Let’s zoom out

There is Chinese saying that goes like, “See jungle for trees”. May be its Japanese, not too sure. But you get the point (which is to say, look at the big picture).

I must admit I am more of a swing trader rather than a long term trader. But it is absolutely vital for a trader to know long term trends in my opinion.

So without further ado, let’s get down to nitty-gritty.

This is a weekly chart of GBPUSD. As you see, it has broken out of kumo to the downside. Purely from technical perspective, 1.91 and 1.86 seem like reasonable targets for long term traders. Fundamentals support the claim too. BoE practically signaled beginning of the end of nice and long UK expansion. The rate cut this week is mostly the first of more to come.

If you find it hard to believe considering US economic outlook, please read my last post to see where I am coming from. Besides, never argue with charts.

I am sure all the carry traders and volatility traders are breaking their head over this one. The weekly chart of GBPJPY is very interesting. I think 205 to 207 could be a strong support in medium term as it is not only a fib level but also the top of a long consolidation channel in the past . But the rebound, if there is any, could be limited to 217.50 at tankan-sen.  Technically, it could rise all the way up to 50% level at 222, where I see a huge gap if my charts are right. But it’s hard to imagine at this point.

On the other hand, if the support is broken, it could be a nice ride till 195. In either case, the price should get there sooner or later from what I see.

This one, EURGBP, is my favorite. Beautiful divergence on weekly !!

Nice pips to be had here. But beware, divergences can last for long time and it could be disastrous to commit to a position before getting confirmation of the move.

Now, the best for last, EURUSD. This particular pair has been source to much frustration for a lot of people and been analyzed to death. I am going to keep it simple.

Divergence on weekly and CCI just crossed the zero line. Take what you want from this. 

Remember to look at daliy and 4 hr charts first if you are going to take position based on these charts.  It will help to identify optimum entry/exits 

That’s it for now.

Good luck,

Kaustubh