Welcome to today’s entry into my investing and trading blog. Read on for my analysis of the Forex market for November 6th, 2023.
I’m doing okay this morning. I struggled a bit to get out of bed, but fortunately my alarm started going off a little after 7, so even with being a bit slow, I was still up before 8. I’ve meditated and got my coffee, so I’m ready to get to work.
At first glance already, volumes aren’t very high. There aren’t any pairs with even 90K in volume right now, the closest being ~89K, so it’s going to be a light day… I guess I don’t know why, though. I was only trading things with above 100K in volume, but that was largely because there were 4 – 5 pairs with that amount of volume. That said, though, even 40K is still a good amount of volume and I shouldn’t avoid those pairs just because the volume isn’t as high.
Again, though, I don’t want to overwhelm myself, so I’m not going to look at every pair. I’ll look at the top few and stop when I feel like I’m not longer being productive and I’m trying to force things. Let’s see how today goes.
GBP/JPY – Neutral
I feel like Pound-Yen has been the top volume pair for quite some time now, but unfortunately I don’t see much opportunity right now. Price is quite strong, too strong, and I’m not sure how much more upward movement this has in the near future. Price has reached the upper band and has been riding that band for about 24 hours, and RSI is well into overbought territory.
If I’m doing a “mean reversion” play, this would be a good place to short, but I’ve amended that to where I’m also not taking counter-trend trades, which would be the case here. I’m going to leave this alone for today and revisit tomorrow.
EUR/JPY – Neutral
This looks almost identical to GBP/JPY, especially the last week or so. The main difference here being price is hovering around a key area now, and RSI isn’t quite overbought yet. It’s close enough, though, and I’m not playing breakouts anymore, so I’ll leave this alone.
GBP/AUD – Short/Neutral
This is interesting this morning. The pair Pound-Aussie has been trending down since 10/25, but has been rallying since the beginning of the month. Technically, this rally has shown higher highs and higher lows on the 4h chart, and could be considered now in an up-trend which is giving me a bit of pause; but it’s pushed up to a strong resistance area and appears to be losing steam.
Dropping down to the 15 minute chart, and price appears to be in a nice bear-rally. It’s fairly deep, but it’s pretty clean and I think I’d be comfortable trading it. Price has made a fairly strong drop, based for a candle, then dropped again; and the rally has pushed to the highs of the small base that formed. I’ll have to pick a target on the higher time-frames, I can already see that a good R:R might be tough, but I like the movement, so I’m going to look for entries.
After running the numbers, my R:R was predictably not there at all. If I simply double my risk to find a target, I get a level that should be hit relatively easily if price returns to the downward trend; but it would have to break multiple key levels to do so. I’ll mark this to revisit later, but I’m not sure it makes sense to trade this.
AUD/JPY – Neutral
Another Yen pair. These are all (so far) trending up pretty strongly, but also seem to be running out of steam. Since they’ve been up so much over the past few days, though, I’m not comfortable shorting them here. I’ve been looking at this chart for a bit, trying to glean something from it, but I can’t. Truthfully, I could argue both sides. I’m going to just hold off and look for something that’s a bit cleaner.
EUR/AUD – Short
This is interesting right now. It’s been mostly trending down since 10/25. There was a bit of a rally at the end of October, then a large drop taking out the prior lows on the first. There was a bit of a rally from there — making a lower high — then another drop. Over the last day, there’s been another rally, and it looks like it’s formed yet another lower high.
I’m on the 2h chart, and price has gotten close to the upper band, and has dropped from there. The bands are moving sideways as well, which is an indication that this is building momentum. RSI is somewhat pushing up but the faster line has just pushed above 50, and the slower line is still below.
I like this to the downside, so I’m going to drop to lower timeframes and look for entries.
GBP/USD – Short
This looks pretty good this morning, and I’m skipping USD/JPY to talk about it. Price had a lot of wild swings through October, but overall, it largely moved sideways. Last Friday, price rocketed up, took out any highs that were made during October, and reached a key area that formed during the downtrend that occurred between Mid-July and October 1.
Today’s daily candle has a large upper shadow, but price is sitting near the lows of the day (though technically price is still up on the day). Dropping down to the 15 min. chart, and there appears to be a nice bear-rally forming — though the rally didn’t happen at the support level I’d like broken to short this. So, putting my entry below that key area, with my stop above the highs before the bearish move, I’ve still got a 3.5 R:R.
I think I’m going to set an entry here then call it. I can start to feel the discouragement and anxiety start to creep in.
Thanks for reading! Let me know in the comments what you thought about today’s analysis. And stay tuned for more analysis and trades.