Welcome to my trading blog/journal. This is where I share my thoughts on various financial markets (primarily Forex right now) as well as talk through the individual trades that I make. Today, I’m analyzing the market for Tuesday, December 5th, 2023. Read on to see my thoughts on various currency pairs.
I’m having another only okay day. But like I’ve always said, there’s nothing to do but power through; so that’s what I’m going to try today.
GBP/AUD – Short
I saw this initially and it looked like something that would make for a good short, but after looking a little harder, I’m not sure it fits in my rules. There was a peak in Mid-August that price pushed down off of, bottoming early October; and price has largely moved sideways from there. I can see a period where I’d consider this in an uptrend as well as a downtrend.
Last night, price made a fairly strong spike that pushed it up to near the highs of the sideways movement. On the 2 hour chart, it looks like an extended move — price pushed up strong, pushing above the upper band and pulling the slower RSI line into over-bought territory.
On one hand, I could see this dropping off of the highs of the range and pushing down. On the other hand, I could see this being a move that’s turning this chart into a true up-trend. Either way, the more I look at it, the less I like it, so I’m going to hold off.
AUD/JPY – Long
Okay. Starting on the 4 hour chart, price has largely been trending up since the end of October, though there’s been a good amount of chop in the interim. There’s a couple times where price has appeared to reverse, but it ended up rallying. Today, might be another one of those days.
Overnight, price made a strong push down, taking out at least 2 strong key areas. That push also pushed well through the lower Bollinger band and pulled the slower RSI line deep into oversold territory. This is where trading is tough. This is so oversold, and the move looks so extended that I’d expect a rally from here. That said, what caused this drop? It’s so strong, and has taken out so many key areas that this could be a reversal to the downside, and there’s more weakness in the future.
Dropping down to the 15 minute chart, price has certainly seemed as though it’s rolled over to the downside; but price has bounced off of the lower band and is coming out of oversold in the RSI. I’m not going to do anything with this right away, but I’ll keep an eye on it long still. If price makes a push up and takes out those key areas again, pulls RSI above 50 and gives me a pattern to trade in to, I’ll pull the trigger here.
EUR/AUD – Short
Unlike GBP/AUD, this has been in a definite downtrend for at least 2 weeks. Like GBP/AUD, though, this has also made a strong rally over the last day or so. It’s once again leaving me with the question: is this a spike that I should short in to, or is this such a strong rally that it’s now a reversal move?
Dropping to lower time-frames, and I’m not gaining much clarity. The 1 hour chart is showing price in overbought territory; but price is still below overbought on the 15 minute and 5 minute charts. In fact, I’m almost seeing more evidence to the upside on those charts.
Here’s another scenario where I could argue both directions, and because of that I should trade it in neither. I’ll leave it alone for now and revisit depending on how it moves.
USD/CAD – Short
At initial glance, this might be my b est option. This is in a clear downtrend on the 2 hour chart; starting possibly early November, but definitely mid-November. For the last couple of days, this has been on a rally. It’s pushed through one minor key area and seems to be stalling at the next, more substantial key area. That area is also where the upper band is, so price is failing at that level, too. RSI is still above 50, but both lines appear to be rolling to the downside.
Dropping down to the 15 minute chart and things look a little more interesting. Price is pushing closer to the 50 RSI level, but outside of that, it’s most recent price action is an up-trend. It does look like things are failing around this price level, but there’s also a lot of chop that’s been introduced in this pair as well. I see a decent bear-rally on the 5 minute chart, but it’s fairly deep, so I’m not sure the R:R is going to be there.
This is my favorite pair on the day, though, and I haven’t gotten a trade in yet at all this week, so I’m going to run numbers here and possibly pull the trigger, given a good R:R. If not, I’ll hope to revisit the markets later to see if any opportunities develop after lunch.
Volumes are pretty low today, so I think I’m going to stop there. I’ve got one pair I like already, and a couple more that I plan to revisit. Fingers crossed today goes well!
Thanks for reading! What did you think about today’s analysis? Let me know in the comments. And, as always, stay tuned for more analysis and trades.