Mercury

Similar set up on AUDUSD as in play on EURUSD.

Possible turn back bullish on EURUSD with an A-B-C retrace to the Fib 76/78% support zone and small 1-2 then rally, not quite away yet but looking like it might. PMD showing at both the wave A and wave C/2.

Dax gap up from last night has been closed, as would be expected. I would also expect all the other major indices to follow suit. Now looking for the Dax to test that short term support zone around the 12300 mark and a break of this gets us into open country.

So The Nikkei did break out of its channel to the downside and the Dax put in a lower high with NMD that looks like a short term retrace rally. I am still waiting for a break of that ST support zone but I am Short the breakout on the Nikkei and the retrace turn on the Dax and stop protected with minimal or no loss. My current thinking is that we will see another set of ATHs on US large caps but only retrace rallies on other major indices. The end should be accompanied by Gold/Silver retrace turns and rallies However the price action last week keeps alive the possibility that we have already seen the final ATHs on us large caps. I will illustrate this technical set up with the SP500 as follows: I think the bearish phase that started in Sept 2018 is clear on the weekly chart as a 3-4 retrace and now that we have a fresh ATH the ending wave 5 is simply a matter of time. Is it already here or is there another leg up is the question. There is negative momentum divergence at the ATH on the weekly chart that is stronger than the Sept 2018 occurrence that produced the Christmas bearish move, crushing all the Santa Claus rally hopes. Given the stats on the Santa Claus rallies this could be construed as a signal that the great Bull may be coming to an end. The ATH is at a very long term trend resistance trend line and the Friday 13 Sept 2019 top was slightly lower but posted an effective double top with the ATH. On the daily chart there is also NMD at the ATH and a possible 1-5 EWT count up to the ATH (albeit an unusual one but that might be expected of an ending wave). In addition there was an ending channel (AKA diagonal) leading up to the ATH turn. The price action since Feb 2019 has been contained within a parallel line channel, the top line of which was hit for the ATH turn and also has a number of strong prior pivot touches (not shown). The drop from the ATH can be seen as a 1-5 down (a wave 1). And here is the first wrinkle because it could also be seen as an A-B-C (i.e. a retrace rather than a motive move, that would indicate an other leg up to a fresh ATH). Assuming it is a wave 1 then the rally since is in an A-B-C on all major indices. The fact that no index put in a higher high is consistent with a retrace and therefore a small scale 1-2 completion with the next move being a fast and strong wave 3 down. This will be proved if the previous low is exceeded. If not then another ATH can be expected. The 1H chart also posted NMD at the Friday 13th turn. Wave pattern is consistent with a wave 2 and C. Again the rally looks like a retrace to a mini double top, which fell short of the previous high. On the COT data the peak Longs and peak net positions of non commercials was at the Sept 2018 high. Since then the non comms have been steadily unwinding their Long positions, down almost 200k since those extremes of Sept 2018, while Shorts have been on the rise. Perhaps this is to be expected given all the recession talk and maybe we are due a surge to fresh ATHs on both price and COT? Perhaps it is signaling a rally running out of support with only share buybacks keeping it up? Time and price action will tell the tale. All other US large caps can be seen in the same way as the SP500. All the other indices look to have topped much earlier than Sept 2018 and the price action to Sept 2018 is consistent with a 1-2 retrace. The price action recently is consistent with a smaller 1-2 retrace with the exception of the FTSE100, which is less clear. Even here though there is an interesting bearish signal in that it has recently posted a Death cross (MA 50 cutting MA 200 to the down side). USDJPY has also turned down exactly where it was signaling, this FX pair typically responds to the Nikkei with a stronger Yen being reflected in a weaker Nikkei. USDJPY roadmap shows a medium term bearish period at least. So net I slightly favour another leg up to fresh ATHs on US large caps and the price action will be very important on such a move to spot the ending phase of the wave 5. However the case for the end of the bull is also very strong so I cannot rule it out, indeed it is about 50/50 in my estimation. Thus I am short several indices including the S&P500 as indicated. My approach is to hold these at break even and watch price action over next week to see if the move down turns very strongly bearish or holds up above the previous low. If it is end of the bull we can expect to see some very bearish moves to signal this.

That USDJPY turn looks to be confirmed with a break of a potential ending channel in confluence with the Fib 50% and failed retest of the previous Pennant formation. A solid bearish move on the last two daily candles of the week in line with a late stocks drop is boding well for a sustained medium term bearish phase for this pair. This may be at odds with other pairs for a few days or so but I expect USD to turn bearish sometime next week, in which case I see this pair dropping hard, which would be in line with the EWT set up of a wave 3 down. A continued period of stocks weakness would add to the momentum on this pair.

Looks like we are getting that relief rallyvon Gold and Silver, which is in line with my A-B-C retrace bearish move road map. If this continues according to the road map then the current rally is a wave B. When it concludes there will be a strong wave C down and this is the point to Short if the mood take you. This is coinciding with both a short term rally on USD (DX) and a late bearish move on stock indices on Friday. I expect the bearish stocks move to continue for a bit, especially on non US large caps to complete their wave Bs. We may see a correlation conclusion of these wave Bs between stocks and precious metals. I also think USD DX will rally a bit further, with GBPUSD in particular putting in a strongish bear move in a 1-2 retrace. All the main USD pairs except with the Yen are likely to be bearish vs USD.

Some commentators have been calling for "business as usual" on stock markets post the Fed, there has been quite the hubristic complacency about, which is interesting to a contrarian, the markets are usually unkind to that kind of thing. Continuing on the Dax theme the breakout of the previous channel remains intact. One might have expected a stronger rally on US large caps after the Fed rate cuts but then again 25bps is a bit of a lukewarm response to other major central banks. There has been a rally but so far it looks to me like it may just be a small retrace (or relief) rally. Right now we can see this breaking down after an A-B-C form move and with NMD at the recent turn. Note the top on the Dax occurred at the Fib 88% and, if my road map is right, this market needs a bearish phase to prime the pump for the "final" rally (likely NOT to ATHs on the Dax but yes on US large caps). If I add the Nikkei to the mix I see something uncannily similar to the Dax. Unlike the US large caps these 2 markets posted their ATHs in 2018 and since then have been in what looks more like a retrace rally than a motive one. Like the Dax, the Nikkei put in a recent top on the Fib 88% (the previous high was 3 May) and is currently still within a bullish channel. However there is strong NMD on 4H and 1H charts and a bearish pin bar forming on the Daily. While the day is not yet done globally, it is in Japan... Last night we saw a spike and drop to the lower line of the channel, which is where the market has remained. We may yet see some initial rally price action on US open but with little on the economic calendar of note remaining for the week if the Fed action turns out to be insufficient to keep the bubble inflating then some air is gonna leak out. I do not yet think this is the end, although technically it could be if the previous ATHs on the US large caps were the end of the Bull as some think is likely, rather I think it will be a significant bearish move that may shed light on the likely end game. From a trading perspective I would be looking to Short a breakout of the Nikkei and an break lower on the Dax.

I watched an interesting expert interview on RealVision yesterday with Simon White of Variant Perception, a macro research outfit. His thesis is the first one that fixed a conundrum playing in my mind, which is the question of whether we will see a deflationary recession or a hyper inflationary resolution to the current economic malaise. I could see aspects on both in the technical set ups of various markets. Proponents of the former are calling a 1929 type event, and you can see where they are coming from easily enough but they also call for a related bear market on precious metals. My bias on PMs is for a large bull market but I can't square it with the deflation scenario. Also while consumer prices may be high underlying commodity prices are not particularly high. The Hyper Inflation supporters suggest the central banks will eventually get the inflation they are seeking with their theoretical based policies BUT that they will not be able to control it and therefore hyper inflation, which would be good for precious metals and frankly commodities in general. There was also some chatter about a commodity super cycle being in a downwards trajectory, which would support the deflationary scenario BUT if you look at individual commodity charts, say coffee or silver or natural gas, they are anything but high, in fact quite the opposite! You see my conundrum... So the punchline is that Simon White thinks central banks will switch from their current strategies to what seems to amount to helicopter money, there is a lot of technical discussion in the piece, which I wont attempt to summarise, but long story short the current policies have not encouraged corporates to invest, rather they have been engaged in Financial engineering that has resulted in the rich getting richer (on paper at least) and increased social unrest as the rest of us express our dissatisfaction with this situation (including having to work multiple gig jobs to survive - so much for full employment!). The thesis is that central banks will act on this social pressure and in doing so we will first get a period of deflation (certainly of asset values) followed by hyper inflation of real assets. The result of this will be a flight away from Financials (stocks etc) into real assets (i.e. commodities and precious metals). This resonates with my thinking (see my thread on Dr. Copper where I suggested a one or the other resolution to the issue and on coffee where I am calling a major bull market in due course). If this holds true then we might expect further deflationary drops on commodities (and probably PMs - are we already in this?) before monster rallies. We may expect stocks to rollover and die, maybe bonds too eventually. I persoanlly also expect house prices to plumet, further fueling a flight out of financials as property owners feel poorer and or get caught in negative equity (a consequence unknown to anyone who bought a house post the early 1990s). I am writing his on the USDJPY thread because Mr. White also touched on the currency war aspect of the kind of central bank policy he is foreseeing. And he sees Japan as the canary in the mine. Again long story short he expects to see Japan really go to town on these policies, they are all in with Abenomics already and haven't quite got the results they are looking for yet. He forecasts that this will at first go against them with the Yen strengthening and then they will finally get what they are looking for, a huge devaluing on the Yen against the USD. This macro assessment exactly matches my technical analysis and is much more compelling than my own poor macro assessment. So much for all that, and if you have access I would highly recommend checking out the interview with Simon White, but where are we on the charts. My long term assessment has been posted previously on this thread but my previous post was tracking a potential retest of a pennant, a point I would be expecting a turn back to the bearish side. This is what we got overnight with a hit on the Fib 50% as well and a sharp drop. This morning we are seeing a short term retrace, which may already have concluded or could run up a little further. We also saw a spike and drop in the Nikkei, which is a typical correlation. I do anticipate further falls in the Nikkei to support the Yen strength short to medium term, after than I think USD weakness will be the principal driver of this pair. I am already Short this market and looking for a break of the 10,740 support zone to confirm the turn. The potential on this one could be large, maybe all the way to 8,000 but we need to see a breakout of the long term Triangle and horizontal support zone around 10,400 to get excited about that.

So the Fed is done, 25BPs as per consensus but not exactly what a lot of players were really calling for and no doubt the Tweeter-in-Chief will have something to say about that, if he hasn't already. Now that it is done my question is where does that leave us? BoE still to come today but that is only really relevant for GBP for me. On the charts it looks to me like the retrace I was looking for is done (hit on the Fib 62%), I can't be sure we wont get another rally to the Fib 76/78% level but I might have expected that off the back of the Fed decision and press conference last night. Several USD FX pairs are at turning points against the USD, or have executed credible turns (from a technical perspective) already, so the deck seems set for the USD bear move now. I will start to feel more comfortable with my positions when I see the next ST support level broken on DX. EURUSD is a fairly exact mirror of this chart set up BUT GBPUSD looks like it may have a bearish move left in it before the breakout rally continues.

Short answer is yes if you let it @BMP2020 However your gym story could have substituted any career or job type and still it would have rung true. You are really asking what makes people disillusioned with the life, and work, they choose. A subject for a psychology forum rather than a trading one. Still a few things to consider to avoid negative psychological changes might include: Finding the right trading approach, one that suits your lifestyle aspirations and personality - day trading is not right for everyone, not right for most people I might argue, based on the failure rates... But there is more than one way to trade. Most people are unhappy with work that doesn't suit them in a fundamental way. We tend to spend most of our working life acting the part by adapting our personality to what we think is required rather than being ourselves. With personal trading, with no boss, the least we can expect of ourselves is to be true to ourselves yet humans are masters at lying to themselves and lacking self awareness. As said before, learning how to lose; how to be wrong and what to do when we are is vital for your confidence and well being as well as your success. It helps if you do not make unrealistic and naive demands of your trading results. Expect to make losses to start with and to take a long time to sort things out. Only risk what you can afford to lose. Compartmentalisation is key. You have to be able to close the book on your trading at the end of the day and especially at the end of the week and shake off any bad feelings. That way you avoid taking those bad feelings with you into family and friendship interactions. You need to remain calm and composed at all times. When you are not, do not trade. One stratagem is to deal with losing trades quickly. If you avoid holding precarious positions overnight and over the weekends you will sleep better and be more composed. Oh and make sure you stay fit and healthy, get plenty of sleep and get out and about - enjoy the fine weather when it is available.

Have been quietly tracking coffee since my first post, nothing much to report until now. Didn't see that post from Guest Phil until just now (thanks for that) and it shows the basis for my thesis alright and also it highlights a fact than all western economy retail businesses know (at least I can say this for the UK, I assume it is the same elsewhere), which is that the cost of rent and rates is killing retail, especially town centres. By the way, if Coffee does go on a massive rally I wouldn't want to be owning coffee shop or roaster stocks (sell Starbucks! BTW, check out the Starbuck charts!!!). But that's another topic; as regards coffee trading my thesis is that the growers are not making money so they will switch, are switching, to other crops or leaving farming altogether. Would love to hear from anyone with an alternative take on this and especially anyone trading coffee or with experience of the coffee business. Looking at the charts then, my long term bearish channel is still intact but the price action since my last post is interesting. Initially I was looking for a fairly straight bearish run down in a 1-5 form that might signal the end of the market at some point and I was favouring a hit on one or both of my lower channel lines. I believe we did indeed see a 1-5 down but it was much shorter and quicker int he making and now the market looks to be topping out after an A-B-C retrace. If this proves correct then I move my initial 1-2 (green) to the current retrace and this signals a much longer bearish move that I might have at first thought. This could carry deep into the long term market bottom turning zone ($4-8) before turning back into a long term rally. Even if it only carries to the $8 level there a few 1000 points on offer for a small exposure Short here that is intriguing. In terms of the technicals there is a 1-5 down to the potential green 1 and an A-B-C up to the green 2, the wave C has its own 1-5, which is important to see. The turn is occurring around about the Fib 50%, classic retrace zone BUT is just short of the Fib 62% so we could see a test of that before the bear market resumes. The key oscillators are over bought (RSI just under maybe). On the 1H chart you can see the EWT labeling more clearly and a potential ending channel in play. Typically (more generally, not necessarily on coffee) I might expect price to hit the bottom of this channel and do at least 1 more round trip before breaking out but it doesn't have to and there is significant NMD at the recent high. I went Short just after the 1H spike (let's see if this turns into a daily pin bar candle...) and would consider a Short on a breakout of the lower channel line. I would be looking for a small 1-2, which we could see inside the channel or more favourably as a break and retest of the channel, which would be another good Short opportunity. I am guarding against another leg up. If anyone is trading coffee I would love to heard their views as this is a new market for me so I have little feel for it.

Another possible turning point in play. Sticking with the Dax for the moment to follow on from the previous post, I have a potential channel breakout to the downside (broken on the 1H, still in progress on the 4H). Bigger picture back drop to this (daily chart) is a break and retest of a lower channel line after the 3 July high (ATH was posted way back in Jan 2018, it is easy to forget that with all the US large caps focus...). Oscillators are over bought on the daily and I have a strong A-B-C form for the rally. I cannot tell if this is a wave A (green) of a bigger move up or a wave 2 (blue) termination yet but other markets lead me to the former rather than the latter at present so I am tracking a drop to a higher low than 15 Aug to set up a final rally phase. On the 4H chart you can see the breakout in progress but the unclosed gap gives me pause and so another leg up is very possible. However the gap may not be closed until the later "final" rally back up to higher highs takes place and actually if the market does now drop off the unclosed gap lends weight to my lead scenario. There is NMD at the the recent top, which also occurs at the Fib 88% off the 3 July top and a junction of 2 trend lines. On the 1H there is also NMD at the recent top and the breakout is clearer, albeit not yet confirmed to my satisfaction. I am looking for a break of the support zone around 12300-325 to confirm a bearish phase.

I'm not really sure what the motivation for the question is here: are you looking for a justification (is there hope?) to continue or a reason not to? I can't offer an answer to the second part of your question, that is personal to each individual, but the answer to the first part yes it is true that unsuccessful traders wind up giving back their profits and then some, which is one key reason they are unsuccessful. The crux of the matter though, and this is why your motivation is important here, is why the answer is yes and what, if anything, you can do about it. There are many reasons why traders lose, all traders not just retail. The literature is literally littered (a little alteration to lighten the mood...) with stories of famous traders that had significant growing pains in the early days. It rather seem to me that the only sustainable way to learn how to be a trader is to lose; to learn the hard way, and to learn how to lose. There isn't a short cut to this, although research and book learning is important to start with. And demo only gets you so far because real trading come with an insane level of psychological factors (just look at the tenor of some of the posts on this forum...) So while it is vital to have a system or methodology worked out (and ignore the trolls on this because confidence is also important) it is also vital to learn how to lose, because losses are a crucial factor in learning to be successful and in catching a trade with minimised exposure, and even the very best take regular losses accordingly. The difference between the successful and those destined not to be are many-fold but a few key one that pertain to the first part of your question are as follows: Not reconsigning when a trend has come to an end and knowing when to get out to maximise profits. Related to the above, holding on to your bias because it has been successful in the past - markets move in waves and sometime they reverse trend and if you don't recognise this when it happens you wind up trading against the trend and giving up all the profits from the previous wave and maybe more as you get more desperate to claw back. Not scratching losers quickly when the market turns against your hypothesis AND being reluctant to crystalise a loss at all, thereby holding on in the vain hope than the market will turn back in your favour (it rarely does...). A lot of retail traders talk about needing just 51% winners but in fact you need far few than than that if you let your winners run and cut losses quickly - lose small, win big. Failed traders wind up doing the exact reverse such that sometime they actually do win more than the lose but wind up as net losers financially. Thinking that trading is logical. It isn't, it is emotional (greed and fear dominate the markets - otherwise known as sentiment). That said you need to be in control of your own emotions or you will get sucked into the greed/fear whip saw and get cut to shreds. If you are not composed you will make bad calls. Related to this is blaming everything and everyone else for your bad calls. The markets don't care about you, they don't even know you exist. Big bad professional traders are not out to get retail traders, they are too busy competing with each other. The system isn't rigged as such, although manipulation does occur but it does in every market, not just financial markets. Retail traders, especially those losing, tend to be too preoccupied with these phantom issues instead of focusing on their own method, psychology and trading. Revenge trading - when you develop a mindset that a particular market "owes" you - a need to win back on the same market that you took losses on rather than switching to a better set up elsewhere. After a big loss my approach is to stay out of the market and analyse my loss to ensure I know why it happened and learn to avoid making the same mistakes again. Alas I often wind up relearning old lessons, which is another factor. Creating a "need" to make regular profits, which in turn puts too much pressure on the trader to find traders every day - the top guys do not trade everyday, they wait for the set up to be ripe. Additionally this pressure mounts up with each loss because now you need to make back your losses as well as make your regular profit, which makes the trading more reckless and results in more losses. One reason some successful traders start offering various services such as education; mentoring and tips is to get a regular income so their trading can be on a capital appreciation footing, which is what it needs to be. Believing your own BS - when a profitable trade comes off you start to get cocky and feel invulnerable so you take more speculative trades and don't stick rigourlessly to your method - this is about greed Over trading, especially after a good win. I agree with @Caseynotes but in addition, to avoid the issue in the question, a trader needs a firm grip of their emotions; needs to only trade when the set up is strong, not for other reasons; needs to cut losses and take the hit quickly, learn how to lose and need to have a method to get a sense for the rhythms of the market to avoid trading against the trend. It is about maximising your chances of success and minimising the pain when (not if) you get it wrong. There is a difference between trading and analysing (coming up with the premise for your trade) but there isn't much difference between trading and investing in the context of the premise of the question. In investing punters (and that is what they are) go in for the wrong reasons; at the wrong times and hold on too long when things go against them. They also, by and large, think they know more than they actually do about how financial markets operate. The only material difference is that there losses are limited to the stake invested whereas trading on leverage has open-ended downside.

Gold and Silver also seemed to react a bit to the drone strike in Saudi Arabia but not significantly. However it does pose a technical issue in that the small retrace I had previous labeled a 1-2 (brown on the 4H chart above), that set up a stronger bearish move, is no longer valid so that brings into play an alternative scenario that the wave B (green) is not yet in. The move off the 10 Sept low is in a series of A-B-Cs which projects a final rally to complete a larger A-B-C. My first target for this would be the Fib 62%, which is around about the previous rally channel breakout point; some horizontal resistance; and also where the wave C might roughly equal the wave A in length. In the short term we could see a bearish phase to close the gap before a final rally to conclude the overall retrace move. If this turns out to be an A-B (green) then the next phase will be bearish and probably a straight 1-5 pattern move (with a consolidation phase at some point) to the end of the retrace down; I am still targeting circa 1360 for this and Fib 76/78% for the equivalent move on Silver. A break of the 10 Sept low will negate the above scenario so my approach will be to wait for the pull back to the Fib 62% zone (circa 1530) and get Short on reversal signals OR go short on a break of the 10 Sept low. I see no case for a long trade at this point, unless you believe that 10 Sept was the end of the dip, which I don't. The alternative of a protracted consolidation phase is still on the cards although the price action of Silver doesn't seem to match a consolidation. If this is a consolidation phase then whip saw price action will be dangerous.

That was a bit different. Once the OMG moment is past I then reflected on 2 things: What does it mean in the context of my analysis? Are such shocks a sign of things to come? With respect to #1, the move last night brings up my alternate scenario, which I had thought put to bed but that financial markets for you, markets like Oil in particular I would say. Previously I had outlined that my wave 2 (pink) could be a wave A as part of a larger A-B-C and that now appears to be in play that could run up to the $80 mark in due course, unless the massive gap posted last night is closed quickly. Given the move last night I might expect some consolidation that sees a dampening down in volatility until we get a breakout. I will simply leave it alone for now and wait to see how price action develops. As regards #2, when there is a shock development like that it almost always drives Oil up rather than down. I suppose the only potential for a downward shock on Oil would be the discovery of a new massive oil reserve and how secret would that be really? It also makes me think about other shock potential. I would say that stocks tend to get shock down moves rather than up, opposite to oil. FX gets more unexplained flash moves, we have seen this on GBP in recent times or something like an artificial peg get removed like we saw on the Swiss Franc vs the Euro some time ago. I stay away from any such currency pairs, the Yuan (or renminbi) springs to mind... I have not done any research into this but it seems on a quick scan that shocks on FX tend not to go against the USD. I guess Gold and Silver could go either way although I would probably expect to see gaps up rather than down on shock events. If shock events are a thing we need to be more aware of, especially if we are coming to the end of a major Bull market in the backdrop of widespread social and political unrest (risk) then it makes sense to be mindful of this potential, especially for positions held over the weekend.

The retrace on Silver was remarkable shallow (only to the Fib 38%) while Gold made the Fib 50% (with a spike through and return back - very bearish). Now we see Silver has indeed broken both horizontal levels to lower lows and crucially the recent bullish channel. The form is very bearish with little retrace price action so it could either hammer down now or slow up as Gold plays catch up this time. It is typical that Silver amplified Gold so if Gold does reach back down to the neckline and Fib 50% then Silver may go beyond to more like the Fib 76/78%. On Gold we may have seen an A-B already and could get a fast run to the Fib 50% in a wave C OR, as depicted on the Silver chart, we could see a later wave A and rally back up to a wave B before a completion wave C. Impossible to tell which just yet, time and price action will reveal all. For now I will be adding to Shorts on relief rallies and watching for a possible wave A reversal to cover and possibly swing. At this point, and given the strength of the moves so far, I am setting the Fib 50% on Gold as my most likely retrace end scenario. If we see a period of USD bullishness next week and if stocks hold up ok ahead of the Fed then this would lend support to further bearish moves on Gold and Silver and possible quite dramatic as the fear of missing out on all those profits kicks in and as stops are taken out against the pure play trend followers.

Yeah that was the turning point alright and because it was at the Fib 38% and not the 50% I see it more as a 3-4 than a 1-2 so we may yet get that 1-2 (Blue) I referenced previously. I am short off the turn and stop protected at BE so will let this play out. First up is a test of the $56 zone and then the much more important $50 but here I might expect a hold and strong retrace before an eventual breakout. That is all in the future though and we may see a bit of retrace price action before a solid assault on $50.

Another market that put in a very deep 1-2 (brown) retrace to the Fib 88% and then rallied hard, thus creating the V-Bottom I referenced above. The breakout was a Long opportunity but I feel like this market is due another, smaller, 1-2 retrace, as with other FX pairs, and we may set a retest of the breakout support/resistance zone before the really really takes off. A breakout of the medium term Triangle line is critical to signal the retrace moved is fully on and then I will be looking for a large scale A-B-C to conclude before the mega USD rally takes place.

Since posting my bearish view on this pair the market has taken a more bullish turn but my weekly chart Triangle has not yet been broken. I see this move as a relief rally and agree with @elle that the pair have been stepping down steadily long term. With USD seemingly turning bearish (although not 100% all in yet - gotta wait for the Fed on Wednesday perhaps) but in a bullish retrace right now; and with stocks having gone on a bullish run coincident with the bullishness on USDJPY; AND with a possible bearish phase to come on stock indices, this pair might just roll over again into another step down that breaks out of the long term Triangle. I wont reprise my long term road map, see previous posts, but shorter term I see a pennant as having formed and now price is rising to retest this pennant and will do so around the Fib 50% it looks like. When this happens, and if it is coincident with a USD turn back bearish and possible stock indices also going bearish, then I foresee USDJPY running hard south. I think this pair will run further and harder against the USD than other due to the flight to safety element of the Yen, but this will take some time. First up I want to see that failed retest at the Fib 50% or thereabouts, chance to get Short and then a breakout of the long term Triangle lower line.

I noted with interest the IG analyst assessment before and during the ECB announcement. He suggested that the upward trend on EURGBP was still intact and went for a buy the dips view, predicated on Brexit bad (gross summary of what he said of course). He also suggested sell EURUSD, I am Long. From my chart analysis on EURGBP I see the trend as having reversed; I see no sign of a continuation trend here. In fact price has broken the recent rally channel after a Fib 88% turn at wave 2 (pink) and is now approaching the bottom of the parallel channel. Given the strong rally on GBP it would not be a massive surprise to see this market break this next channel and head on into a long term bearish trend. However before that happens, and in line with my FX analysis on other markets, including DX, I might expect a retrace rally here to prime the pumps for a big move south. A strong break of the lower second channel line would negate that view and be a Short event for me but then I would expect to be seeing a continuation of the EURUSD retrace down and a strong breakout rally on GBPUSD. The run up to the Fed announcement could be just as important as the event itself...

GBPUSD rally has been strong since the turn off the lower channel line and associated horizontal support zone. A break of the upper channel line, a quick failed retest and the market bounced away in a decent rally. One could be forgiven for jumping on board as FOMO kicks in. However markets don't go in straight lines and while Longs inside the first channel may be fine any thing above and down to the breakout zone may be at risk from a sharp bearish retrace. I am looking at a parallel channel and resistance zone close above plus building NMD that could send this market back down to join all the other USD pairs in retrace prior to a strong rally. Buy the dips is my bias here but I expect a decent retrace to set up the strong wave 3 rally.

We got a massive drop on the ECB announcements and then an even stronger rally in the space of a few hours. Maybe market players realised that despite the headline EURO bearishness of the ECB announcement it may spur the Fed to get stuck into the currency wars. Whatever the reasons the fact that we did not see a lower low is important in my view so the whole move confirms the turn bullish, when taken in the contest of other USD pairs. EURUSD still needs t breakout of the weekly channel upper line for me. Short term I see this pair retracing back down a bit ahead of the Fed announcement on Wednesday evening and likely we will see some whipsaw (I am looking for an A-B-C bearish retrace) and after this concludes I expect the rally to resume with a strong wave 3.

Since my last post on USD FX we surely got the 1-2 retrace I was looking for and then a sharp drop but what next? On EURUSD the retrace made a double bottom, crucially just short of a lower low, and then rallied strongly but is now in retrace back down. GBPUSD remains bullish, as does AUDUSD but USDCAD has recently gone bullish (in USD favour) and USDJPY has been steadily bullish throughout all the EUR moves so the full weight of all the main Fx pairs is not yet against the USD. I have been tracking several USD pairs and I feel that another small retrace is on the cards before the USD bearish move really gets going to test and break the weekly chart lower channel line. Such a small retrace and then lower low on DX would confirm the bearish turn for me. The retrace would provide a much better entry for a trade than the current levels, patience is needed. In other words buy the dips on EURUSD; GBPUSD and AUDUSD. I believe this bearish move on USD will run for a months or two, possible until stocks decide to give it up... However short term I see USD rallying into next week and there may be some whip saw price action in the move so I will be watching for the retrace end and turn to take trades rather than trading now. I think precious metals may offer a better opportunity for early next week and possibly we may see a period of stocks bearishness while USD decides on its next big play and with the Fed announcements coming on Wednesday evening I will wait to see how that plays out, I expect rate cuts that will send the USD down eventually, if not exactly when the announcements are made.

Always a little tricky thinking about placing a trade before the US markets open but if they make a sudden move then it is hard to get in. I tend to trust my set ups and keep my stops sensibly close. Right now an interesting potential turning point back down is presenting with a small scale possible ending triangle on the S&P500 and a corresponding mini head and shoulders on the Nasdaq. Only the Dow is not quite there yet so opening could see a rally there to join the others in a bearish set up. Dax is also coming up in significant resistance and a break out to the downside on the very consistent bullish channel would be an indicator that things has swung, at least temporarily. Friday the 13th, hmm, are there sufficient superstitious people about in the markets today?

After a fair bit of hesitation/consolidation whip saw on EURGBP the recent ECB rate decisions seem to have injected more downward pressure on this pair as the Euro sold off vs USD and GBP held its ground. I am sure Fed meetings to come will play a big role in this Triad but for now, looking solely at EURGBP at least, the bearish move looks set to continue. Important support zone is coming up between 8890 and 8860. A break of this support will have me looking at 8500. But I would really be wanting to see a strong break of support here as a wave 3 should be strong and fast. If we see hesitation around the current support level a relief rally could ensue, which would take the market back above 9000.