Free Profitable Forex Newsletter
Hey! This is Philip with this week's trade update of the Free Profitable Forex Newsletter!
For this week, we won’t share a new trade idea, and instead, we’ll provide an update on our current open positions and how to manage them on the way to the targets.
So, let’s take a look at each of our open trades separately below and discuss how the trades may progress further.
This was actually a trade idea that we sent months ago and have already profited twice on. When we sent this newsletter, we said it’s time to re-enter long as USDCHF is about to start ascending again. It took a few weeks, but we are seeing that happening in the past couple of days now.
As can be seen in the original email here, we expect
USDCHF to rise toward the 0.95 area and beyond in the following months. Next year, USDCHF could trade toward 0.98 based on the current market outlook for the Fed to hike rates and tighten policy more aggressively than other central banks.
For now, we are holding the long USDCHF trade aiming for the 1st target at the 0.93 zone, and the 2nd one toward the 0.95 zone (see chart below).
Potential warning signs that this USDCHF setup may fail are if the EURCHF decline doesn’t stop here and instead continues to push below 1.05. This would certainly mess up the USDCHF outlook as well. However, as we have noted on previous occasions, that seems fairly
unlikely.
The other potential risk is if EURUSD doesn’t progress lower toward the 1.12 - 1.13 area. As always, when trading USDCHF, you have to keep an eye on EURUSD and EURCHF separately and how they are impacting USDCHF. The best scenario for
our USDCHF trade here is a EURUSD that is in a downtrend and a EURCHF in an uptrend.
Short GBPUSD, 1st target reached for +170 pips (sent Oct 15 - view here)
Initially, we sent this as a potential setup to short around the 1.38 area, but then decided to wait as the BOE meeting data was very near to the time when GBPUSD reached 1.38. We then entered short following the BOE’s meeting and their shocking decision to hold rates unchanged (they’ve been promising a hike for
weeks).
Thus, to no one’s surprise, GBPUSD is plunging down and is likely to extend the decline toward our designated 1.32-1.33 price area. After our first target at 1.34 was reached for +170 pips, we now aim for the 1.32-1.33 area, and potentially lower.
Potential warning signs that this trend is reversing could be if GBPUSD starts rising toward 1.35 and above. The 1.35 zone should hold if this downtrend is going to keep pushing further lower.
Two weeks ago, when EURUSD was trading around 1.16, we said wait for the Fed meeting and Nonfarm payrolls before entering this trade. Interestingly, the market decided to also wait for the CPI report yesterday before sending EURUSD on a dive to fresh lows as expected. EURUSD is now trading around 1.1460, and the downtrend should continue, breaking 1.14 and then moving toward 1.13 in the following weeks.
A warning sign we don’t want to see is a move above 1.1550. This zone is now resistance that should hold the downtrend intact. Still, if it somehow breaks (though unlikely), EURUSD could then make an attempt higher.
A more critical resistance is the 1.16 zone. It represents both the resistance trendline of the bearish channel as well as past lows. It has to hold if this downtrend is going to proceed as expected. It is unlikely that EURUSD would test
this area again (at least based on current market perspectives), but there it is, as a way to give you a reference point for managing this trade.
Finally, our last trade is EURCAD that we sent last week. This one is not working exactly as expected, though it still has good chances to do so. The main reason is the big rise in USDCAD yesterday and today.
But there are good reasons to expect that USDCAD will meet strong resistance soon in the 1.26 area (therefore helping to contain EURCAD). And if EURUSD pushes further lower and USDCAD tops out, then EURCAD
will be on the right path to resume the downtrend.
A big warning sign for this trade would be if USDCAD breaks above the 1.26 resistance zone. In this case, even if EURUSD keeps falling, EURCAD may stay in a sideways range or even start rising. Thus, it would be prudent to exit this short EURCAD trade if USDCAD breaks above the 1.26 zone and stays above 1.26. However, that still seems unlikely to happen.
In terms of EURCAD levels, the stop remains above 1.4460, but as described above, it is also important to watch what’s happening with USDCAD and EURUSD. So, even if EURCAD rises slightly above 1.4460, but USDCAD is reversing from 1.26, it
would make sense to hold short EURCAD as long as EURUSD remains in a downtrend.
Trade signals from past week
- October 28, 2021 – Long USDCHF from 0.9135; in progress, around +75 pips currently (trade idea sent Oct 21)
- November 4, 2021 – Short EURUSD from 1.1585, triggered following the Fed meeting; in progress, around +115 pips currently (trade idea sent on Oct 29)
- November 4, 2021 – Short GBPUSD from 1.3570, triggered following the BOE meeting; 1st target reached at 1.34 for +170 pips, now in progress toward 2nd target at 1.32-1.33 area (trade idea sent on Oct 15)
- November 5, 2021 - Short EURCAD from 1.4350; in progress around -60 pips currently (trade idea sent on Nov 5)
TOTAL: 0 pips in the past week (+170 pips on 1st part GBPUSD position)
TOTAL: +4035 pips profit since October 1, 2018
If you have any questions or feedback, don't hesitate to reply to this email.
Thank you!
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High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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