EUR/USD Weekly Analysis (Wk Strt 15th April 2012)

EUR/USD 4hr Chart Analysis

EUR/USD Last Week

Last week I mentioned that EUR/USD might range between the 1.3020-1.3045 support area and the 1.3100-1.3125 resistance area. Well it turns out that EUR/USD did exactly that for the majority of the week. This tight range was perfect for reversal trades and I managed to snag two trades on the 1hr chart, one worth 50 pips and the other 40 pips. One of these trades was recorded as a live trade video, check it out if you haven’t already.

On the chart below you can see the two successful long reversal trades and what looks like a failed short trade. Last week the red highlighted resistance area was at 1.3100-1.3120, mid way through the week it was moved to its current level at 1.3115-1.3135. This means that the failed short trade below was not actually a trade. At the time the indecision and reversal formed too far inside the resistance area so it was not entered. If you refer to last weeks analysis you will see the former placement of this resistance area.

14-04-12  EUR/USD Analysis Last Week

On Thursday EUR/USD finally broke out of it’s range and pushed up to the next resistance area at 1.3185-1.3205. Technically I had my profit for the week as I only target 100 pips and 90 pips was close enough but the bounce from this resistance area was too good to pass up.

EUR/USD pushed up to my resistance area, resistance = sellers so I knew there were sellers here looking to drive price down. My first indication that the sellers were winning was the large upper wick on the first Bull candle to break through the area. The large wick indicates that the Bulls tried to push through but the Bears took control and pushed them back.

The next indication was the small indecision candle, this candle did not indicate that the Bulls or Bears had control, it simply indicated indecision and a tight struggle.

The third and final indication of the reversal was the bearish candle breaking the low of the previous candle. By this point it was clear that the Bulls were done and the Bears were going to take control. The entry was at 1.3170 with a stop loss of 30 pips and a initial target of 50 pips.

Within eight hours the Bears went on a joy ride and EUR/USD spiraled down. This trade ended up making me 80 pips.

14-04-12 EUR/USD Analysis 4hr Trade

Going Long on EUR/USD

Just like last week there is heavy resistance on EUR/USD. The first resistance is at 1.3115-1.3135 which has migrated up slightly from 1.3100-1.3125 last week. The next resistance is a minor level at 1.3155 which is followed by another resistance area at 1.3185-1.3205.

The current resistance means that taking long trades early in the week could be risky. Price may push up but Sellers may come in to the market at any time and turn the bullish move around. In my opinion if you are going long early in the week you should aim for small and quick targets.

14-04-12 EUR/USD Analysis Resistance

Going Short on EUR/USD

EUR/USD faces heavy support this week the first area is between 1.3040-1.3060, this has migrated up slightly from 1.3020-1.3050 last week. This resistance area held extremely well last week and has held well in the past. The next support is at the 1.3000 psychological level which doubles as the one month low.

I would not enter short on EUR/USD until the price breaks the 1.3000 psychological level.

After the 1.3000 the next support area is at 1.2970-1.2945 which starts only 30 pips from the 1.3000.

14-04-12 EUR/USD Analysis Support

Ranging on EUR/USD

As last week ranging between the 1.3115-1.3135 resistance and the 1.3040-1.3060 support is possible. If this happens we may see some great reversal trade opportunities so keep an eye out.

14-04-12 EUR/USD Analysis Range

Summary

This week could be very similar to last week and we could see a lot of ranging. However, the Bears did make a significant move towards the end of last week so they could continue that move this week. If the Bears push down at the start of the week you probably should not short until the break of the 1.3000 level. If the Bulls push up they face a lot of resistance starting at the 1.3115-1.3135. The resistance might make it tough for the Bulls to gain much ground.

Given the challenge the Bulls and Bears face a range might be possible, if the price ranges watch out for reversal trades.

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24 thoughts on “EUR/USD Weekly Analysis (Wk Strt 15th April 2012)
  1. Hi Nick,
    I couldn’t
    agree more with your forecast for upcoming week. I think we are likely to see a
    tiny pullback in the beginning of the week (to the upside that is) followed by
    continuation to the downside and a break of mentioned support level. Keep it
    coming. 

  2. Great analysis Nick. Thanks for the post. Re-read it a cpl times, and adjusted me S&R. Looks good. Quick question: Did you enter the short trade on a retest of the 1.3170 or did you just see it breaking and enter?

    Lastly Congrats on a very profitable week last week, GL this week.

  3. Hey Nick, Awesome analysis as always. I will go long after the price breaks the 100% fibo level I have marked at 1.3004.. I will wait for a break and will buy when the price returns to the level again. I am using a wave method that I was taught that uses the Gann teachings. People bought at this price in the past and HOPEfully will buy again! Will target fibo 82 % at 1.3072

      1. Gann said that the present was nothing more than a repetition of the past. So I was taught a method of measuring waves(not Elliot) and apply in my system. Every week I review my fibo levels with a method I have also. And using trendlines in the 4 chart I determine momentum levels based on fibonacci levels also. Price needed to go back to 1.3072, because there was a gap there from sunday opening. Most of the time it has to be filled for the price to move where it wants to move. 1.30 is a phycological level and a 100% level on my fibo levels as you can see in the picture. It’s pretty neat stuff.. I hope answer your question!

      2. Jason, Support and Resistance is the template upon which Fibs are drawn.  Fibs are pretty awesome when used correctly, I do not use them myself but they can work well.

  4. Here Nick this one’s for you ;) + 30 on Euro using your reversal methodology. It was actually quite similar to your trade video last week.

    Stop was 30 pips so it was around the + 1.3000 area

    1. @Jason: Risky trade but it did pay off. I stayed out initially as I try my best not to take high risk trades. This trade was similar to mine last week with one exception. I traded into minor resistance, you traded into strong resistance. I am not saying it was a bad move, it is just a little too risky for my tastes

      That being said, great work man. You clearly understand price action and were able to spot a nice reversal.

  5. An update to my previous post as e0615.. Price managed to hit support at 1.30 and reversed as expected to 1.3072 and is retreating from it as expected also. Nice trade!

  6. Nick thank you for the replies.  I came across your website a cpl of yrs back. I purchased your FIRST 8 hr video course, and have all the videos from your first Free Forex Blitz :) I came back to freshen up on price action, and I’m super grateful you still keep blogging.

    I know your busy, so I’ll keep it quick.  I saw another potential reversal on the Euro this morning, and entered short with a 30 pip stop and tgt.  This one is similar to the GBPJPY trade you took here ‘https://www.forex4noobs.com/forex-blog/live-trade-videos/gbpjpy-live-reveral-trade-video-45-pips/’

    And like you mentioned in the video, ‘picking the significant level is the hardest part for these trades’.   so where would you place your entry or significant level? would you place it:
    1- At the open of the indecision candle like I did
    2- At the lower wick of the indecision candle
    3- Not have entered?

    Thx a bunch, also if anyone else cares to comment Ièd love to hear your thoughts.

    Jason

    1. I saw this trade and much like yesterdays I did not take it. You shorted into heavy support which means it was a very risky trade and it is not my style.

      There was also another issue with this trade…Reversal trades come in three parts1. Preceding Trend
      2. Indecision3. Reversal

      This trade had four strange parts…

      1. Preceding Trend2. Reversal3. Range
      4. Indecision

      This weird movement occurred for one reason….. the heavy support immediately below this area. Not only did it form above the 1.3115-1.3135 support area it was also just above the 1.3100 psychological level. If you look back to your first Euro trade of the week the reversal came in three parts. It was a picture perfect reversal. It was a risky trade but it was a picture perfect set up.This is the key point I try to get across to my students…. reversal trades come in three parts! If it doesn’t form in that way…. it is not a reversal!

      1. Thanks for the critique, and the feed back.  I never looked at it as shorting into support, but it makes sense. I’ll keep an eye out on that for the future and can now see the diff between this one and the gbpjpy trade you took which I referenced above….there was hardly any support there. Have you not taken any trades on the Euro this week?

        I’m not trading tmrw, but if I see anything else and I trade it, I’ll be sure to post.

        ty,

        Jay

  7. + 30 on USDCAD :) I took this one today…but I got lucky.

    Waited until I saw an indecision candle and then a bullish candle after it.  Waited for a retest and went long just below the top wick extreme of the spinning top/indecision candle.

    I knew I could have been going long into resistance but it seemed like minor resistance, esp if you look back a bit on the chart.
    My std trade is +30 tgt and -30 stop and it worked out nicely in this scenario, as the tgt was right before the second stage of resistance, and the stop was below the support level and the lowest point of that strong bearish candle/ lowest low.

    Though I did get lucky bc my tgt was hit to the PIP/Tick (I trade futures). Had I entered even a Pip higher my tgt would have gotten missed, bc its currently at 9904, 19 pips lower! lol 
     
    Thanks again Nick. 

    1. Great work Jason! Good to see somebody kicking ass with reversals. I am making a lot of pips from USD/CAD daily at the moment. It is a great pair to trade.

        1. Awesome, glad that I could be of help to you and thanks for participating in the blog. It is great to get feedback and to seem some traders making some pips.

  8. Hey Nick,

    I hope you have a good weekend.  Can you comment on this Cad reversal pls? I didn’t take it, bc it didn’t look as solid as the other ones I took this week…the set up just wasn’t as clean imo.  But I guess I wanted to know if :
    1 – The uptrend is significant enough to be considered a tradeable uptrend
    2 – The reversal candle was legit (the first read candle after the indecision candles, with the large lower wick)
    3 – where you would have placed your sig level? If I were taking this trade I would put it at the dashed blue line.

    Lastly, if its not a big deal, could you place a cad chart in next weeks blog, so I can compare my levels to yours?

    Have a great wknd, and tty next week.

    Jay

    1. Ok I took a look at the trade.

      1. Uptrend was definitely significant enough.
      2. The two reversal candles were both legit but I did not like the one with the lower wick. When I see a wick like that I am forced to set my entry at the break of the lower wick. This means that I might have an entry that is much lower than I wanted.3. As above the sig level would be at the low of the indecision candle wick. My reasoning is that until the Bears prove they can make a new low I am not cinvinced that they have enough power to start a reversal trend. Obviously something caused the Bears to reverse, that is why we have the large lower wick. I do not want that same something to cause another reversal. A break of that wick is essential for a short entry in my opinion.Now looking at the set up as a whole I do not like it.Remember how I said there are three parts to a reversal? 1. Preceding trend.2. Indecision.3. Reversal trend.In the set up you showed there are four parts.1. Preceding trend.2. Small reversal.
      3. Indecision.4. Reversal trend.This may seem a little stringent but I tend to only take the best set ups. I may break my rules on occasion but overall I am pretty strict with those rules.

      Pushing my stringent requirements aside and looking at the set up purely from a price action standpoint it was a reversal set up. Not everybody is as stringent as me and if you aren’t then I agree this was a good reversal set up.Hope this answers your questions.