Forex Analysis Report - 30 January 2008 (night)

Hello my friends

The big wave that I warned you about it last night came today afternoon and we could make some good trades. As I told you these big movements come after a support or resistance breakout and if you like to take the advantage of them you have to look at the candlesticks and find the supports and resistances.

Something that I want to warn about it again is that when you see a big breakout, do not try to trade against it otherwise you lose a lot. When it is going down, it shows some reversal signals and sometimes they are relatively strong but if you go long, you will be trapped.

Fundamentals: 9:45 AM - Chicago PMI

1. Euro against US Dollar (EUR-USD)

12:07am GMT

So it broke up finally. As you see on the daily chart, today it broke the 28th candlestick high price (the upper thick red line) and as I told you last night, if this happens it is a signal that Bulls have taken the control and the price will go much higher. Hope you could take a long position and make some money. But don’t get upset if you couldn’t because good opportunities always come.

Today candlestick formed as a big Bullish candlestick but there is an important signal in it. Yes; it has a long upper shadow that reflects the Bears counter-attack. So It is possible that the price goes down and retests the broken 23.60% level.

Oh yes! The 4hrs chart is showing a very strong sell signal.

We can go short but when??? Yes; when the the price breaks the low price of the 30 Jan 20:00 candlestick (the small horizontal red line). Have an eye on it.

The one hour chart shows the same sell signal from long time ago. It is created right on the 161.80% level.

One of the users of this weblog (Talita) have asked me a question and I want to answer it here because it also helps the others.

She has been waiting for the resistance breakout to go long. It happened and then she went long but the price bounced down to retest the broken resistance. Let me show you in the chart:

When it goes down to retest the broken resistance, she lost most of the profit she had made. Her question is that when did she have to close the long position to keep the profit.

The answer is clear. Those two Hanging Man candlesticks that their body is formed out of the Bollinger Bands are a BIG warning that says: FIX YOUR PROFIT!

When it breaks a support and resistance, it doesn’t mean that it will keep on going down or up forever. You have to be careful not to lose your profit.

Then you could go long again when the price retested the broken resistance and Bollinger middle band and started going up again.

2. US Dollar against Swiss Franc (USD-CHF)

1:12am GMT

It broke down the support but it is retesting the broken support now. The 30th candlestick is a strong Bearish candlestick and I expect the price keep on going down.

The 4hrs shows that the 1.0833 support is not broken. It was retested but could not be broken.

The one hour shows a buy signal but if you like to go long now, you have to wait until it breaks the 30 Jan 23:00 high price (the upper horizontal red line) or if it went down and broke the 30 Jan 22:00 low price you can go short.

3. British Pound against US Dollar (GBP-USD)

1:53am GMT

Today candlestick is formed as a Bearish candlestick.

The 4hrs shows that the price has had difficulty in going up. It went down and retested the 161.80% level but has not been successful so far. We have to wait by now.

The one hour chart shows that the price has been moving around the 161.80% level for a long time and this level has been broken and retested several times. The last time was two hours ago that this level was retested unsuccessfully as a support. Now it is showing a buy signal which is not strong enough. I prefer not to enter to any trade by now.

4. US Dollar against Japanese Yen (USD-JPY)

2:00am GMT

Bears are still strong and the Bollinger middle band could not be broken.

As predicted last night, the Bollinger middle band and the support we have on the 4hrs chart became broken and the price went down. Now we have the Bulls counter-attack.

The one hour shows that the Bears are trying again and the price is going down. If you have a long position, you have to close it if it goes lower the than the 50% level.

5. British Pound against Japanese Yen (GBP-JPY)

2:17am GMT

The daily shows that the support and the Bollinger middle band is broken down and the Bears have taken the control. If you don’t have any short position, wait until it breaks the 30th Jan lower price and then go short (the small red line).

The 4hrs has been Bearish but we have the Bulls counter-attack right now. If it breaks down the 38.20% level, we can go short again.

The one hour shows that currently the price is moving between the 100% and 161.80% levels and we have Bears attack right now. If the last candlestick becomes completed as a big Bearish candlestick, we can go short again but then we have to be careful about the 161.80% that has to be broken down otherwise the price will go up again.

6. Euro against Japanese Yen (EUR-JPY)

2:35am GMT

In the daily chart, the price has been trying so hard to break up the Bollinger middle band but has been unsuccessfully so far.

The 4hrs is strongly Bearish but the Bollinger middle band is not broken yet. Have an eye on it and if the price broke down the 30th Jan 20:00 candlestick, go short.

The one hour is strongly Bearish too.

7. US Dollar against Canadian Dollar (USD-CAD)

The daily is strongly Bearish.

The 4hrs shows a buy signal which looks rather strong but the last two candlesticks show indecision under the Bollinger middle band.

The same buy signal in one our chart.

8. Australian Dollar against US Dollar (AUS-USD)

4:52am GMT

The buy signal that I shows you few days ago worked and the price went up nicely.

A Strong signal in 4hrs chart.

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