GBPUSD short, USDCAD and USDCHF long all positions positive

As predicted on Monday, GBPUSD broke down quite significantly and reached levels not seen since mid July. USDCAD formed a base and continues it's strong move up. Since yesterday it is up 100+ points. USDCHF long recommended on Sunday is looking great as well, currently up about 60 points as I bought twice on the way down.

USD is stronger across the board despite better than expected German IFO coming at 90.5. US new home sales surprised again and helped to push US equities up from previous negative territory. I expect further USD strength and weakness in equities. (despite the fact that equities have stubbornly stayed bid for longer time than I expected) Buy USDCAD and USDCHF on pullback, sell GBPUSD on strength.

EURGBP bullish move may stall around 8850 area

As expected (and mentioned in previous posts) EURGBP has experienced a large bullish move over the past few days caused by stagnant EURUSD and bearish GBPUSD. However, be aware of a major trendline resistance coming at around 8850. Williams %R as well as stochastics show significantly overbought levels. It is true that currencies, especially EURGBP, tend to stay overbought or oversold for many days but in this time around the price has been overbought for over a week. Pullback may therefore be due. Tomorrow we are getting German IFO numbers. If these numbers surprise to the upside it may propel EURGBP to the aforementioned 8850 level easily as IFO has always been a big EUR mover. I'd recommend keeping relatively tight stops to protect gains or placing limit orders at around the 8850 level as stalling/pullback is expected. Long term targets are much higher but for shorter/medium term trades, taking profit ahead of this major resistance point makes sense.

Good trades.

USDCAD base in place, bias shifts up. Buy on pullbacks

USDCAD is moving relentlessly upward due to oil dropping significantly. Base has been formed at 1.0720 and today's very bullish price action points to further gains. Trend line resistance has been broken, price came back to test the trendline this time working as a support and bounced back. Macd gave bullish crossover signal and macd line will soon move over the zero line as well. Unless we close below 1.08 than USDCAD formed a bullish engulfing pattern on the daily which is a very powerful buy signal. Currently we are trading around 1.0850.
Sometimes charts just look amazing! This is one of those times.

Good trades.

GBP shorts looking good

Not much change since last post. Exactly as predicted, GBPUSD reached 1.6440 and since then broke down so now the position is about +65 points. In case of EURGBP, the price is probing 8750 up about 50 points from yesterday.

US consumer confidence surprised to the upside at 54.1 (expected 48.1). However, that news did not help to push the price action from yesterday's range. Equities are up but lost much of earlier gains. In FX, majors are changed only marginally. Interesting price action formed in USDCAD which shot up from 1.0720 to 1.0815 in matter of minutes. USDCAD close around the 1.08 area would signal a base forming. From which bullish move could be expected.

Good trades

GBP looking very weak

Looking at 4h charts, GBP is looking very weak. Against the buck, Sterling is at the lower end of the recent trading range. 10, 20 and 30 EMAs are all nicely stacked with good angle and separation. Any rallies need to be sold as these EMAs will continue to provide resistance levels. Only close above 6680 would turn bias up. Test of previous low at 6270 is in play and will probably happen sooner rather than later. Sell preferably at a test of 10 ema around 6440.

EURGBP continues to move up as noted in previous posts. Again, EMAs are nicely stacked, sloping up, providing support. Buy on pullbacks to the 20 EMAs currently at around 8670.

QE by the BoE will continue to hurt the Sterling. Larger declines could be in play so trailing a stop as opposed to using a limit to close open positions makes sense.

Good trades.

No news announcements bring a slow session

No news announcements from EU or US are behind relatively slow trading session today with USD only marginally stronger against the majors. The only news we got in the morning was CAD retail sales that came out better than expected (+1%). Against the CAD, the USD broke down and reached a low of 1.0730. Second long USDCHF position recommended yesterday working out quite nicely with average price now around 1.0615. Equities were doing quite well in the morning, now those gains have disappeared as they entered a negative territory. EURUSD is currently breaking below 1.43 which is not only a psychological level but also a trendline support. Close below 1.4270 would be majorly negative for the EUR.

Good trades.

Sticking to long USDCHF in medium term

USDCHF broke down to test lows from May 2nd and August 3rd. Stop at 1.0490 still valid and for now relatively safe. I'd recommend adding to the long position at current levels targeting price around 1.08. Unless price breaks down significantly daily stochastics are about to cross giving a bulling cross over signal. Patience pays as stochastics are often oversold for many days in a row. As pointed in previous posts, oil is at very important level. If oil breaks back down to around 71-70 level, it could indicate a failure of risk taking trades suggesting prolong pullback in high yielding currencies and USD strength. We could see USD sell during Monday and then "turn around Tuesday" could bring new USD strength.

Gold chart shows a very bullish candle. However, there are numerous resistance levels. 958 first then trend line resistance at 967. Risk trades up on Monday, spectacular failure and "turn around Tuesday" is what I expect.

Good Trades.

USD sold across the board as data surprises to the upside

USD is sold across the board as German services PMI surprises with a number much better than anticipated. After many months of contraction we got 54.1 (number above 50 indicating expansion). US data surprised with existing home sales that were significantly better than expected. As a consequence risk appetite came back, equity markets jumped up and are currently up triple digits, oil and gold are up sending USD and JPY (safe haven currencies) down. However, in case of GBP the chart does not really look that good. Initial GBP buying was quickly followed by strong selling pressure indicating that GBP move was caused by USD weakness not GBP strength. In case of EURUSD and USDCHF moving averages are stacked nicely indicating further USD weakness. In case of GBP the moving averages started to indicate further USD stregth. GBP weakness can be nicely observed when looking at bullish EURGBP formation. Selling GBPUSD on strength continues to be the preferred strategy.

Good trades.

Medium term long USDCHF

USDCHF has been supported by 1.06-1.0650 area since beginning of May. 1.0650 coincide with 61.8% retracement of the huge bull run from 0.9637 to 1.2297. This level may therefore provide a very significant level of support even for long term players. Buying at current levels (1.0650) with 1.0490 stop (risking 160 points) and having a limit for half the position at 1.0850 and trailing the second half might be a good trade. If we trade around 1.0750 you may consider placing a stop at break even to protect your equity.

SNB would probably continue to intervene by selling the CHF should the CHF strengthen abruptly.

There are plenty of USD bears out there but today there is a rumor that Pualson investment company is long USD... good to know someone might believe in the greenback.

Good trades