Welcome to my blog! This is my trading and investing journal where I share my thoughts on various financial markets and share the actual trades that I make. Today, I’m analyzing the Forex market for January 25th, 2024. Read on to see my thoughts for today.
I woke up at a good time this morning, but stayed in bed longer than I should. By the time I got up it was close to 8:30, so I just started looking at charts. I pulled a few out that I liked, then grabbed a protein shake and some coffee. Now, I’m ready to dive in.
GBP/JPY – Short
I took a short at this short yesterday, but my entry was pretty much the lows price reached yesterday before it rallied. That rally wasn’t incredibly strong, though, and as of this morning, price is back near where I entered my trade yesterday. In fact, price is rallying a bit from that level, and that could be a good rally to short in to.
On the one hand, this has tested this level roughly 4 times, this being the 5th, so I think it’s reasonable to assume that this is poised to break at some point soon. On the other hand, though, it’s failed at this level several times, and could certainly continue to do so.
Additionally, during the last strong spike (last Wednesday), a bit of a support area was created that’s still outside of the lows it’s tested since then. I think if I were to short this again, I’d want to outside of that level. If I were to do that, though, I’d either have to take the trade on a longer-term chart; or wait a while to see if price gets down to that level and then makes a move that suggests I should enter.
Either way, I’m not sure this trade is viable right now, so I’m going to move on and potentially revisit later.
USD/JPY – Short
This is similar to Pound-Yen in that it’s been up strong largely since the beginning of the year, but lately has seemingly been rolling over to the downside. In fact, on the 2h chart, this looks like an upside-down cup-and-handle that’s forming. Unfortunately, the entry point on the cup-and-handle is lower than I’d love it to be; but price is creating a bear-rally on the 15 minute chart right now.
The more reliable play here would be to set my entry order at the break of the cup-and-handle, with a stop above the handle. But I’d then have a roughly 275 pip target, and would expect to hold for 4+ days in order for price to move that much. While I am considering doing more position plays, where I am comfortable holding for that amount of time, I’m not there yet and it’s also Thursday and I don’t want to hold through the weekend.
My other option is to play the bear-rally on the 15 minute chart, lock in profits when/if price gets to the lows (that would complete the “handle”) and hope price pushes further, and be able to get out more quickly if not. That’s my current cadence, so I think that’s what I’m going to do. I’ll cancel it if the weakness appears to go away.
GBP/AUD – Long
Starting on the 4 hour chart, price has been strong since the beginning of the year, peaked last Wednesday and pulled back some, and has been moving sideways (with maybe a slight upward trajectory) since. This morning, price dropped down to the 50 MA, but failed to push significantly through it and is currently making a push up. This might be where I want to get in.
I’m a little hesitant, though. Zooming out to the daily chart, and there’s a nice base that has formed, but that base is below the highs that were made on Wednesday. A part of me wants to drop down to the 15 minute chart, look for an entry there, using Wednesday’s (the 17th’s) highs as my target. But when I do that, I can see multiple key areas where price could stall.
When/if I implement my position trading strategy — taking trades on the daily/4h chart and holding for several days — I’ll look to trade something like this on a longer time-frame, but since I’m not there yet, I’ll just hold off.
EUR/AUD – Short
This is interesting. Price had been weak for a couple months prior to 2024; but at the beginning of the year, price rallied. That rally peaked last Wednesday (maybe I should do some research to see what happened/what news event occurred that day), and has been pulling back since. There were several days of sideways movement, but this morning, price made a strong drop, breaking the lows of that sideways movement.
From there, price has rallied, and on the hourly chart, I already see a rally/base I can set my orders around. Overall, I like the break, so as long as the target I choose offers me a good R:R, I’m going to set an entry order here.
I have another couple of charts singled out, but at a cursory glance, I don’t love how they’re moving anymore. Maybe I’m a little burnt out after looking at 5 charts and putting out 2 entry orders. Or maybe I’m just laze. Either way, I do have 2 orders out there, and I don’t really feel like looking at charts anymore (and I don’t want to make bad decisions), so I’m going to call it here for the morning. I’ll monitor my current orders and maybe revisit things later this afternoon.
Thanks for reading! What did you think of today’s analysis? Were you able to take advantage of any movement and catch some pips? Let me know in the comments. And make sure to check back frequently for more analysis and trades!