Welcome to my investing and trading blog. This is where I share my thought on the markets before I make trades, as well as talk through the actual trades and investments that I make. Today, I’m analyzing the Forex market for February 7th, 2024. Read on to see which currency pairs I like for today.
I mentioned in the past that I’ve got a plan to get away from the distractions of home each day, and that plan is to start working from a WeWork. It’s my first day working from one today, so we’ll see how it works out in the coming days and weeks.
On top of that, too, I’m attempting to trade on ToS rather than just within TradingView itself using Oanda. I’m not sure if it’ll be beneficial, but I’m hoping that with a more direct routing, and potentially a better platform, my fills are better and I’m not losing trades due to slippage or late fills.
I’m a little late this morning; I’m still getting used to this office and where I want to land and how I want to work. But It’s a little before 9, I haven’t missed the open by that much — plus I’m swing trading, so that’s not as big of a deal — and I’m ready to dive in.
I’ve pulled out 5 pairs that I like at an initial glance. Let’s see if I can find any actual trading opportunities!
USD/JPY – Long
This is strange, but I wanted to pull it out. Price was strong from the beginning of the year until about the 19th of January. Price peaked around then and started moving sideways a bit, then subtly downward for several days.
At the beginning of this month, though, price made another strong spike and pushed up to (maybe barely above) the highs that were made on the 19th. There was a base around that level, then a pullback yesterday that stalled at the moving averages that just crossed to the upside. Price has made a bit of a push up from there, and that’s the move I’m looking to trade.
After the strong spike, price pulled back to the moving averages, so I’m looking to trade this continuation to the upside. That said, after appearing to want to make a push back up, price made a sizable drop last hour. Price has almost recovered fully from that drop, but it was such a strong drop, it no longer looks like a clean, tradable pattern.
I could just play the break of the key area here, but that resistance area is a pretty strong support area from the first few days of the month, so I’m not sure how viable that is. I don’t want to trade “through” key areas.
Maybe, I could do a longer-term play; put in an entry order on the higher end of that key area, and just put my stop at the lower end, but that feels relatively desperate. I think I’ll just hold off for now and revisit that idea later if I don’t see anything else I like.
AUD/JPY – Long
I pulled this out somewhat because I was also bullish Dollar-Yen. Price had largely been strong since early December, but that strength slowly, but surely waned over the next couple months. Over the last couple of days of January, it looked like this weakness was really going to take off as price dropped strong for about a-day-and-a-half.
From there, price made a strong rally and took back about 75% of what was lost during the drop over the next day. There was a somewhat strong pullback after the rally, but that only dropped about 1/4 of the rally, and price seems to be rounding a bit back to the upside.
Similar to USD/JPY, though, there was a fairly sizable drop last hour that doesn’t really provide a clean pattern to trade in to. On top of that, the high that I’d want to use as an entry point is higher than the recent highs; and once again, that area was strong support in the past and I’d be trading “through” a key area.
Even if I were to try to trade this right now, I don’t see it trading for several hours, so I’m just going to leave it alone for this morning and revisit later/tomorrow.
GBP/AUD – Long
This looks like it has potential to be a really good continuation trade starting on the 4 hour chart. Price has largely been strong since the beginning of the year, though there was a bit of sideways movement over the last 2 weeks of January. There was another strong push up from there, but it wasn’t really sustained. Price double-topped, and pulled back a bit to within the range it was in.
Over the past couple of day, though, price has pushed back up and is at the resistance area that was broken initially at the beginning of February. Price spiked up through that level this morning, but pulled back to it; and appears to be trying to push up again here. It looks like a decent bull-pullback on the hourly chart, and a decent base on the 2 hour chart, so I’m going to pick a target, run some numbers here and put out an entry order.
EUR/AUD – Short
This is that situation again where I’ve got opposite outlooks on currencies that tend to be positively correlated. In this instance, though, I don’t have as strong of a conviction in the other pair, so I’m a bit more comfortable with it.
In this pair, price peaked back on about the 19th of January then pulled back fairly strongly from there. There was a bit of a bottoming and a strong rally at the end of last month, but that appears to have peaked and has been pulling back so far this week. Yesterday, there was a rally that reached a key area that’s been both support and resistance over the last month+, and is seemingly failing there.
The moving averages are seemingly starting to return to the downside, though the 20 is still above the 50; but RSI is pushing down and just crossed below 50. Overall, I think I like the weakness here, and I think the bear-rally is going to be pretty clean on the lower timeframes, so I’m going to check and put in an entry order if so.
GBP/USD – Short
This has largely been moving sideways over the last month-and-a-half, but the lows were broken pretty strongly at the beginning of this week. Price pushed down a ton after breaking those lows, but the drop only lasted about 1 – 1.5 days before price made a strong rally. That rally only got up to the prior lows, though, and price seems to be failing at that level.
Price action has been kind of wild here, and this might be one of those scenarios where I’m shorting a high-base, which I had tried to avoid in the past, but I feel like has worked out more often than not, so I’m going to try not to worry about that.
If I want to play the re-break of the lows, though, price is actually currently about 20 pips above the breakout area, so I think I’ll do this as a long-term play. I think to those lows there’s at least 80 pips, so I think I’ll just trade this on the 4h chart with a 30+ pip risk.
Actually, there is a base on the hourly chart and it’s almost exactly 30 pips wide. I’m going to play this base and that would be taking GBP in two different directions. I’ll cancel the opposite order than the one that triggers if it comes to that; or I’ll just cancel the other one because I like this chart better. We’ll see what price action continues to show me.
Thanks for reading! Let me know in the comments what you thought about today’s analysis and if you were able to capitalize on any movement. If you disagree with something here, let me know in the comments about that as well; I want to learn and grow together. Be sure to check back frequently, as well, for more analysis and trades!