Trades to Watch: 24 Mar
Just took a look over the markets and currencies are really lining up nicely for some potentially big positions tomorrow. Here's what I'm looking at.
GBP/USD - Short
On the daily chart we can see price formed a bearish engulfing candle pushing down through an historic key level, telling us that right now sellers have control and they're not interested in slowing down for this possible support zone. The pound has been on a strong surge of late with the early success of the UK's vaccine programme, perhaps it's time for the GBP to have it's turn going down the slide lol. On the weekly chart, we can see a bearish pin bar formed at the top a few weeks back, and this suggests very strongly that the trend to the upside is now slowing.
Target 1: 13,545
Stop Loss: 13,886
Target 2: 13,150
USD/CAD - Long
On the daily chart we can see that this month, after a downtrend lasting almost a year, we've seen 2x bullish engulfing candles forming within a few days of one another, and on both occasions the price broke up through key levels where if the market were still interested in going short then there would have been some indecision at the very least.
On the weekly chart we can see a bullish hammer forming at the key level (that price failed to break). This could be the start of a change in the trend, much like with GBP/USD.
Target 1: 12,790
Stop Loss: 12,505
Target 2: 13,000
EUR/JPY - Short
The daily charts show that the market tried to push higher at the end of Feb, but quickly retracted. It then crept higher again to retest that resistance level, but slowed from the start of last week around this zone. Today a massive bearish engulfing candle formed on the daily charts, erasing the last 2-days' gains in one fell swoop.
This looks like a great price to get short on the EUR/JPY. Zooming-out, we see a summary of the above in clear visual format. A bearish pin bar is forming at the top of this recent trend.
Here's my plan:
Target 1: 12,750
Stop Loss: 13,005
Target 2: 12,450
Trades I Like, But Am Not Taking Now...
USD/CHF - Long
OK, so this one has a nice price action setup on both the daily and weekly charts. Engulfer on daily, pin bar on weekly. BUT, I just feel like with the amount of premium setups forming tonight, I don't want to get too over-exposed to currencies in case I'm wrong. It's more important to protect your capital than it is to chase profits! One of the ways to ensure this is to give yourself rules to prohibit over-trading and excess exposure to certain asset classes, overly correlated pairs or too much margin being used.
This trade for me didn't make the cut because it's already retraced to the 50% Fib-level which could equally be a good turning point to the downside. Additionally, you can see back in Feb 2018 that this was a strong key level, and so could also provide stronger than average resistance to the upside (See weekly chart). So of the 5 good setups presenting themselves tonight, I'd sack this one off for that reason. But worth watching for sure.
EUR/USD - Short
Honestly, not too much wrong with this trade. But I'm already in two USD trades where I'm long USD, so adding a 3rd position is just too much exposure in case I'm wrong. I prefer the other trades, so this didn't make the cut. But it's a nice setup for those interested.
My Other Positions
- Gold - Long (See my recent post)
- Natural Gas - Long
- Corn - Short
- S&P 500 - Short
- EU Stocks 50- Short
Always do your own research, trade with appropriate risk and enjoy your trading!