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Home / Market Analysis / Sunday December 18: We Have The 7 Best Setups For You Right Here

Sunday December 18: We Have The 7 Best Setups For You Right Here

I just love trading and the past few weeks showed that clearly to me once again. It’s a constant mix of planning, adjusting, being patient, managing your downside and striking hard when the opportunity presents itself. I wrote a short article about that yesterday and I recommend that you take a look at the article.

We are approaching the end of the year and the Trump rally seems to be fading. There are more and more articles coming up about professionals who predict a turnaround. However, this hasn’t happened so far and last week just saw a small consolidation, accompanied by the widely anticipated FED rate hike. Below you find a snapshot of my watchlist for the next few days. I think there are quite a few setups building up, especially on some of the USD pairs after the strong USD rally.

 

Overview

The S&P 500 hasn’t done much last week and price closed right where it opened. It’s too early to call a reversal but a retracement seems likely at one point – especially once traders start taking profits going into the end of the year. Gold has done exactly what we predicted and it has arrived at the 1130 support zone. Without any safe haven flows, Gold has now fallen all the way from 1380 over the past few weeks. Once risk off picks up again, Gold is at a good price to start buying again – but now is not the time just yet.

overview

 

USD/JPY

The USDJPY 4H 1H combination is a goo example of how to play reversals on lower timeframes. On late Friday, price broke the support at 117.80 but immediately reversed into the 20 SMA. Keep in mind that entering a new reversal just 4 hours before the Friday close is not a high probability play. However, going forward, another break of support could open the way for a move into 115.50 area and a decent short-term opportunity on the 1H chart.

Timing the trade on the 4H is a little trickier because you have a few support levels plus a trendline below current price.

usdjpy

 

USD/CHF

The USD/CHF has arrived at a major resistance at 1.03 and if the late Friday USD weakness persists during next week’s trading, we could see a few interesting short reversals.  I suggest you also keep an eye on the USD Index if you plan on trading USD related pairs to time your trades and to get a sense of USD strength or weakness.

usdchf

 

USD/CAD

The USD/CAD is another example how reversals can play out on the 1H timeframe. Price dipped into the resistance zone at around 1.34 on the 4H chart. On the 1H we can see that the support barrier is below 1.332. A strong break accompanied by USD weakness could trigger an interesting short opportunity here as well.

Keep in mind that reversals on the 1H are usually not giving you runner trades so be quick with the exit and don’t push your luck. Things can turn fast on the 1H.

usdcad

 

GBP/CHF

The GBPCHF has just arrived at the 1.30 resistance and the ongoing rally has paused for now. There is a lot of volatility right now visible on the daily chart with plenty of wicks to the upside. I am waiting for a break of the 20 SMA on the daily. There are a few other GBP pairs right now showing a similar scenario.

gbpchf

 

EUR/JPY

I really like this structure here on the EURJPY and although price hasn’t fully arrived at 126.3, the area above 124 is a high impact resistance zone as well. So far, price is still far away from the 20 SMA which means the trend is up but it looks like volatility has been increasing over the past 2 weeks and Thursday’s candle showed a small rejection.

Once a level is so obvious, you will often get a fakeout and I could imagine something similar happen here.

eurjpy

 

 

CAD/JPY

The levels rarely get better than the CADJPY 88.7 level. However, price is on a high momentum uptrend and calling a top would be way way too early. Those are the exact scenarios where the impatient amateurs get slaughtered. Sit tight on your hands and wait for a strong move lower before you start considering a reversal.

If you see a short-term shift to the downside, you may be able to catch a short-term trade on the 1H if you can find a good structure.

cadjpy

 

 

 

 

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5 comments

  1. must be the only trading site that did not analyze NZD-JPY to sell

  2. hi rolf, why you remove bollinger band from your chart and do you trade 1h TF?

    • It will become clearer soon 🙂 We are preparing lots of new material and step by step instructions with our methods and setups.

      Lots of new stuff coming in 2017.

      Best regards
      Rolf

  3. Hi
    re: Eur/Jpy pair mentioned in this post, when you mentioned “fakeout” do you mean if price appears to reverse lower at resistance but then rallies up to break the resistance subsequently?

    re: timeframes traded– do you recommend picking a timeframe eg 1h and sticking to that for all your watchlist pairs or do you trade off different timeframes depending on whether you see setups forming on which timeframes? if so, would that be confusing for a newer trader?

    Lastly, if you enter on say a 1 hr timeframe, do you always exit on the same timeframe stop/profit target exit or do you sometimes exit earlier on a lower timeframe?

    Thanks for sharing!

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