Ozzie and Guppy

You go, Ozzie! That’s what I feel like saying to this pair since it has broken out of its range yet again with a nice looking candle. But will it go? One encouraging sign is that it didn’t fall all the way back to the bottom of the consolidation range—it stopped well short of it which is bullish. The candles up since that point have been strong ones until the bearish piercing one that just completed. Note that it’s near the point where it fell back before some caution is warranted. It broke out overnight and in the early morning hours when I was sleeping so I didn’t take the trade on the breakout. What I’ll do now is see how it acts around this period before jumping in one way or the other. As I pointed out yesterday we’re still in an uptrend (since March) so the bias is to the long side. Here’s the three hour chart:

As far as the Guppy goes (GBP/JPY) it’s stuck in a small range as it tries to find its direction. In the chart below look at the beautiful symmetry of the moves and note that the second move up didn’t go as far as the length of the first one (I’ve marked the moves up with purple lines). I’m somewhat fanatical about proportion and symmetry because the market seems drawn to it as well. I’m still short in the pair (the tiny triangle marks where I took my short at 150.49). At this moment it’s at 135 pips profit. I still have my stop at a profit point of 80 pips at 149.69 and its high yesterday was 149.62 so that was a good stop. I may move it down a bit more since its high today so far has been 149.43. Whatever this pair now does, we know an important thing about it and that is that this narrow range of 148.06 (the low since I shorted it) to 150.49 is meaningful in some way. Otherwise it wouldn’t be hanging here. More to come. Note also how it rejects lower prices with long candle shadows in the past. It's not showing these here but that's not infallible. You have to combine things such as candles with support and resistance and other indicators before making decisions.

This is a frustrating week for me as a trader. Other committments keep demanding attention and I'm spending little time with the charts. But that's part of life and I'll be able to get back to it soon.

None of these are trade recommendations and trading involves substantial risk.

©Dianne L. Fecteau. No part of this can be excerpted without the author’s specific written permission.