FX: plenty of warning signals.

There are plenty of warning signals across currency pairs at the moment suggesting caution is needed with trying to pick a trend. Thursday’s  European Bank Holiday and Monday’s looming US Memorial Day and GBP Bank holidays may also be contributing to this but there is also the specter of Summer ranging markets ahead of us.

The first warning signal, as I see it, is that the US$ index is now forming an indecision weekly Doji candle under the break of major support;  it could go either way from here which is playing a bit of havoc with USD-based pairs. Second, is the number of consolidation patterns seen across the 4hr charts of many FX pairs and, third, is that momentum is declining on most 4hr FX charts. I would not be pushing for trades at this time but exercising patience and waiting for the breakouts to evolve, as they eventually will.

USDX weekly: The bottom of the Cloud is providing support here but watch for any make or break. I’d previously mentioned a test of the broken support could evolve so watch for that possibility too. Watch today with USD Core Durable Goods and Prelim GDP as well as G7 meetings.

USDXweekly

Trend line breakout trades: only one 4hr chart breakout triggered yesterday:

USD/CNH: this breakout triggered during the Asian session and gave a decent move for 280 pips. Note the TC signal on the 15 min chart too::

USD/CNH 4hr:

USDCNH4hr

USD/CNH 15 min:

USDCNH15min

Special Comment section:

Oil: has pulled back with OPEC so watch for any 4hr 61.8% fib support. Note the ok signal that triggered on the 15 min chart:

Oil 4hr:

Oil4hr

Oil 15 min: a STOP of 80 pips is high but the risk/reward worked out ok for this particular move

Oil15min

GBP/USD: this is ranging within a wedge on the 4hr chart but note the 15 min chart:

GBP/USD 4hr: ranging under 1.30:

GU4

GBP/USD 15 min: taking TC signals off the 15 min chart WITHIN the wedge can offer some scalping opportunity but this chart shows that the signals that trigger close to a trend line are less profitable. I want all the TC Trial participants to note this. The better trades come with a new signal that forms with a trend line breakout so it’s best to see BOTH evolve before trading, IMHO that is!

GU15

Other Forex: note all the consolidation patterns and declining or absent momentum! With the holidays this week and next Monday these patterns may be with us for a bit longer. Patience! One benefit of declining momentum though is that it’s much easier to see an increase when the ADX breaks back up above the 20 level; there’s always a bright side! Keep an eye out today for USD Core Durable Goods and Prelim GDP as well as the G7 meetings.

EUR/USD 4hr: note the lack of momentum here!

EU4

EUR/JPY 4hr: watch for any ‘Double Top’ hesitation here:

EJ4

AUD/USD 4hr

AU4

AUD/JPY 4hr: trend lines adjusted because of the lack of momentum:

AJ4

NZD/USD 4hr: declining momentum here too:

Kiwi4

USD/JPY 4hr: watch trend lines and the 112 level:

UJ4

GBP/JPY 4hr: note the lack of momentum here!

GJ4hr

GBP/AUD 4hr: declining momentum here too:

GA4

GBP/NZD 4hr: and here too:

GN4hr

EUR/AUD 4hr: note the lack of momentum here!

EA4

EUR/NZD 4hr: watch the trend lines, momentum and 1.60 level:

EN4hr

USD/TYR 4hr: trend lines adjusted due to lack of momentum:

USDTRY4hr

USD/MXN4hr: watch for any test of the broken trend line:

USDMXN4hr

USD/ZAR 4hr: ditto:

USDZAR4hr

Gold 4hr: note the lack of momentum here!

Gold4hr

Silver 4hr: declining momentum here too:

Silver4hr