The Week in Pictures

Each week (or until I get bored) I would like to share with you my take on the major currency pairs, and attempt to explain in simple terms what I think happened. I will leave the "why" up to someone with a higher qualification in cognitive psychology.

EURCHF is moving sideways, trading within the 270 pip channel (yellow horizontal lines) which it entered on Jan 13th, and shows no sign of breaking out.

EURGBP is trending down, trading within the 85 pip channel established on 21 Jan, again no sign of breaking away from this.

EURUSD broke out from its uptrend on 3rd Feb, and is now roughly back where it started its lauded appreciation on 31st Jan at 1.3580. Personally I was expecting the trend to continue for a little while longer, and had already battened-down Watcher to a maximum 10 trades per pair, and was looking forward to a possible situation where I may need to prune off some of the older trades. Again, it reinforces some of my theories (particularly the theory where I state most theories are bunkum) about the balance between the pairs and the fact that this is indeed a zero-sum game (unless of course you are a broker :).

GBPCHF is still going strong on the uptrend established 25th Jan, with no signs of running out of steam.

GBPJPY volatility has been decreasing since 28th Jan, and broke out of it's consolidation phase right on queue on 3rd Feb. It now appears to be moving sideways after some violent moves typical of this pair.

GBPUSD has increased in volatility this week, and looking to break out of the 265 pip channel established on 25th Jan. (The gaps in the trades that Watcher has established are due to the use of stop orders. Since it contra-trends, if the trend away from the mid-point is violent enough, these orders do not get executed, saving margin and number of out-of-the-money orders. These grid-points will be used again when (!) price retraces.

USDCAD remains in the 110 pip channel down-trend established 31st Jan, touching a new n-day low point on Friday. This is usually an opportunity for a big manual trade to catch the retrace, but lately I'm just monitoring the "native" performance of Watcher, and comparing what happens with signals given by both the swing indicator and the Smoothed RSI Inverse Fisher Transform. This new intermediate low is still a long way off its lifetime low so I'm not looking for any further big moves down.

USDCHF however, remains close to the lifetime low of 93 cents that it touched on 31st Dec last year, and provides manual opportunities each time it approaches that level. The latest encroachment ended on 2nd Feb, with the swing trading indicator clearly catching ALL of the resultant up-trend. Note the final level for the week was near to the n-day mid point.

USDJPY broker out of the 100 pip downtrend, established 27 Jan, on Friday. Next resistance level seems to be around 83.2 which will cross over the n-day midpoint, and start Watcher selling again.

The above screen-shots show some of the trades taken by Watcher, my grid-trading expert advisor for the MetaTrader 4 platform. On-screen indicators (Buy arrows in Green, Sell arrows in red) are courtesy of my swing trading indicator, and, in order to show the advanced timing indication, my Smoothed RSI Inverse Fisher Transform Indicator is shown at the bottom of the screen. For more info on the technicals, or any other questions, please leave me a comment, or contact me directly at john.taylor.hk@gmail.com.