[Week 29 - 2020] Trades Recap and Trade Setups

Hey Trainee Traders,

This week I will be giving a more in depth analysis on my years of experience trading the S&P500. First off, last week analysis was spot on as shown below:

Before:

I have discussed that price has the potential to reach the recent high and we did just that. However price was unable to break the resistance level and remain in consolidation period.

After:

However, the resistance being constantly retested and we could very likely see a new recent high / break of resistance.

Overall the risk on assets remains bullish, and a break of the recent high could signal a fast pace upside towards the 3332 area, which was one of the high earlier this year, resulting the RSI reaching the 70+ area (overbought area) before price falls back towards the 50 EMA. As long as we remain above the 50 EMA, the market is bullish.

XAU/USD

Before:

Last week we discussed that gold has a short opportunity when the trendline is broken.

However, we can see that price got a reversal from the horizontal support level and is now back within the channel. We could potentially see a break in the resistance level which will be one of the key asset to look out for retest before we enter a long. Alternatively, if the support level does not hold (1795 area), we can get a sell position when retest is complete.

DXY

Before:

Last week, we show that price is likely to respect the channel unless the upper trend line gets broken.

After:

Price has reached the TP level which was the previous low. I believe now price will consolidate until either the support gets broken, which we can take a sell position upon retest is complete or a long position when the upper trend line of the channel gets broken.

Spot on analysis!

Trade Recap

GBP/AUD

We discussed that price could get higher upon reversal of the ascending trend line.

However, price reversed strongly towards the downside. Our existing long trade would have been closed at the blue zone as indicated or at least at the breakeven level. Then short opportunity presented itself as we formed a head and shoulders pattern and a retest of the shoulders before reaching a new low.

GBP/JPY

We have also discussed that one the support area is broken, we can look to short this pair.

We manage to reached our TP1 level (134.2 area), but was unable to reach the TP2 level. Provided to close at TP1 or at a small profit @ 134.6 area whereby the descending trendline got broken.

Trade Setup

AUD/USD

Trend line has been broken and we can look to enter long position upon retest confirmation at the current level or at the ascending trendline.

GBP/JPY

Price is in a consolidation zone and we could potentially see the price movement indicated as above. Only enter upon retest confirmation.

EUR/JPY

Overall bullish with this pair. Look for long position upon retest of break of resistance or at the support level. Unless support region (121.97 area) is broken, look for a sell towards the next support region.

EUR/NZD

Price has formed a double top pattern at the descending trendline. Short position can be entered upon the break and retest of the neckline towards the support region or another short position when the support is broken and retested.

That is all for this week. Stay profitable and safe!