2015 Quarter 2 FOREX Outlook

Looks like Q1 went just as I planned it would. I took the time to highlight some of the highest growth potential pairs in the FOREX markets. Quarter 2 of this year looks like it has some big plays for traders and investors alike. In this article we will explore some of those opportunities.

First let's look back at the top 3 major pairs over the past three months.
USD:
The dollar rose significantly against every pair except the Swiss Franc. Some potential pairs to trade that stood out to me were EURUSD, USDJPY, and GBPUSD. To be more specific, I have set a target for selling the EURUSD into .97000.

I have set a 122.000 target for USDJPY and a GBPUSD target of 1.42300 to sell into.

GBP:
The pound had a rough time carving out any significant gains or losses due to a mix of sell-offs and rallies between all of the major crosses. GBPJPY has been stuck in a range between 185.000 and 175.000 which makes me weary of engaging in any trades with this pair. If I do it will be within the range or for a breakout above 185.000. GBPCHF sold off heavily and rallied to fill the gap only to turn back around and tick back down towards the middle of the gap.

GBPUSD should continue lower into my target of 1.42300. Along with this we have GBPNZD which I have set a target range of 1.94 and 1.92 for traders to sell into.

EUR:

The EURO was the at the butt of everyone's trades. This currency was sold off more than any other pair in the major currency markets. Above is an illustration of EURGBP which was sold off very heavily in the first quarter. I see this selling continuing and I've set a target of .7000 but not before the market retraces a bit into .75000 and then sending the pair lower. Again I put emphasis on a EURUSD .97000 target. EURJPY will be falling a little more this quarter and I have set a target of 120.000 for the pair seeing as how the JPY needs some relief from being sold by all the other major crosses. 

Crossing Moving Averages

I want to go over moving averages and what it means when they cross each-other's paths...I won't explain moving averages because the word is linked to an attachment that will give you a very good explanation on what they are. I want to focus on the phenom of crossing moving averages or MA and what that means for traders and how you should approach your entries or exits based on them.

I will use the NZDJPY on a 60min time frame as my example:
On the chart we can observe the Slow MA crossing under the Fast MA which is circled in white and labeled 1. This is a signal that the price of the instrument is ready to make a move higher and/or the trend is ready to change; but because all indicators are lagging we also see that the jump happened some hours before the indicator could show it. Normally a trader might consider this the signal for he or she to jump in the trade long but if we are patient we see that this is a 52-fake-out. For this to be a true trend change we would need to see candles come back down into the Fast MA for a test; after the test the price should close above the MA and move on to continue higher with both Moving Averages under the candles and the Slow Moving Average should remain underneath the Fast Moving Average until another crossover...

 Which leads me to the second half of this lesson.

The second crossing of the Moving Averages on the chart above circled in white and labeled 2 is the reverse of what I explained in the first paragraph. When the Slow Moving Average crosses over the Fast Moving Average we want to see candles comeback up to test the Slow Moving Average but close below it and continue lower; as we observe in the first blue highlighted box (10/14) where a beautiful Doji Candle was posted right at the Slow MA and then a gorgeous tumble down came next. A sell at this point is the proper way to trade a Moving Average Crossover.

Though they are easy to spot, it is very easy to be fooled and trapped into a position which can presenting false signals which is what we observed in the first demonstration of an MA crossover. Be patient and let the trades come to you; more so, know and accept when you're wrong. Don't let a lagging indicator be the reason why your account balance suffers. 

What's In Your Wallet?

The past few weeks have been great in the Forex Markets... If you're a good trader (lol). So recently We've seen movement across all regions especially the European markets and US. I want to take some time to look over a few pairs from a range of regions around the world to give my Forex Traders a birds eye view of where the money is and how to get to it.

USDJPY:
After weeks of beautiful buying right to our target of 110.000 this pair has now backed off in the most interesting way. No heavy selling but a steady grind lower; My idea is that this pair is falling to support at 107.000 before it takes off towards 115.000. Indicators are telling us that the price wants to take a turn for the worst but we must be patient and hold on to our long from 105.000 until we see that the bears truly want to destroy everything we've built.

 From this 240min chart above we can see that the pair has consolidated quite a bit but has moments of serious volatility which we can benefit from but must ultimately be cautious of. Buy more at 107.000 if it holds but be ready to close early if it doesn't. Try again at 105.000.

GBPUSD:

Has been a retail market murderer. The banks did a classic dramatic sell off and now all the small (dumb) money traders think its in a down trend...check your monthly charts. With that being said I'm heavily bullish. This pair has created a nice uptrend that started at the beginning of this month. it has made higher highs and higher lows. It reached a high of 1.62250 which alerted me to start paying attention. Fortunately there's been a pullback to its support at around 1.60400 which has held 3X's so far. On 10/11 the pair reached a low touching the weekly chart's 50% fib level and then turned around for a beautiful march into Sunday (10/12) Asian Session trading. Today it respected a bit of resistance at 1.61200 and also intra-day support at 1.60500 LMAO. See what I mean. Up and down, up and down is the story this pair is telling.

 We need to see 1.61500 taken so we can see 1.62000 taken so we can officially say this downtrend leg is over and we can continue with our monthly uptrend. Start looking to build your long positions. 

EURUSD:

This pair looks like it's finally coming out of its downtrend and ready to move on to bigger and better prices. From a daily chart perspective we can see that the pressure to the downside is still very relevant but I'm not fooled by the NY and European Traders' antics. They've reached their price target (Profit taking Fibonacci Level) and today the traders overtook 1.26650 resistance so I'm looking to build early long positions here. From 1.26650 with some caution for the downside play. 

EURGBP: 

This pair is looking similar to EURUSD. With a long standing downtrend in its way a lot of traders don't see any upswing in this pairs future. From my daily chart below I see something different; this pair is crossing over its into buy territory on the RSI indicator...and this indicator is lagging.

 Today the pair broke its resistance with a strong bullish candle. I see this pair moving higher shortly. My idea here is to buy from the resistance in hopes of it acting as support now for a stronger and bigger move higher. 

Last but not least,

GBPJPY:

Having a nice selling period as traders take profits and look for better prices to buy from. On a 240min chart we can see that this pair is ready for a stronger move lower which is where the GBP bears will get their chance to sell but they better do it quickly. This pair is approaching an important support line at 171.644 which is just above the gap-up from September. If this isn't held sellers have a second target at just below 171.000. All These prices are good places for buyers to consider their orders. I know these are contrary ideas but the markets are giving us signs of multiple opportunities and only 1 will be immediately correct... 

Pick-A-Side. 

US Equities Watchlist

Today was an interesting day in the markets and I want to take the time to go over a few stocks for my readers who are looking for some opportunities in the markets as the end of the year looms and the mad dash to lock in profits before the year is over is upon us.

AMAG Pharmaceuticals Inc. (AMAG):
This stock gave us a nice gap up to start the month and has recently filled the gap at the end of last week and finishing the fill today. Below we have a 60min chart which shows us that the stock found new highs and slowly fell over a course of 2 weeks back down to where the gap originated from, 29.95. From here I see the stock rebounding so this looks like a great support area to test and buy from. From this support we want to see the price reach above the most recent highs around 33.00 for a breakout to and a continuation of its uptrend. If this doesn't happen then I'll be looking to short the stock around 31.50 back down to 30.00 and from there 25.00 to fill the previous gap from September 26 mentioned in one of my earlier posts.

Alibaba (BABA): 

This pair has been giving retail traders and investors the trading test of the decade lol. This stock has been hella volatile and looks like its being manipulated by big bank traders and other institutional traders. From our chart below we can observe its path of vicious whiplashes day-in and day-out. 

 From this view we can see that the stock has broken its support and Friday (10/10) showed us the market rejected it when it tried to return home at 88.00. From here we can assume that this stock will be pushed lower as it's making lower lows and 86.00 looks like the spot to sell from. 

Citigroup Inc. (C):

The banks stock has taken a similar route as BABA, where the price has fallen out of last weeks range and now has broken its support at 51.00 and now is rejecting that price and using it as resistance. From here I see the price following the lower level trendline where we should see the price reach 49.50. 

 To keep up we probably need to get our sell order in around 50.50 and if we can't catch it there we'll wait for lower lows and catch it out of the gate around 49.75. 

Lakeland Industries Inc. (LAKE): 

LoL; This might be the easiest stock of them all. Buy at around 22.00. 

That's it.

You can listen to the news if you want but remember this; newspaper columnist and tv news reporters are not financial professionals. They get paid to write and talk. 

SodaStream International LTD. (SODA):

This stock may be lower than usual recently but that has nothing to do with the reality of business. Companies with tangible products that have proven to be money makers do not go out of business and disappear. More likely they get bought by bigger companies which can benefit from the transaction and usually save the struggling company. This pair is showing a classic opportunity where bigger institutions and companies help to degrade the price of a stock and then buy it all up under the radar. 

From the chart above we can see the beautiful gap that;'s going to get filled and it's our job to be right there when it does. From this min chart we can observe the test of the price 20  two times and the consolidation which is a sign that big traders are not shorting this stock, little (dumb) money is. Additionally peep the rising RSI trend-line. 

YUM Brands Inc (YUM):

Posting lower lows today. Only one thing to do here, Sell Sell Sell. I was in TacoBell yesterday and realized they didn't have one of those new Coke machines that lets you make your own flavor of soda, maybe that's the reason for all the selling (lol). Whatever it is, let's be technical in our approach to selling this stock. 

From this 15min chart we can see why I say sell. I would be looking for a short around 68.90 which was support from last-week that was broken today. We need to see if this level will hols as resistance as bearish traders take the price lower. Be cautious, who wants to be caught in the middle of some hedge fund's limit-buy-order all of sudden; so keep your Stop/Loss tight. 

The Fate Of The USD

So as we all know the FOMC will be meeting again to announce their almighty important notes and we traders need to be on out toes. I want to take the time to go over some of the most important currency pairs during these hours of waiting. In This report we'll cover the most traded USD pairs available, EURUSD GBPUSD, USDCAD, USDJPY, and AUDUSD.
GBPUSD: This pair has taken a turn towards the stars and looks like it could be reversing its current downtrend. Since July this pair has been steadily drifting lower and lower and reached a yearly low of 1.60000 which acted as support for some congested trading going back to...get this...October of last year...and also the 50% Fibonacci retracement price. On the daily chart below we can see the confluence in color.

After the first test of the low the pair sprang back up to 1.64000 where it was rejected and once again fell to and then below 1.60000 before is was pressed back up to 1.61585. On the hourly chart below we can get a closer look at how this pair has been performing with this weeks movements highlighted in blue. From 1.60000 the pair took a steady path up and actually rose above its resistance before it was pressed back below it. This tells me that the traders want prices above this and their only preparing the situation strategically; so should you. 

I would be looking to sell this pair from 1.61585 and buy it at 1.60000 keeping a close eye on it just in case the banks want to take the price a step lower to the 61.8% Fibonacci at 1.57000, another great place to buy. 

EURUSD: This Pair looks like a little more fun. It has taken its drop step by step, almost in perfect lock step formation as far as the 240min chart shows. We can see from the chart below that this pair has found some good support around 1.25500. From There it has been on a consistent march back up towards the 61.8% Fibonacci level it broke about a week and a half ago. It was rejected back down from there and ended up being supported just at 1.26650 which also acted as resistance on the way down. It's good to see the bank traders are respecting technical levels. 

I'd be looking to buy this pair from or near 1.26650 with some bias to the downside so watch your position with caution as this pair has been known to be hella volatile. 

USDCAD: Is a completely different beast. This pair has seen some serious congestion where traders are sending the price flying and falling all within 1 or 2 sessions. On a 60min chart we can observe that this pair is still being supported by its original up trend support line but it does look to be losing some steam as far as the bulls are concerned. Around 1.11600 would be the level I'd sell from IF I was going to make any trade. I don't see much more upside potential in this pair and I don't think the banks are ready to lower it out of its uptrend just yet (think manipulation) 

AUDUSD: Is another pair which looks to be turning its tides from being a seller to being a buyer. Over the past week we've seen the price hit its most recent lows only to pick up Monday with nothing but buyer behind it. Though this pair has been seriously volatile we can clearly see its upswing and potential for more bullish moves. Price us testing near term support around .87500 where we could see the price bounce and continue its uptrend. I want to see .88800 cleared before I step in for a buy only because of this pair history of volatility especially during odd hours. 

 And last but not least,

USDJPY: This pair reached awesome new highs and then....nothing. It's been so lackluster I wouldn't even suggest a trade if you're not already in a successful position already. If you are in a position I hope it's a long position and I would only suggest buying more while you have a chance before the hike towards 115.000 which probably won't take long considering all the stalling that's going on in the pair now. Below on a 60min chart we can see the consolidated trading of this pair. 

After The ECB

Last week we had one of those important ECB announcements. Let's go over what happened to all the relevant instruments this week. The market has been very interesting. [EURUSD, EURJPY, EURGBP, EURAUD, EURCAD]
EURUSD: Highlighted in blue we can see the movement of this pair throughout this entire week (Beginning 10/5) Its clear that this pair has bounced off the weekly 76.4% Fibonacci Retracement level and got back up to its 61.8% where it was rejected...so far. On the 240min chart we can see that the price has back to its most immediate support level at 1.26650. I see this pair moving higher prior to the FOMC announcements.

EURCAD: Has taken a similar route. On the 60min chart below we can see that this pair has journeyed above 1.41245 which actually has been great support for yesterday's trading and today's as well. I would treat this pair just as I would its big cousin EURUSD. Buy at support levels until FOMC announcement get nearer. 

EURGBP: Has elevated itself from its lows and is now above the pivotal .78277 level where it found support. Monday the price bounced off this price and found its way up to make new 2 weeks high around .79000. I would consider this a cautious buy because generally speaking this pair is a seller. but for now look for bouncing opportunities. On the 60min chart below highlighted in blue we can see this uptrend and the dynamics of how .78277 has been traded around, below and over. 

EURAUD: There was no point in highlighting this pair's weekly route because its in an obvious range. Yesterday gave us some hope of a breakout but it was rejected so harshly that I could hear the retail traders cries from New York to Australia. From a range low of 1.43440 to the range's high of 1.44500 there has been quite a bit on congestion. In my opinion I don't think this pair is worth trying to trade at this point. I would wait for the pair to clear 1.44500 before I reach in for a buy. 

Last but not least...

EURJPY: Also in a range but Japanese Traders are known to be a bit more methodical with they way they go about achieving prices. On Tuesday (10/6) we saw this pair reach its lowest of lows and the very next day (10/7) it reached a weekly high at 137.938. Today we saw the price collapse back down to the lows around the 136.500 level. From here I see more congestion but not before we get a chance to buy. I would be looking to buy this pair at 136.000 because Japanese Traders love their price targets and they don't like to waste time getting there. If this pair isn't reaching for new heights it's most likely looking for a particular low. Save yourself 50pips and a day of stress and wait for them to send the price to 136.000 tonight. 

Most Watched Stocks In The Market

This is an analysis on some of the most watched stocks in the U.S. Equity Markets today. You StockTwits kids should love this. I want you all to observe the gaps and trends which could make you a lot of money over the next few days: IF you trade them correctly.
To Start this report off we have SodaStream International Ltd. (SODA): Maker of the machine which gives consumers the ability to make their own soda at home.
From a technical perspective this stock is a bit unappealing other than the fact that it's in a downtrend. The gap that occurred after the weekend didn't excite me. That Just tells me that the market will be retracing soon to take those prices back and who knows when some hedge fund's limit order will be hit. I'd wait until price comes back towards the top of the gap around 27.50 for a short. From there I'd look for a target around 22.60 (bottom of the gap). Below Is a 15min chart which shows us The area which needs to be filled (in blue) and the consolidated trading from yesterday which rolled over into more falling today.

Next up we can take a look at Yum Brands Inc. (YUM) which is a beverage and fast food conglomerate. We see from the 60min chart below that this pair has been dominated by serious traders. Retail kids are getting crushed no doubt. It has ranged in a gap it created back in July of this year. It made some false breakouts and breakdowns the whole way through and currently the price has fallen out of the range.

The chart above gives us a chance to see the falling RSI which is an indicator that the price is ready for some rest. Now on a 15min chart we can see that this pair was seriously congested yesterday (highlighted in lighter blue) and today it whipped the shit out of the retail traders by making a dramatic spike and crashing back down severely. Around 71.15 is the bottom of the gap and the price has been rejected back below it today. That's the area you should be looking to short this stock. 

Let's move right along to Sunesis Pharmaceuticals (SNSS):

Another stock that has gaped down. This company has seen a horrible situation since Monday because it fell more than 50% in value since then. Around 3.85 is the closes resistance for this instrument and it doesn't look like it'll be back to it any time soon. On a 240min chart we can see the price fall heavily and the heavy selling since. 

On a 15min chart we can see the stocks daunting task of recovering towards any price of sustainability which is around 2.00 but it'll have to reach that then sky rocket nearly 100% just to get to the bottom of the gap its created(Highlighted in blue). 

Technically I'd sell all day.

Cree Inc. (CREE) is an LED manufacturer and makes semiconductor products for power and radio-frequency applications. This stock has a couple of gaps it needs to fill and I'm just waiting for the market to come along and sweep up every short trader's money when it does lol. The first gap runs back to August of this year when the price fell a little over $3/share to around 46.00. That gap was never filled. The second gap came recently around the 1st of this month when the price fell from around 39.50 to around 35.90. This gap was never filled either. The 60min chart below tells the story. 

To be honest I only see a sell from what seems to be near term resistance (33.40) but be cautious for the bounce that is to come. And when it comes don't be hard headed. Shoot for the gap fills, you know the markets will punish you for being a rogue trader and thinking trends last forever. The 15min chart below helps us see a more immediate opportunity. 

The first gap to be filled will be gap #2 where it'll probably range between its extremes then on to gap #1 where it'll most like go straight for the top of the gap. 

Last but not least we have Lakeland Industries Inc. (LAKE) who manufactures & sells safety garments & accessories. This stock has been fun recently. It has recently broken to important resistance levels and has risen well above its bullish trendline. The first resistance level was broken at around 8.00 and from there the price elevated to around 9.78 where it broke though yesterday and met some heavy resistance which we can observe from out 60min chart below.

 This gave me the idea to buy but then I kept going with my analysis. I observed that the reversal candle was a bit bearish and a bit engulfing lol. So then I considered the RSI...It was bearishly diverging from what the price was doing. On The 15min chart below we can see the divergence much clearer and we can also see the near term support we are testing today: If this doesn't hold I'm looking at a sell from around 9.83 back down to 9.00 then 8.00 if that doesn't hold. 

Hacked Market Trades Made Me Over $10k

This week has been a pretty lackluster one in my opinion. Not good for trend trading but an awesome week for some day trades. I made Over $10,000 in USDJPY by holding on to the rest of my long position from way back when I bought it at 105.00 and I intend to hold it even longer after seeing the markets Post-ECB emotions.

On a 240min chart we can see the uptrend begin to consolidate but still provide us with small momentum towards the upside. This may not be the best environment to try to buy and hold any trades more than a few hours to a day at most. 

For a view of something we could've actually traded we should move to down to a 60min chart. Below on the chart we can see highlighted in blue a 5 day view of this pairs movement; What we observe is that this pair provided at least 15 pips everyday that could have been sucked out of some day trades. Monday we rose during the London Session only reverse the entire move + some. Tuesday We see the pair rise 15+ pips during late London/Early New York Sessions and consolidate into the end of the day. Wednesday Was an awesome day because we got to see the pair test 110.00 for resistance twice only to fall 20+ pips. The Fall continued into Thursday and reached a floor towards the end of the New York Session. Once the floor was reached during the Asian Session the pair decided to march over 100 pips which lasted through Today's London Session and New York Session. 

If you were looking for some action this week USDJPY was just one pair that provided daily pips for the acute traders. 

A Weekend Out In Pittsburgh

Over the weekend I had the time and chance to go to Pittsburgh, Pa. simply because I wanted to. I actually like the city a lot. It has a completely different vibe to it than the other Pennsylvanian cities I visit.
Unlike Philadelphia, "The Burgh" is much quieter and slower than the fast paced business oriented Philly streets. While I was in Pittsburgh I had the chance to explore their parks, people, and food!
Being from Texas, I'm really big on visiting places with friendly people and I must say; The People in Pittsburgh are AWESOME. They're super friendly and the city is so clean...compared to the rest of the major cities in the state (lol). Although it isn't the most diverse city it does have a great deal of character and  culture. I recognized a great Italian presence and Polish as well!! Black people, we're everywhere so I wasn't surprised to see us but I was surprised at how well the city has integrated. It may not be a Utopian society but the people there surely do share a lot of space and it seemed acceptable. The people seemed to have created an atmosphere of cohesion.

Aside from the people I was amazed at the landscape of the city; The skyscrapers aren't numerous but their designs are really unique and cool. Seeing as how the city is known for its 3 rivers and bridges I think its only right that they don't cloud the aerial views with buildings. Speaking of rivers and bridges, the city is divided by these structures and creates an interesting traffic flow where commuters must wind their way through hills, mountain sides, down through valleys & troughs only to arrive at bridges that reach over sprawling rivers which seem endless in the horizon. The sunset is truly beautiful.

Trades Worth $1 Million

Not only have I identified some awesome opportunities in the US Equity Markets, but I have also identified some great opportunities for profits in the FOREX Market as well. So I usually stick to the "majors" just to keep things simple but today I'm reaching into the "minors", no "exotics" though.

EURCAD is an interesting pair to consider at this point with all of the EURO weakness in the markets. Traders have been selling the pair heavily since the ECB rate announcement over a month ago. On daily chart below we can clearly see some support around 1.41245 which was resistance back in October of last year...Like I said, interesting. We know markets trade in mirror form basically reflecting whatever was before into the future and either repeating it or doing the complete opposite and doing so in the same fashion as the prior market moves.

Upon closer examination we see that this pair has been doing a bit of testing of traders and prices. The RSI has been slowly rising while price has been congested in a wide range. Below on the 240min chart we can see that this pair has tested the traders by breaking 1.41245 on an intra-day level, probably shaking out weak players, but ultimately respecting 1.40500.

 I see a buying opportunity from 1.40500 for the serious traders but for the newbies and skilled traders I would suggest waiting until the pair has taken over 1.44000 to ensure your mental state is not corrupted by evil bank traders with more money than you and less worries than you (lol). 

GBPJPY has been consolidating in a shitty range for a couple of days at this point giving traders very few options with ways to trade this pair. On the daily chart below we see the pair stuck under 178.737 but above 177.097 

On the 60min chart below we see the pair in such a slow moving tight range that it's hard to even get an entry on either side of the extremes. That leads me to believe that a drop lower towards 175.270 could be coming to take the price down to recent resistance that was broken to test it for a new support level.

If not the pair will rise through 178.737 from  the range low at 177.097

EURGBP is looking pretty shady. I have no entry yet but I do have some signals that tell me something serious is coming for this pair. Not only has its decline been sharp and swift but it has come with some divergence from the RSI, where we see a slight rise. This tells me there's extreme manipulation going on and the big traders have been suppressing the price (probably because its the easiest EURO pair to sink lower by force.). Below on the daily chart we can see the clear mis-communication between the price and its price's strength.

Wait for a floor and then buy.

EURJPY is showing us some signs of a reversal. Recently the pair has seen some heavy buying going on and is now above an important resistance line that is now acting as support 138.373. Not only has the price been elevated recently but it has broken above its downtrend resistance trendline. The daily chart below spells out the story for us.

Along with a snap of the trendline we see the RSI above 50 but below 70. This is an awesome time to buy this pair! I say buy at/around 138.373 for an initial profit target of 141.215 (recent high). 

GBPUSD is a prime candidate to start building long positions in. On a 240min chart we can clearly see the pair respecting 1.61585 and our RSI is moving our of oversold territory to give traders a chance to join the big boys for the long ride home back to the highs we associate with this pair. 

From an entry at or around 1.61585 I set my profit target my profit target at 1.64000 and after that, the sky is the limit. 

 As for USDJPY I say...Stop being so afraid of 110.00, we all know the banks are going to take this pair to 115.00. I have a video posted (right side of page) that even tells us the likelihood and story of the trip. Below on a 60min chart we can see timid traders waiting for the banks to come back to this pair (and out of EURGBP) to send the price higher for us.

 If you're like me and got in around 105.00 be strong and confident, wait, you'll be happy you did.