SE1 Capital Markets

Evolving to Consistency

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NZD/USD, July 15

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NZD/USD, July 15, M30, 8am UK Time

Good morning everybody. Similar to my logic yesterday, I have picked a pair with a very strong currency -NZD- and a very weak currency -USD-. The pair has been in an up trend for 7 days in a row and is pretty likely to go down today, like AUD/JPY yesterday and for the rest of the week (please check out the AUD/JPY post for more info).

I drew a Fib based on the last push up (M30). 0.7242 was confirmed as the ceiling three times in a row and the pair has started to go down first to the 23 %Fib level and then close to the Daily S1 level at 0.7180. This has dropped already about 50 pips during Asia and another 50 pips during the early Europe session, hence, I expect some re-tracement before another move down. The critical decision zones are marked blue and I am looking for breakouts to the trendlines. Every pip NZD/USD goes up is great because it will enable me to go in short at a more attractive level. Note to myself: We are looking for highly profitable shorts, don’t get in with a long at statistical highs.

NZD/USD, July 15, 8am

NZD/USD, July 15

NZD/USD, July 15, 8pm UK Time

After 7 days in an up-trend, NZD/USD decided to go up for another day! After forming a double top, it fell, as anticipated, to the 0.718 level, found support at the trend line and shot up, step by step, blasting through all levels, close to 0.73. Watch this level for direction, but it is statistically likely that this will turn around soon.

NZD/USD, July 15, 8pm UK Time

NZD/USD, July 15, 8pm UK Time

AUD/JPY, July 14

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AUD/JPY, July 14, M30, 8am UK Time

Ok, today a different pair. Why? AUD has been going strong for the last 6 days and JPY was weak. Without any Australian news on the horizon to continue the trend and the recent pullback we have seen in JPY, this could either exhaust its up-trend, or go into correction mode.

The first Fib you see is based on the overall up move, marking the top of the range, roughly at Daily R1 at 78.9. The second Fib is based on the up move that started yesterday from 76.80 to the current high of 78.9. Right now we pull back in a downward channel (green). I am looking for breaks and re-tests of the channel and a potential break of the 61.8 Fibo level at about 78.

AUD/JPY July 14, 8am UK Time

AUD/JPY July 14, 8am UK Time

 AUD/JPY, July 14, M30, 3 pm UK Time

AUD/JPY behaved beautifully today. My bias was to look for shorts after a six day period of strength and after an initial breakout to the upside of the channel (green), it dropped like a rock just before forming a complete double top, re-tested the downward channel as resistance and pushed down to the critical 61% Fibo line which it evenually took out to go quickly to the 50% and almost all the way to the 38% Fibo level. The last candle was the re-test of the 50% level. It is pretty likely to catch the 38% level at 77.59.

I traded successfully the breakout of the channel to the 78.70 level and two shorts afterwards. The biggest loser occured through the announcment of the US retail data.

Lesson learned: Again, believe in your analysis, and don’t trade 5 minutes before and after major news releases.

AUD/JPY, July 14, 3pm UK Time

AUD/JPY, July 14, 3pm UK Time