Hello Traders! I hope everybody made some profitable trades over the past week.
I received many thank you notes as a result of my previous analysis where I signaled binary options trades to prepare for the right setup to sell USDCAD. Over the last two market days, the bears returned with a vengeance. No matter what time frame you chose to trade, every single one should have been a winner returning some major profits. Below is a naked chart of USDCAD from the last two days marked with both the support and resistance trendlines.
Chart of USD/CAD currency pair:
As for this upcoming week, the market is experiencing a recovery referred to in the industry as a “dead cat bounce”. A dead cat bounce is a colorful name that describes how a bullish market can sometime respond when reaching a resistance line or significant standard deviation. The price of an asset can bounce back up off the floor like a falling cat.
Recovery categorized as a dead cat bounce doesn’t mean that buyers are dominating the market. The bullish trend is still present. However, this type of market recovery means that you should anticipate a horizontal move, where the market trend will moved within defined boundaries.
In the above described scenario, it is best to be patient. The market is volatile at this time and can quickly switch from bullish to bearish trends and then back again. As a result of all this volatility, the best trades will happen in short time frames. WAIT for the right setup and then just place your trade.
I can’t stress it enough: be patient. Once you notice a break from the trend, don’t hesitate to pull the trigger and make the trade.
GBPUSD – 4hrs chart
A break from the resistance trend line will initiate a bullish move. Until then it will move in between a low peak and the resistance line.
When trading GBPUSD, try using the Big Ben Trading Strategy. It will help you focus on what is the right setup before making a trade.
AUDUSD – 1hr chart
The AUDUSD currency pair is moving in wide up and down swings. In the below chart, I’ve marked both the resistance and support trend lines. The price will continue to move between the trend lines. Keep your eyes out for the breaking point.
Crude Oil – 30min chart
Take a quick decision when breaking the bullish triangle with a preference for a bullish trend.
S&P 1 hr chart
The price of the S&P index will continue to move between the support and resistance lines (marked on the graph.). Be prepared for a breaking point.
I’ll be happy to get your comments so don’t be shy :)!