The Weekly Update: New Month, Fresh FX Trades

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FX Trading Strategies

It has been  rather interesting month in the Foreign Exchange (Forex) market. Many currency pairs that were held in a range for a substantial period of time are beginning to show early signs we are due for some volatility in May, 2016.

The first currency pair we would like to elaborate on is Dollar Swiss as we have emailed on Friday.

USDCHF Daily Chart

Please click on the chart to enlarge:

USDCHF Daily Chart 01/05/16

USDCHF Daily Chart 01/05/16

USDCHF Trading Strategy

We are using the technical layout we have used for a prior USDCHF trading strategy that was issued in April, 2016. The price was within a near proximity to the take profit of the trade that was initiated in April before reversing lower. The key support is seen at 0.9586, which the price succeeded in closing above at the weekly close.

Similar to the trading strategies we will soon present we may incur a kick to 0.9514 before the price reverses higher. Such a move must be priced-in in the protective stop loss order unless we choose to opt for a tighter stop and will re-enter if 0.9514 is tested. We are still uncertain how to act as it depends on the opening price of USDCHF.

NZDUSD Weekly Chart

Please click on the chart to enlarge:

NZDUSD Weekly Chart 01/05/16

NZDUSD Weekly Chart 01/05/16

NZDUSD Trading Strategy

Please note it is a monthly entry but we chose to display the weekly chart. The monthly chart marks the potential for a bearish flag as we have discussed in the past. Very similar to USDCHF, as you may see from the weekly chart we presented The price may re-test 0.7050 before reversing lower.

Re-tests are not guaranteed, which is why they are often taken into account in the protective stop loss order. We calculate the potential drawdown for all our trading strategies, if it exceeds the amount we are willing absorb we refrain from entering the trade. We hope for a gap higher at the opening of the Forex market, we are aware of China economic data that was released over the weekend.

GBPNZD Daily Chart

Please click on the chart to enlarge:

GBPNZD Daily Chart 01/05/16

GBPNZD Daily Chart 01/05/16

GBPNZD Trading Strategy

As we mentioned in our prior GBPNZD trading strategy, a dip lower maybe capitalized on to re-enter the cross. We would prefer a gap lower towards the 21 Moving Average (MA, in pink) that will reduce the required stop for the potential long trade. It is a quite complex entry and it greatly depends on the opening price of GBPNZD.

We are unlikely to opt for all 3 trades, best case scenario would be 2 trades. We would like to maintain a low market exposure that can only be achieved by controlling the amount of open trades and the potential drawdown.

We will send an update via email after the opening of the Forex market.

USDCHF Trade Alert Details

Please click on the chart to enlarge:

USDCHF Daily Chart II 01/05/16

USDCHF Daily Chart II 01/05/16

USDCHF long at market price (0.9572)
Take profit: 0.9790
Protective stop: 0.9484
Risk Ratio (RR): 1 : 2.5 (approx.)
Estimated duration: 10 days

NZDUSD Trade Alert Details

Please click on the chart to enlarge:

NZDUSD Weekly Chart 02/05/16

NZDUSD Weekly Chart 02/05/16

NZDUSD short at market price (0.7021)
Take profit: 0.6595
Protective stop: 0.7177
Risk Ratio (RR): 1 : 2.6 (approx.)
Estimated duration: 21 days

NZDUSD trade alert was issued prior to the daily close on 2 May, 2016.

03/05/16 UPDATE: Moderate gains in EURUSD took their toll on USDCHF, triggering the protective stop loss order of the short trade. We were counting on a weak CHF but at the time of this writing the market did not meet our expectations.

We have informed our traders that following USDCHF bullish retracement after triggering the protective stop loss order we refrain from re-entering the market.

Please click on the chart to enlarge:

USDCHF Daily Chart 06/05/16

USDCHF Daily Chart 06/05/16

Re-entering trades that were stopped out have devastating psychological effects that every trade can be re-entered. Only on rare occasions we re-enter trades that were stopped out by the market.

03/05/16 UPDATE: NZDUSD is trading at 0.6936 at the time of this writing, mainly due to GDT. We are closing 20% of the short trade at market price to lower the holding costs of the short trade

Please click on the chart to enlarge:

NZDUSD Weekly Chart 03/05/16

NZDUSD Weekly Chart 03/05/16

.It is a weekly entry, which is why we are not shifting the stop to the entry until a sufficient distance is maintained. If the Employment figures exceed the market expectations and NZDUSD corrects higher it does not negate our projection for the pair.

04/05/16 UPDATE: NZDUSD is trading at 0.6884 at the time of this writing.

Please click on the chart to enlarge:

NZDUSD Weekly Chart 04/05/16

NZDUSD Weekly Chart 04/05/16

We are closing 20% of the short trade at market price and shift the protective stop to the entry.

04/05/16 UPDATE: We are allowing NZDUSD to float after shifting the stop to the entry. The holding costs were substantially reduced due to the partials’ realization.

05/05/16 UPDATE: It is a tough decision but we decided to close NZDUSD short trade at market price (0.6880), ending the trade with a decent profit.

Please click on the chart to enlarge:

NZDUSD Weekly Chart 05/05/16

NZDUSD Weekly Chart 05/05/16

We must adjust to the current market conditions.

The Weekly Update: New Month, Fresh FX Trades

As USDCHF and NZDUSD  are closed this page can now be accessed by all traders. Open trades and relevant intraday strategies are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
The Weekly Update: New Month, Fresh FX Trades

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The Weekly Update: New Month, Fresh FX Trades

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The Weekly Update: New Month, Fresh FX Trades