2017 Currencies Review

Just read an article on ZeroHedge reviewing performance of stocks, currencies and other assets for 2017:

The Dollar was a bloodbath this year – the biggest loss for the greenback since 2003…

Well, if that’s a bloodbath (see the chart below, USD top right – click to enlarge), I am quite Bullish on USD for 2018 (even though it is likely going lower before it goes higher)!

NZD depreciated much more, even though it bounced in December. JPY did not have a very strong year either.

EUR is a clear winner for now, but being extremely overbought and reaching a major resistance on Monthly, I am Bearish in the long term.

GBP had a nice bounce from all time low, but in light of the prior Bearish trend I do not think this will last.

AUD, NZD and CHF are more or less unchanged, while CAD is somewhat Bullish.

AUD has been flat, trying to push higher against the stronger Bearish cycle lasting 3 years from 2013 to 2016. I would expect a breakout towards the yellow resistance and a likely rejection from there. Could start a major Bearish cycle in 2018.

NZD is the weakest currency in 2017, and it doesn’t look like the descent is done. However, I note the prior Bullish wave in 2015-2016 against which the current drop is trading, and the Bullish trendline it is approaching.

JPY, while registering a negative year, is trading against a very strong Bullish wave. And momentum of this current Bearish cycle is slowing down. Expecting a bounce towards 2016 highs.

CHF is still pretty much unchanged after January 15th 2015 SNB fiasco. And yet, the price is sitting on a very long term Bullish trendline – no other currency is showing such consistent Bullish trend, lasting since 2000. Expecting a bounce and retest of the highs, but a temporary break towards lower support cannot be discounted.

Finally, CAD is slowly pushing against multiple resistance levels. Bullish momentum remains more likely, but I think it will have a hard time turning into a strong, multi-year Bullish cycle. Additionally, I do not think that Oil prices will reach much higher from where they are right now, unless a major war breaks out in middle east (which certainly cannot be ruled out).

27th of December 2017

This is a very interesting rejection that could lead to CAD reversal. And of course, as AUD, NZD and CAD have been leading the recent Bullish surge, it could in turn cause correction in these other currencies…

…speaking of which, AUD certainly looks a little bit overextended… However, judging by the Weekly chart, I would not bet on this Bullish trend reversing. A correction, on the other hand, seems very likely.

In addition to the above, I am waiting for GBP to continue its Bullish trend and it seems that AUD is the main currency preventing that from happening. Finally, current price on GBP and AUD indexes seems very fitting.

I would not be eager to Buy GA just yet, but there are other GBP pairs to work with.

26th of December 2017

Quoting Scotiabank:

AUD positioning is a little more perplexing; the modest net long in the market that has persisted since mid-year has turned into a large and relatively significant net short. Week on week, this is the largest positioning shift against the AUD since the carry trade rout of 2007. There is little obvious fundamental news to have driven such a turn in sentiment over the past week, in our opinion.

This drop in Net position is certainly interesting, especially in light of recent strong Bullish action on AUD.

Looking at all major AUD pairs the Bullish cycle is very clear against all other currencies, but also interesting is the fact that price is trading near important resistance areas right now on many pairs:

Given the size of this positioning shift, it does not seem likely to be caused only by profit taking before Christmas. What do these large traders know that we don’t? AUD pairs certainly deserve some serious attention in the coming week.

Here price is approaching a long term value zone on Daily. As it climbs higher I am looking for any signs of weakness that would signal a Sell trade.

Price has been trying to break below this level on multiple occasions, each time reaching a little bit lower. Comparing momentum between Bullish and Bearish swings, Bears have been stronger throughout the whole range for the past 3-4 months. Current Bullish swing is slowly climbing towards the higher range boundary. This is definitely a Selling opportunity.

Complex Bearish correction in a Bullish trend. Looking for price rejection, ideally as it breaks the nearest support on H4.

Price is breaking above long term range with some strength. I am still skeptical about long term Bullish continuation, but only because price seems to be too expensive to be a buyer. Watching for possible rejection.

Even though trendline has been broken, another test remains just ahead to confirm change of trend. Given signs of weakness as price approaches this level, rejection and a Selling opportunity is the main scenario.

11th of December 2017

Price has been rejected from the lows, but if it shows weakness trying to break through the current price congestion, this is a good Short opportunity.

After strong rejection from the lows last week, and weaker Bearish correction, my bet is that Price is going to test the Daily highs again.

It is a struggling Bearish trend on Weekly, but a Bearish trend nevertheless. Since Bulls are failing to show any signs of strength as we are trading at the low for the year, Bears are favorite to continue lower.

Price trading in a rather slow complex Bullish correction after breaking Weekly support. It can reach as high as the yellow resistance level without changing Bearish scenario.

Complex Bearish correction against Bullish trend on Weekly and Daily. Expecting rejection around these levels and retesting the high. We are approaching an important psychological price of Brexit breakout last year. Overall Bullish momentum on Weekly is still quite slow, but persistent.

4th of December 2017

Only waiting for a weak pullback, preferably between 2 yellow levels on H4…

Very tricky rejection, but Bearish trend remains intact. There is a good chance of spending some time between the two yellow SR levels. Rejection from the resistance will signal a Sell entry.

My trade from 3 weeks ago just got closed in BE. Still considering possibility of re-entry.


1st of December 2017

That happened faster than expected. Let’s see how the price acts at this lower support and if any weaker pullback is offered to establish a short entry.

That short idea did not work out very well and the trend is now officially reversed. Still trading in a bigger range on Weekly, but there is enough distance to the upper boundary to look for Buys on a weak pullback (which was already available on the approach to the upper yellow resistance on H4).

While Daily Bearish wave is accelerating, rejected from the TL, it is still trading against a bigger Weekly Bullish move, and now approaching the first real challenge. I would not expect the price to go through this area easily.

Price turned quite sharply, and momentum shows decreasing Bearish strength, increasing Bullish. Note that the whole Bearish wave on Daily is moving against a much bigger Bullish move.

I can imagine that many Bears are panicking right about now, seeing their profits being undone with alarming speed. A weaker correction will give them some temporal relief, and it is exactly when I would be looking to bet against them.

This is an interesting spike. Bearish move got violently rejected, but it is clearly a news spike, so I would not give it too much weight. More interesting is the fact that most of the Bullish candle was undone right away, and price settled somewhere around the middle for now.

More price action is needed to make a decision. I never like to base my trades on news related spikes.

Looking at all CAD and CHF pairs separately, the picture is even more interesting. The spike was bullish for both currencies, CHF coming just a bit later than CAD.

The real question is which currency will be able to sustain this Bullish momentum? That will decide whether CH is a Buy or a Sell.

Today NJ looks much better, and failure to break this level is a clear Buy signal. Momentum on Daily is not very favorable for Bulls. However, I would not want to put any trades on right before the Market close…

…Let’s see if that’s little congestion area on the left offers any decent resistance.

…it did, but somehow I managed to miss the trade!



30th of November 2017

As we approach the bottom boundary of this 2 months long range, I am watching closely for a breakout. EG might be preparing a Weekly trend reversal.

Price failed to reach the lower support, and trend remains down, albeit very slow one. On H4 price is being rejected from the most recent swing high – expecting another retest of the lower support.

Similar to EN, price is very tempting to Sell, but all we’ve got so far is somewhat slowing Bullish momentum, with Bears showing little signs of strength. If the price starts breaking through the indicated levels on Daily, Bearish argument will have much more going for it.

Bears had something going for them when they pushed into the indicated support (first down swing), failed to break it, but then attacked again with increased strength. It was painful, no doubt, to see all their efforts erased in the current Bullish swing, going as far as breaking the previous swing high.

Given the stronger momentum of this Bullish swing, I am fully expecting another retest of the high. The overall Bullish environment on Weekly also helps.

This is a decent little Bullish correction, offering an acceptable Selling price, but I am not eager to add to my NZD shorts or JPY longs. At any rate, not on the approach of the major support on Weekly. If price slowly reaches towards the TL I may reconsider.

Just like many other EUR pairs, the price is tempting, and the consistent slowdown in Bullish momentum helps too. And yet Bulls manage to push higher, while Bears fail on each subsequent approach to the TL. Right now we are at a point when something has too give, with triple high above and TL right below. A reversal might not be very far, and any failure to break higher will offer a selling opportunity.

Note also that we are right where we were before the collapse on 15th of January 2015 – that was a long way up and it took 3 years to undo one day’s damage.

This is one of the worst situation for any trader, when you make the right call and yet miss an obvious rejection entry trigger, only to see the price rally without ever looking back, hoping that it offers at least some kind of correction. Live and learn…

Price continues higher, and while the correction looks tempting on Daily, I am not eager to become more exposed on CAD – not just yet. Let’s see if that’s little congestion area on the left offers any decent resistance.

Speaking of CAD, it has managed quite a push lower in the recent days, and unless it shows some Bullish strength, I just might have to reconsider my views.

Yet another EUR pair which may offer a Selling opportunity very soon. Note strong Bearish waves (each making lower lows) any time Bulls are getting near the previous highs. As we are getting above the middle of this range, I am looking for any weakness/rejection as an excuse to establish a Short.


29th of November 2017

While trend is clearly Bullish on Daily, the prior Bearish wave on Weekly is still causing some concerns. Price is approaching an important resistance, and Bears showed some strength in the last 5 weeks, breaking Bullish TL.

As Price trades near the recent high, I am watching for a potential breakout failure.

Recent Bullish strength on UC is caused by CAD, while USD is only trying to recover from the drop the last week. I still note that current Bearish wave on CAD is much slower than the preceding Bullish.

Weak Bullish correction on H4 is starting to show signs supply coming on the Market. The whole Bearish move is still not comparing favorably to the prior Bullish wave, but seems to be accelerating in the last 3 weeks.

This correction might extend higher to the green line, without changing the trend, and since the logical place for SL is above that line, the price is still too low to Sell.

Fading the trend – what could be more exciting? This is one of these situation when I really want to Sell, for no other reason than the price being too high. But a trade like this takes some convincing, and Bears at least could have held the lower price as they broke below the short term range on H4. No, if that’s all they got, I’m not Selling – not just yet.

Bulls showing some strength, having broken Bearish TL, let’s see how long they can hold before Bears regroup. I am not eager to be buying yet – not after the recent Bearish wave on Daily. There is a resistance area to watch for just above the current price.

…And lower it goes. Buying looks increasingly less likely, and Selling on a weak pullback to the green support-turned-resistance increasingly more likely.

AH is slowing down its descent, but Bulls fail to reverse the price. I’ve been holding a Short for more than 6 weeks now, and not looking to cash out anytime soon – the break lower looks more likely than reversal. Given the huge range we’ve broke out from on Weekly I would rather expect to reach the low of the year in the next 2-3 months.

It never feels quite right to Sell so late in a long term Bearish trend, but the current correction provides a sufficient correction to justify the entry. Bulls are doing everything they can to bring the price higher from these levels, and yet they fail, again and again. Each subsequent push is reaching lower highs and shows weaker momentum.

While the current push looks quite strong on H4, it still failed as soon as it started approaching the high of the previous one.

28th of November 2017

GJ is slowly correcting lower, and as it breaks the recent low many stops will be triggered. Given the context of weak correction after an explosive Bullish move 2 months earlier, a rejection of this coming break is very likely. Note too that we are in a weak pullback after a strong break above major Weekly resistance – now support.

Any signs of rejection or weakness on the break in the next couple of days is an opportunity to Buy with expectation of Weekly trend continuation.

Individual currencies hardly need any comment, with GBP pushing for a break, while JPY correcting against a Bearish trend. JPY has a chance of reversing the trend in the next couple days and will need to show weakness right about now.

NU is trying to break now triple low on Weekly. There is a good chance it will fail, but the current correction is providing an acceptable price for a Sell entry, on any lower TF signs of weakness of the current Bullish wave.

This is an interesting level to watch on EC – multi year high where P has been rejected on several occasions already. Current Bullish trend is speeding up on Daily and a break is almost a certainly. The question is whether there will be a weak pullback following it, allowing for a Buy entry. The area of green line is a nice price to Buy, but it will be at least a couple more days before this opportunity can be confirmed.

This is very interesting – P rejected from the recent break above the 2 months long range. While Weekly trend remains Bullish, the 2 most recent swings on Daily indicate higher probability of Bearish PA in the short term. Looking for a small pullback to Sell, aiming at least for the first green support.

P continues pushing lower, but the current Bearish wave is much weaker, compared to the previous one. Expecting breakout failure.

Even though P is breaking below the recent range on Daily, Weekly still looks like a potential opportunity to Buy, provided P shows inability to go lower in the next couple days.


Fighting the Market

No matter how much I am trading the Market, it never fails to fascinate me, always providing new lessons. It can be a harsh teacher sometimes, but always fair. Unforgiving of any mistakes, it always keeps me in check.

Being a trader is a conscious choice I have made. Being a miserable, losing trader is a choice I was making for many years through unnecessarily fighting the Market. I have never won – not even once.

Every day I face the same choice over and over again – to follow the Market, being grateful for every lesson it patiently teaches me, or to fight against it, making it into a vicious enemy I can never win against.

Being a trader is not always easy, but it is only me who can turn this vocation into a miserable pursuit of psychological stress and financial pain. And it is easy to find myself struggling – all I have to do is start expecting something from the Market.

Expecting to be right. Expecting to know the future, predicting the price. Searching for certainty where there is none. Refusing to accept the contradiction. Trying to avoid discomfort.

Unacceptance of the way the Market is – the only cause of frustration, confusion and, ultimately, suffering that many traders experience daily.