On the daily chart...
GBP/USD has dropped below the 20-day Donchian moving average, but just by a bit. It’s the second touch of the US$1.53 level in 11 trading days. A significant break below that level would signal continuation of the decline that began Aug. 19.
On the hourly chart...
The GBP/USD decline happened in the 7 a.m. Eastern hour, with no follow-though in the two hours that have followed. The EUR/GBP chart shows a similar sharp move to the upside, and GBP/JPY and GBP/CHF to the downside.
EUR/USD is toying with a break below the somewhat sloppy sideways trend that has been in force since 9 a.m. Eastern on Tuesday. A persistent decline below US$1.3259 would constitute a breakout. A move below US$1.3112 would break below the downtrend channel that began Sept. 15 on the daily chart.
What I Track
For the daily charts, I track the 54 currency pairs requiring 20% margin under U.S. government regulations. For the hourlies, I track the dozen most important pairs, with two NOK pairs added in, because of their energy sector connection.
The majors, in declining importance, are EUR/USD, AUD/JPY, USD/CAD, AUD/USD, USD/CHF, USD/JPY, GBP/USD, NZD/USD, EUR/GBP, EUR/CHF, GBP/JPY, GBP/CHF, USD/NOK and EUR/NOK.
- phase: 20-day price channel phase, with green for bull trend, red for bear trend and yellow for neutral trend.
- trend: Price direction, green for higher highs and higher lows, red for lower highs and lower lows, yellow for neither.
- adx: Average directional index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
- 200/50: The moving average cross, green for the 50-day ma above the 200, red for below and yellow for closely aligned.
- 40/10: The moving average cross, green for the 10-day ma above the 40, red for below and yellow for closely aligned.
About my trading methods
Read a detailed explanation of my analysis method, including trading rules.
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.