception.
Gold is near a support and a previous broken trendline. There was recent strength (blue signal) with moderate volumes, in an area of previous strength, which could be the first signal the support is holding, but so far the market doesn’t show signs of stabilizing – it keeps making new lows, and the background is still weak.
Silver is too near a support, and in the mid of a down trending channel. Given the price range silver showed today, and the fact it broke a previous support at 15.8, it was expected that the recent strength has higher volumes than in gold, since more traders and stop-losses were ‘shook-out’. Like gold, it’s making lower lows, and the background is still weak mostly due to the downtrend. I would like to see a rally to finally break the downtrend and confirm the recent strength was in fact accumulation; if the downtrend is to continue, it’s probably going to test the demand at 1162 in gold, which occured in early June. In the case the market rallies and it gives an opportunity to enter, I’d be more inclined to invest in silver rather than in gold, or at least to have a larger position in silver, as XAU/XAG (Gold/Silver ratio, tradable in some brokers) is showing major selling, which it’s preventing it to break a key resistance.
