Greetings and welcome to another week of trading. Time is going by quick and hopefully everyone is keeping up with their trading and being consistentl profitable.
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As usual, here is our Forex analysis for next week. Good luck with trading.
EUR/USD
W1 – 1.2900
M1 – 1.3300
Q1 – 1.4000
The EUR/USD is still lingering within the triangle lines but it looks like we may see some potential movement to the upside. We’re rigth on a couple of strong trend lines so if we can remain above it, then look for another push up to potentially test the 1.3500 area and above.
GBP/USD
W1 – 1.5900
M1 – 1.6200
Q1 – 1.5700
We’re still flirting with the major trendline and we’re actually still below it. However, look for a potential push to the upside. If we do see a break above and break away from the trend line, look for the pair to potentially test teh 1.5900 area and above. Look for it to test the upper trend line drawn in the chart below.
Once the upward movement completes, then look for a dramatic movement back down. Use Fibonacci and intraday anlaysis to help determine potential turning points. Remember to always use your stops and don’t keep adding on to a losing position. That is a very quick way to depleting your account.
USD/JPY
W1 – 85.00
M1 – 88.00
Q1 – 93.00
For a while we were in a long sideways channel but we saw a dramatic breakout to the upside and haven’t looked back. Look for more potential upward movement in the longer term. However, in the shorter term, we may see some downward movement as a retracement to the large, steep upward movement. This looks to be a motive wave so apply your Fibonacci levels and use your Wave 4 projections. Remember, if we are in Wave 4 then the movement up in Wave 5 can be a truncated 5th so be sure to use trailing stops and protect your profit.
USD/CHF
W1 – .9100
M1 – .9300
Q1 – .9900
The USD/CHF is unfolding very nicely and it looks like we may be in the early stages of a Wave 5 of a motive movement. What does that mean? Look for a continuation of the movement up to potentially test the .9500 area and above. It looks like it may be strong enough to bring it back to parity levels.
In an article we wrote for Forex Journal, we commented on the potential dangers of Wave 5 trading. For a long time, traders used to love trading Wave 5 of motive waves because they can see the other 4 waves before it unfolding so they had a pretty clear grasp of the wave count. The problem with Wave 5s is that they can be truncated – meaning, they do not go above the high of Wave 3. This means that you’re looking for “x” amount of pips because you know many pips were in Wave 1 and Wave 3. If you are trading this, keep that in mind and be sure to lock in profits.
