Maybe more to go?

USDCAD strength came in yesterday from the base pattern that held and the rally could have more to go. The next hurdle is a break of 10540.

There is the possibility that the USDCAD will be rejected here of course, particularly if Oil rallies. It has been sent back twice before from here and we could then see a double top pattern develop.

USDCAD

The Loonie daily chart shows a multi-day consolidation that is about to be resolved. The balance seems to favour CAD strength with a break out on this chart to the downside that could be good for at least 100 pips or more as the oil price looks to have stopped falling, an Oil price rally is good for the CAD.

There could still be rallies in the US$ from here of course that may present useful opportunities to sell at higher levels.

Cable strength?

The failed hammer gave some good day trades yesterday and today there is no downside follow through - so far. Evidence of consolidation is building up with the 240 min chart showing this continuation hammer.

The US$ is in lock step with a major correlated market right now and the latest TradersClass video, available later today, shows how to take advantage while it lasts.

Pattern failure

Back to the trading desks this morning following the UK bank holiday to find a candle hammer. However, as trading is now unfolding this could fail. Cable needs to drop below the lower tail and this type of failure frequently results in a good move.

The failure is never a foregone conclusion of course, as we saw two Hammers form last week that followed through for a one day rally, they were short lived but the fact that we are seeing several of these form suggest that bounce back potential is still very high.

USDCAD bounce

The Euro follow through to the downside yesterday gave a useful 45+ pips and then rallied strongly for another 40+. The video of the days Euro moves with volume is now avaialable to TradersClass members, http://www.tradersclass.net/.

The USD is attempting a bounce against the CAD this morning but volume activity is yet to confirm the move. Following the strong down day a bounce is highly likely but a break of this double touch bottom would see us selling this pair.

False Break

The Euro break now has some of the characteristics of a False Break Reversal, so uless support is is found very soon the long tail, Shooting Star, candle shown here points the way to lower levels.

Today's the Day

Yesterday provided a further consolidation day when scalp trades were the way to trade. This morning has seen a break above this week's range and 1.4780.

This rally could well have further to run unwinding some of the sharp fall from last week.

Watch the Euro

The Euro and Cable made a good run later in the day yesterday and the charts show a strong rally may still develop.

The hourly chart needs a move above 1.4780 to break the trend line and set up for the rally.

Sideways Day

On a day when there is very little momentum in either direction, it is useful to take a look at additional techniques that can help us with the detective work of fathoming the next direction.

This short video shows how activity charts can point us in the right direction: http://www.tradersclass.net/fxvideos/volcadswf/

Consolidation time

After the fall comes the bounce. If this turns out to be a flat, 'dead cat bounce' or a major retracement remains to be seen, but further falls in Cable are less likely today.

The 240 minute chart shows this is the longest period of consolidation so far this month and the change in colour of the blue candles suggests more to go during this consolidation phase. The Gravity line is also flat now and for a sustained rally, it also needs to turn blue.

Longer View

The US Dollar has become a one way bet and these major re-alignments brings some incredible swing trade profits. Day traders have to fight the tendency to attempt trading every little correction when the only game in town is to Swing trade the long move.

At some point soon there will of course be a convincing bounce back and the trick is to take profits along the way and be ready for the correction at major support.

So just where is this support? The weekly chart of Cable show there is a cluster of potential support points at the curent levels. If, and/or when this area breaks, the way seems clear all the way down to the 2006 lows at $1.75.

Swissy takes off

The USDCHF pair has been wandering but not selling off today and late this afternoon it may well have resumed its clime as the US$ strengthens and the Swiss Franc weakens.

The 15 min chart shows an early entry opportunity but further low risk entries may present themselves if we get some pull back corrections.

More basing activity

After the mini bounce in the Euro that just gave a scalping profit of 20+ pips.

There is further basing evidence in the Euro, Cable and Aussie, etc. All have the potential to retrace if they can get out of the base area.

And now the Euro

The Jappy trade produced over 150 pips and this morning it could be the turn of the Euro for a bounce back trade.

The decline has moved a long,long way in just a few days and the 240 min chart is showing clear signs that it is not going lower yet. This may be just a temporary reversal but good for a trade or two.

Jappy Strengthening

Despite the big four putting in new lows against the US$, the Japanese yen didn't take part.

This morning it's the strong one and the USDJPY pair just might make a break below the yellow line.

Correction Day

After the sea change that occurred with the US$ last week, it's time for a pause. The majors today are recovering a little against the dollar and the chart of the USDCHF shows just how far extended the move became.

The Swissy hit the Fib extension resistance area at 10850 and has made a useful correction back this morning giving 60+ pips before breakfast.

Onward and upward

The Swissy has just moved another 240+ pips from the 10510 area and this running trend of US dollar strength could well have much more to run.

However, there will be bounce backs from time to time so taking profits along the way and then adding back in can build a large position whilst taking and preserving profits along the way. The blue arrows show clear add in areas on this 8 hour chart and many more can be seen by focussing right down to the 15 min charts.

Enjoy the trend!

And the Swissy performs

The USD against the Swiss France showed little sign of selling off early this morning and continued to make higher lows before moving sharply higher for an excellent day and multi day trade.

Right now, the blue lines show the wave mutiple target has been hit for today and is in the region of the previous daily highs so we are not expecting too much more action in this session.

Swiss Franc update

The USD against the Swiss Franc made a new high earlier today but has yet to follow through.

Technically, it has moved up strongly in recent days and has formed a series of waves that, as the chart shows may have completed with the yellow lines at equal lengths.

Also, price has retreated a good many times from this area and the hourly chart had formed two bear candles.

If the next days trading does not follow through on the upside, the combination of factors above will conclude today's price acation is a False Break that is highly likely to become a reversal.

On the move

This morning the Swissy is following through with the start of a weakening phase that could see a running trend as well as a useful day trade.

Where next for the Swiss Franc

Whilst the Euro continues to show signs of a further move down unless a temporary rally kicks in this week, the GBPCHF weekly chart show just how far down the GBP has moved over the last year. The general consensus is of course that the UK Britsh Pound is a very much weaker currency than the Swiss Franc.

Three up weeks in a row has brought price back to the resistance area that has stopped previous rally attempts, so some further sideways action is likely before another attempt at a break out.

That the Swiss France has been so strong over the year is no surprise given its historical role as the worlds safe haven currency. However, recent events have tarnished the reputation with the UBS announcing a mega million write down with the rumour of more to come resulting from dodgy sub prime deals. This sort of thing just won't do from what was perceived as the safest currency in the world.