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Trade Trends with Bollonger Bands and Twiggs Money Flow

EURAUD - Take the candy and run

Chart Forum » Forex & Bonds » EURAUD - Take the candy and run

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ingot54
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Username: ingot54

Post Number: 2218
Registered: 05-2004

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Sunday, April 04, 2010 - 04:38 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



It will be a long time before you see another long trending pair like the EURUSD. This pair has been in a downtrend since financial instruments turned on a dime in Feb/March 2009 - in fact - the same time credited as being the bottom of the GFC stock-market crash.

Since that time, the DOW is up around 80% ... and this pair is DOWN around 26%.

The remarkable thing about the EURAUD is that the trend is consistently down, without the radical volatility and indecision that wracks most other currency pairs. There have been good opportunities for entry on pullback.

The double shooting stars(or bodied gravestone doji's) signaled the top of an old trend, or at the least, a strong chance of a down-trend, and what a signal it turned out to be. To say sentiment changed somewhere would be to understate reality!

EURAUD_3

So what?

The thing that is attractive is that right now there is an opportunity to get in to this great trend, so here's the deal:

The current 4H chart has shown a false breakout to the upside, followed by a descent to support, with two instances of price adventuring below support, but each time failing to continue the break.

Both the DAILY and WEEKLY charts have outside bars, or bearish engulfing candles, rejecting 1.4660 and 1.4578 respectively.

An aggressive approach right now would be too speculative, given the Easter break, and the current indecision in all time-frames. But ... the strong downward momentum looks set to continue.

A conservative approach would be to look for a pullback on the Daily chart - perhaps to the 8-period EMA (around 1.4715) and then use the 4H to fine-tune an entry. Of course, it is possible that with such strong momentum, price might just "take off" on open, and continue to fall.

In this case, a "sell-stop" placed below 1.4660 (say 1.4650) would get you into a rapidly moving market.

Keep in mind that both of the last 2 weeks' candles have rejected 1.4598 and 1.4578 respectively.

Feedback welcome.

EURAUD_4A


Keep Smiling - Don't look back

Hell, there are no rules here - we're trying to accomplish something ~ Thomas A. Edison

Never believe that a few caring people can't change the world. For, indeed, that's all who ever have ~ Margaret Mead


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gdd3
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Sunday, April 11, 2010 - 03:00 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ingot,

Great charts and I believe you are right. To support your statement a monthly chart of both the AUD/EURO and EURO/AUD highlight what you have implied about 'a once in a lifetime' trend in the EURO vers US and AUD. and I concur that there is still more in it.

Both charts here highlight false breakouts of its long-term 'inside' historical 'value area/range', in the case of the EURAUD...between 1.87 and 1.55 that couldn't be sustained for long but more significantly the 'false' breakout of the 'outer' range...2.04 and 1.43 in late 2008 that preceded this last "historically" smooth downtrend you highlight. Now, my take is that there is probably an 80% certainty(Peter Steidlmayer...Market Profile)that the EURAUD will squeeze out below the lower range support(1.43) by about the same amount as it squeezed above the top end of the range in late 2008....and, guess what that level means...yep its historical low EURO beginnings ~1.36.(the inverse level is not shown on the AUDEUR chart as the crude I.C. data doesn't go back that far!).





Cheers
Dolphin


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ingot54
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Username: ingot54

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Sunday, April 11, 2010 - 08:57 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




gdd3 wrote on Sunday, April 11, 2010 - 03:00 pm:

Both charts here highlight false breakouts of its long-term 'inside' historical 'value area/range', in the case of the EURAUD...between 1.87 and 1.55 that couldn't be sustained for long but more significantly the 'false' breakout of the 'outer' range...2.04 and 1.43 in late 2008 that preceded this last "historically" smooth downtrend you highlight.

Now, my take is that there is probably an 80% certainty (Peter Steidlmayer...Market Profile) that the EURAUD will squeeze out below the lower range support(1.43) by about the same amount as it squeezed above the top end of the range in late 2008....and, guess what that level means...yep its historical low EURO beginnings ~1.36.(the inverse level is not shown on the AUDEUR chart as the crude I.C. data doesn't go back that far!).




Thanks for that perspective, Dolphin. What I find about old S&R levels, is that the market likes to "revisit the scene of the crime" and have an attempt at finishing the victim off!

In other words - a re-test of long-standing S&R levels is always on the cards when markets do this of course.

What I like about the current strength of this move, is that it is reflecting the fundamentals - ie the faults in the Eurozone community. The difficulty in dealing with countries like Greece (and I am talking about Portugal, Ireland, Italy and Spain here as well) is a reflection of poor founding principles in the Eurozone Alliance.

No member country is allowed to raise interest rates or lower them, because they are tied to the Euro. But the 800 lb Gorilla in the room, is the Catch 22 situation we have now with Greece, and soon, possibly, will be seeing with other heavily indebted countries.

Firstly: If the ECB bails out Greece, then they are opening a Pandora's Box - the rest of the members states in financial difficulties will expect the same - to fail to treat all members equally might seriously destabilise the EUR.

Secondly: If Greece is forced to go to the IMF for funds (which ARE available) it exposes fundamental flaws in the EUR - again, highly destabilising for a pretender to the throne of world reserve currency, should the mighty greenback fail.

The best Greece could hope for, would be for their Bond Auctions to be fully subscribed, and to get the EUR11 billion they need before 19th May JUST to refinance Government Bonds maturing by then.

A situation (ie their blown-out debt) btw that I see crystallised through the urging of the IMF to have every one of the 185-members of the G20 groups of nations, to have fiscal stimulus packages - most of which ultimately ended up in Chinese pockets!

Anyone who purchased Greek Bonds on 29th March, has already lost 8% in the past 12 days! Greece Bond yields are blowing out - good only for gamblers! Moody's downgraded the five biggest Greek banks last week - as currency flees the country. The only staunch supporter of the EUR right now, is Germany - and their hardline in saying "No" to an ECB bailout, is probably the only thing preventing a complete collapse of the EUR.

Can it work?

I am of the view that the EUR has to fall to very enticing levels, before money begins to flow back in support. Meanwhile, until the crisis is resolved, I expect the EUR pairs to be very weak.

Anyway - markets exist to transfer capital from the vulnerable to the secure ... from the weak to the strong. I see the tug-of-war going on between the USD and the EUR as a symptom of this transferring process. The fact that I am even thinking that the Euro is melting down due to its fundamental flaws, means that someone a bit smarter than me - and there are a few has been successful in setting me up for a fall somewhere down the track.

Note to self: Never take a view of where (you think) the market is going - act only on what the chart is saying - charts can trick you, but they seldom lie!

Back to the business in hand:

The 4H chart seems to have established support around the 1.4380 to 1.4390 zone, and that nice bullish engulfing candle is leading the charge in a short rally, which has a good probability of running out of momentum right where it stopped. If it is able to break 1.4465 convincingly, then the next serious resistance is 1.4578 set on 31st March 2010, though because I deal in zones mainly, I think we could stretch resistance to 1.4600 +/-

The Daily can look a bit boring until you get involved in its intricacies!

Price sliced through support at 1.4660 on 6th April, like a hot knife through unsalted butter! In the process it also slashed the 1.4580 support zone, and went on to establish new support at 1.4344.

The move that started on 5th April, and ended on the 9th, netted 207 pips, for purist chartists, but in reality probably around the 200 would have been possible. There were signs of indecision and congestion, and good traders (I didn't get these) may have closed out around 1.4380 for a bag of 270 pips.

These trades are what attracts me to price action trading - you don't need much more than the seat of your checquered trousers and a keen eye to make a living. Trading a modest dollar amount per pip will not break your account. There are similar trades setting up in a few pairs most times, you are not chasing charts all day, and fumbling with the "sell" button every time price "breathes" a bit. Maybe three-to-six trades each week is enough.

I digress ... again!

The weekly chart is a little different, and I feel a tad cautious when considering the action on the current weekly candle. I am a great watcher of 50% retraces, and although that level for this candle would put the retrace at around 1.4515, I am more inclined to be ready to sell this retrace (if it happens) around 1.4570 - 1.4580 zone, in agreeance with S&R on the 4H chart.

As you know, while WEEKLY charts are great for spotting strong S&R levels, they seldom provide the trading-man's instructions, unless your last name is Soros!

Thanks for the contribution - I like your ideas on this pir Dolphin, and I like the inverse view of the pair. Thanks for that. I would use IC charts if only I could place my captions in useful areas. I believe it's fairly high on Colin's "to do" list.

Cheers

Ivan

(One of these days I'll really try to write a response that excludes the FA stuff, and stick to charts and TA!)
.


euraud}


Keep Smiling - Don't look back

Hell, there are no rules here - we're trying to accomplish something ~ Thomas A. Edison

Never believe that a few caring people can't change the world. For, indeed, that's all who ever have ~ Margaret Mead


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mdunleavy
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Username: mdunleavy

Post Number: 1
Registered: 05-2010

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Sunday, May 30, 2010 - 07:27 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Trade Idea: EUR/AUD - Sell at 1.4490; Target: 1.3930 ; Stop: 1.4630.
===========================================================================
EUR/AUD's sharp fall last week suggests that medium term down trend is resuming and a break of
1.4490 support will confirm this case and target lower trend line support (now at 1.4280) or
further to 1.3930 (last low). While some recovery might be seen, break of 1.5400 resistance is
needed to be the first sign of bottoming. Otherwise, outlook in EUR/AUD will remain bearish.

"P&F EURAUD1440 Box Size 250X3 or(4.28%) HI/LO
Data 2.1126 - 1.3928 ~ 48 Month ~ 1479 Day
Database 1050 records 1.44786 (Last Close)
2006-05-10 00~00
2010-05-28 00~00 (GMT+01:00) Paris
MDunleavy chart"

2.1000|~25O||________________x___x___________________x_+_________________|0.6%|50.78%
2.0750|~5OO||________________x_o_x_o_____x___________x_o_+_______________|1.78%|48.98%
2.0500|~75O||________________x_o_x_o_x___x_o_____x___x_o___+_____________|2.96%|47.19%
2.0250|~1OOO|________________x_o_x_o_x_o_x_o_____x_o_x_o_x___+___________|4.15%|45.39%
2.0000|~125O|________________x_o_x_o_x_o_x_o_____x_o_x_o_x_o_x_+_________|5.33%|43.6%
1.9750|~15OO|________________x_o_x_o_x_o_x_o_____x_o_x_o_x_o_x_o_+_______|6.51%|41.8%
1.9500|~175O|________________x_o_x_o_x_o_x_o_____x_o___o_x_o_x_o___+_____|7.7%|40.01%
1.9250|~2OOO|________________x_o___o_x_o_x_o_x___x_____o_x_o___o_____+___|8.88%|38.21%
1.9000|~225O|________________x_____o___o___o_x_o_x_____o_x_____o_______+_|10.06%|36.42%
1.8750|~25OO|________________x_____________o_x_o_x_____o_______o_________|11.25%|34.62%
1.8500|~275O|================x=============o=+=o===============o=========|12.43%|32.83%
1.8250|~3OOO|________________x_____________+___________________o_________|13.61%|31.03%
1.8000|~325O|________________x___________+_____________________o_x_______|14.8%|29.24%
1.7750|~35OO|________________x_________+_______________________o_x_o_____|15.98%|27.44%
1.7500|~375O|________________x_______+_________________________o_x_o_____|17.16%|25.65%
1.7250|~4OOO|x===x=======x===x=====+===========================o===o=====|18.35%|23.85%
1.7000|~425O|x_o_x_o_x___x_o_x___+_________________________________o_____|19.53%|22.06%
1.6750|~45OO|x_o_x_o_x_o_x_o_x_+___________________________________o_____|20.71%|20.26%
1.6500|~475O|__o_x_o_x_o_x_o_x_____________________________________o_____|21.9%|18.47%
1.6250|~5OOO|__o_x_o_x_o_x_o_______________________________________o_____|23.08%|16.67%
1.6000|~525O|__o_x_o_x_o_+_________________________________________o_____|24.26%|14.88%
1.5750|~55OO|__o_x_o_x_+___________________________________________o_____|25.45%|13.08%
1.5500|~575O|==o===o=+=============================================o=====|26.63%|11.29%
1.5250|~6OOO|______+_______________________________________________o_x___|27.81%|9.49%
1.5000|~625O|______________________________________________________o_x_o_|29%|7.7%
1.4750|~65OO|______________________________________________________o_x_o_|30.18%|5.9%
1.4500|~675O|______________________________________________________o_x_o_|31.36%|4.11%
1.4250|~7OOO|______________________________________________________o_x_+_|32.55%|2.31%
1.4000|~725O|______________________________________________________o_+___|33.73%|0.52%
1.3750|~75OO|______________________________________________________+_____|
Column|~775O|3_7_7_7_6_4_5_4_1_7_7_8_6_6_7_9_3_3_8_4_6_9_6_4_3_1_3_1_5_3_|
Count||~8OOO|________________9_________________________________1___6_____|


ing

Full size Excel Chart =>>>http://iticsoftware.com/postimages/201005/BJF-Trading-Group-EurAud0528.xls







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alex_lyall
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Username: alex_lyall

Post Number: 11
Registered: 03-2009

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Wednesday, June 02, 2010 - 03:35 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi mdunleavy,

Thanks for your post i was impressed by your description and grid. But more impressed by clicking onto your excel link. I am an avid excel user [not an expert by nay means] but an absolute beginner in Forex. Ingot54 & jaded have been very helpful with directing me where to start to learn how to become a successful trader. I wondered whether you would care to elaborate on the complete excel sheet from your link so i could glean an understanding of what it all means. And of course whether i can gain from your efforts unless you think it too advanced for a newbie? thanks for your time.
Alex

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