Welcome to today’s entry into my market analysis and trading blog, where I discuss my investment ideas and technical analysis of various securities. Today, I’m analyzing the Forex market for October 19th, 2023.
I think I’ve got the bulk of my new strategy ironed out, and I’m ready to put it into practice. It’s a Thursday, so it’s not the most ideal time to start something new, but if not now, when? I’ve had my protein shake, made coffee, and meditated, so I’m ready to get started.
This new strategy doesn’t entail a RSW process. Rather, I’ve got a list of all of the possible pairs I could trade (based on the 8 currencies I look at), that I’m going to sort by Volume and analyze in descending order. Let’s see if we can find a place to make some money!
GBP/AUD – Neutral/Long
Price is in the middle of everything right now. It’s In the middle of the Bollinger Bands, in between two trendlines, and the RSI is hovering right around 50.
Kind of like it long, though, because there’s a pretty strong key area here, and price looks to be returning to the upside, so it might be viable. I’ll revisit if I don’t see anything else I like.
GBP/NZD – Short
This looks like a fantastic candidate for the mean-reversion strategy. Price has been trending up for about a week and as of right now is in a bit of a base. The base is forming around the upper Bollinger Band and RSI is in overbought levels. There’s also a key level from back in late September around the same area price is hovering around now.
I’m expecting this to correct a bit from here, getting back to at least the 20 MA, so I think I’ll look to pull the trigger here. The only thing giving me pause right now is the fact that price is up on the day and is closer to the highs than the lows, so it may be difficult to find an entry today. I might end up just playing this 4h chart base, but that would be a longer-term play and I’d have to use a slightly larger position size.
I won’t pull any triggers quite yet, I’ll come back if I don’t see anything else I like.
GBP/CAD – Neutral
Long if anything. Just pushing above 50 on RSI, but up against upper band. Multiple levels of resistance outside of the highs, where price could stall — doesn’t look like it’ll offer a great R:R.
EUR/JPY – Short
This has been in a pretty tight range since the beginning of September, and over the past several hours price has reached the highs. From there, it already looks like price is pushing down — I could even argue a double-top going back to the beginning of the week. Technically, there might be a bit more upside available here to that resistance area, but I wouldn’t be surprised if it drops from here (more like, if it does drop, I could see it drop pretty hard from here).
Dropping down to the 1h chart, price appears to be pushing down, but unfortunately, I don’t see an actual pattern yet. I’ll keep my eye on this today so I can get in as soon as a tradable pattern forms (a bear-rally or base, ideally).
GBP/JPY – Short/Neutral
This is an interesting one today. Price bottomed out at the end of last week and made a bit of a spike at the beginning of this week. Throughout the week, price largely moved sideways, though a double-top could also be argued. Yesterday, price took another strong push down, reaching the lows from late-last-week, and made another small rally this morning.
This rally, though, has only pushed to about half of the gains it made earlier in the week, and has stalled at a pretty strong key area there in the middle. I guess technically this isn’t a mean-reversion trade — it’d be a continuation trade — but it’s coming off of a counter-move, not a breakout, so I still like it.
Dropping down to a one hour chart, Price largely looks strong. I don’t see an entry move forming at all yet. I’ll hold off here for now, but keep my eye on it/set an alert to short it if it starts to push back down.
EUR/AUD – Neutral
At the upper band, but not really basing/stalling. RSI isn’t in overbought yet. Not playing breakouts, so not looking long (will set an alert).
EUR/NZD – Short
Starting yesterday, this has made a pretty vertical move. Price has ridden the upper band for several hours and is now well in overbought levels. Looking at the 4h chart, price looks like it might be starting to reverse back to the downside.
Dropping down to the hourly chart, Price has been in the overbought area for 1/2 day now, and price looks like it’s rolling over to the downside. Technically, I don’t see a move that I would typically enter on, though I like the break of the support level it’s approaching.
I think I’ll set an alert on the break of these lows (as a bit of a “practice trade”), but I’ll wait for a base/retest/rally before I actually enter a trade here.
Thanks for reading! That was the top 7 pairs by volume/all the pairs over 100K in volume. I’ve got a couple ideas and things to watch, so stay tuned to see where I ended up actually pulling the trigger.
Let me know in the comments what you thought about today’s analysis and if you saw anything different, or if you were able to capitalize and make some money!