Welcome to my blog! This is where I share my investment strategies, my views on the markets, and talk through the actual trades and investments that I make. Today, I’m analyzing the Forex market for February 8th, 2024. Read on to see my thoughts for today.
It’s been a bit of a slow rollout, trying to get to WeWork on time in the mornings, so I’m a bit late today. I just got mostly setup, and opened the charts, so I’m going to dive in here soon — I just have to hook up the second screen, but I’m about to dive in.
Also, since I’m a bit late, I haven’t actually pulled out any pairs to analyze for this morning yet. So I’m going to start with that. I think I’m going to do my analysis of the pair as soon as I see it, rather than looking through a bunch of pairs and picking out my favorites. Being behind, I don’t want to take that time. Let’s see where opportunities lie today.
USD/JPY – Long
This is interesting this morning. I mentioned this pair yesterday, but ultimately decided against trading it. That was a mistake though, as price has been pushing up since yesterday morning and is now well above that prior resistance area. It looks a bit extended here, but it’s really on it’s first spike and RSI isn’t quite in overbought territory yet.
Right now, on the 4 hour chart, price is pulling back a bit, and that might be the move to trade. It would be a breakout trade, and not a retest/continuation trade, but the price action looks promising.
I just took a second to run numbers, and to the next resistance area, I’ve got a less than 1 R:R. I could maybe try to find a higher target, but that would feel like I’m forcing it. The other option would be to, maybe, drop down and find a higher stop level, thus decreasing my risk amount — but while that decreases the risk amount I’d say that increases the overall risk of the trade.
I glanced just in case, and I found a decent place to put a stop that would give me a good R:R, but again, I’m not sure if I want to do that. It’s a low pip amount on the risk — only about 12; which could be fine, if the pattern was better, but I don’t love it in this scenario. On top of that, with a smaller pip-risk amount, I’m more susceptible to slippage.
I drew a line on the chart to let me know where I would place a stop if I were to trade this, in case I want to revisit later. But I’m going to hold off for now.
AUD/JPY
I’m not actually sure about this one, so I wanted to talk through my thoughts. For one, this gained a lot of strength at the beginning of the month; but after a couple of days, price largely moved sideways. Yesterday, I was bullish here and sure enough, price did make a pretty strong spike yesterday afternoon.
That spike pushed price above some resistance, and as of today, price seems to be stalling around that area. That stall could be a good place to get in long, but dropping down to the 1 hour chart, I might be bearish. Price has double-topped beautifully so far today, and price is sitting on that resistance area that’s now acting as support.
I think I’ll actually leave this alone for today. The trend, I’d say, is up. So, while recent price action tells me to short it, I don’t want to counter-trend trade. If I play the double-top as a base or maybe a bull-pullback, I could maybe squeeze out a 2 R:R, but again, I’d feel like I’m forcing it. I’ll set an alert to let me know if price gets back up to those highs and maybe I’ll consider it long, but for now I’m going to hold off.
CHF/JPY – Short
This is interesting this morning. I guess at first glance, I could almost call this a counter-trend trade if I’m shorting, but the greater context says otherwise. Price was quite strong for about a month from the middle of December until the middle of January, where it peaked. Through January, though, even prior to the peak, it appears that price started to roll to the down side.
A couple of days ago, price broke the support area that held up through a lot of January, and made a new recent low. This is where the counter-trend thought comes in because since it bottomed yesterday, price has been quite strong. It’s been on a rally since midnight. That said, though, price has reached the (sloping down) 50 MA on the 4h chart, and the rounding-down 20 MA on the daily chart.
While it is a rather strong spike, it looks like it could definitely be a rally that could continue to the downside in the near future. I keep going back and forth here. On one hand, price did break a pretty strong support area; but on the other hand, the current rally is very strong. On top of that, the rounding to the downside looks less drastic on the daily chart, and I could argue a continuation to the upside based on that time frame.
I think I’ve got too many conflicting signals here, so I’m just going to hold off, unless I decide to run numbers in both directions and do a manual OCO order. We’ll see. Stay tuned to find out.
EUR/CAD – Short
This is a tough one this morning, and I almost just left it alone. Price moved sideways for about a week between the end of January and the beginning of February. From there, price started to steadily push down — appearing to stay in the range, but actually making slightly lower lows and slightly lower highs.
Yesterday, price pushed down to make another slightly lower low, and then rallied a bit and made an equal (maybe slightly lower again) high. Price has pushed down from there this morning, and is now sitting around the lows from yesterday — threatening to make new lows.
This seems like it’s ready to break to the downside, but I do have my hesitations. For one, dropping down to the 1h/15m charts, and price has been whipsawing quite a bit. On top of that, whenever price has made a new low, it hasn’t really made a run; it’s rallied and attempted to stay within it’s range.
I could certainly see this breaking significantly, and if so 🤷🏽♂️🤷🏽♂️ that’s trading. Recent price action suggests a strong rally after a drop like this, so I’m not going to short it. Taking it long would be counter-trend, so I’m just going to leave this alone for today/this week.
EUR/USD – Short
This caught my eye as something pretty promising this morning. Price has been down all year, largely riding the 50MA to the downside. Yesterday, price made a decent rally getting up to near the Moving Average, but had a strong drop from there, and as of right now, price is on another small rally, but is nowhere near the last candle’s highs. Also, where price is hovering now, there’s a small key area that formed on the drop and rise over the last 2 days.
Dropping down to the hourly chart, There was a bear rally and a bit of a base, maybe, forming? I’d be “shorting” a “high base” here, but it’s something I’ve become more comfortable with. That said, though, if I drop down to the 15 minute, there’s a lot of whipsawing here. I see a good entry area and a clear stop level, but the pattern itself isn’t that pretty. And, at first glance, my target area isn’t going to offer me much of an R:R.
It’s a bit tight today, I think I’ll leave this alone after all.
What did you think of today’s analysis? Let me know in the comments — good or bad, I want to learn and grow together. Thanks for reading, and be sure to check back frequently for more analysis and trades!