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Chart Commentary Disclaimer: Nial’s views on the Charts is not advice or a recommendation to trade or invest, it is educational and general information only. Don’t blindly buy and sell the markets/products discussed in this newsletter, do your own research and be aware of the risks and rewards.
Weekly Forex Trade Ideas & Chart Analysis by Nial Fuller – October 22nd to 26th, 2018
TECHNICAL PRICE ACTION ANALYSIS:
All charts illustrated are daily timeframes unless marked otherwise.
EURUSD – Bearish Fakey Signal Activities Last Week – We Remain Bearish Under 1.1615.
Summary: Price has now broken below both 1.1615 and 1.1535 support zones, activating a short term bearish leg lower. This week it all depends on the 1.1615 to 1.1535 key resistance area.
Price collapses below the key support we have been watching at 1.1535. This downside move has activated a bearish fakey pattern (prior inside bar break out upward has failed, forming a bearish pin bar, then followed be a subsequent sell off back below the mother bar low)
Trade Idea: Consider selling short on any short term strength whilst price is below 1.1615 (high of pin bar).
USDJPY – Bullish Fakey Activates – Bullish Above 112.05 Support.
Summary: Price has formed a solid base at 110.75 and has now pushed up and closed above the 112.05 technical key level.
We remain bullish above the 110.75 – 112.05 long term support area and continue to favour buying on the dips around this area. We previously suggested the inside bar break lower could become a bullish fakey setup in prior comments and that scenario has now unfolded, with price reconnecting back up above the mother bar strongly. The bias looks bullish whilst support holds, and we will continue to look to buy on weakness.
Trade Idea: If not already long, consider waiting for a price action buy signal whilst price is above the 112.05 support level, targeting a move back to 113.18 and beyond.
GBPJPY – Box Pattern Breaks To Downside, Now Waiting For Additional Sell Signal To Confirm An Entry.
Summary: Trend remains mildly bullish. Price is consolidating right at 149.15 resistance area within a box pattern that has developed over the past few weeks.
The box range shows resistance at 149.15 and support at 146.95. Now that prices have broken down from the box pattern, we need to watch for price action signals on 4 hour and daily chart to confirm an entry in this direction. If we don’t see a clear sell signal, we won’t be trading shorts yet. The downside move targets 143.80 if momentum picks up steam.
Trade Idea: Consider waiting for a price action signal to confirm an entry, most likely on the sell side. Targeting a move to 143.80 or lower.
GOLD (Spot Gold) – Multiple Inside Bars Form Right Above $1205 – $1215 Key Support.
Summary: Prices have reconnected back above the short term resistance at the $1205 – $1215 zone and are staging a short term recovery. Traders can consider watching the $1205 to $1215 support area for buying opportunities on any dips lower (old resistance now support). The first upside target would be the overhead resistance at $1237.
The daily chart still shows multiple inside bars. Traders can be on the lookout for a false break below the inside bar structure, down into $1205-15 support, followed by a strong surge higher to complete a bullish fakey pattern. Watch for buy signals in the support region.
Trade Idea: Consider waiting for a bullish fakey signal or pin bar signal in the $1205-$1215 support area, targeting a move initially back up to $1237 overhead level.
S&P 500 Index USA – Further Volatility Expected, Play The Key Levels On Both Sides This Week.
Summary: Still maintaining a neutral bias after last fortnights huge bearish correction. Support levels at 2690 and resistance levels at 2790 and 2860-70 area.
From here it’s likely the market will remain volatile so we can play both sides of the market. We won’t be committing to a trade until we see a price action signal, either from support at 2690 support or at 2860 resistance.
Trade Idea: Consider playing both sides of the market.
1 – Consider waiting for a buy signal around 2690.
2 – Consider waiting for a sell signal around 2860.
We suggest traders avoid holding long positions (buys) over the weekend.
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