Forecasting Trends: USDJPY Weekly Cycles

You know what I love about the Forex… that it’s a 24hr market, but I’m sure glad it isn’t 7 days per week. A few days to switch off is always refreshing.

Just a short note… today I got 21 cycle samples from the weekly chart of the USDJPY. 

Although I have data going back as far as 1990, I instead started from the beginning of the last full 55 month cycle (our largest monthly cycle) – which is April 2004.

This gives over 6 years worth of weekly data.  More than enough data, and the quality is more relevant too.

I started picking out the nice clear lows that fell rhythmically. These are the figures;

Read more

Parity for the Aussie Dollar and the Greenback… where to next?

Interestingly, last week the Aussie dollar made history, but only for a brief 5 minute stint, making a new all time high reaching parity with the Greenback before recoiling back down to lower levels.

We mentioned a few days ago we had a suspicion the week would finish up with some sort of reversal bar – like a hanging man or a Doji.

Now that the week has finally finished the AUDUSD had formed as Doji reversal bar, just like the July 2008 high.

This signals there is a high probability we will see some selling over the next couple of weeks. Remember this bar alone is not enough to signal a short entry for this market. Although through detailed investigation you are likely to find some markets that have signature traits where they turn like clockwork on a particular formation.

On the AUDUSD, not only is there pressure from the old 2008 July high at 0.9849 but the parity at 1.000 is a massive psychological resistance level that will undoubtedly have the sellers dominating the arena for the short term at least.

So how far could we expect the Aussie dollar to fall?

Read more

Forecasting Trends: Time & Price ending for the USDJPY

Hey traders!

Hoping you’ve had a productive week, with many successful trades.

We are almost finished with the longer term monthly cycles on the USDJPY.

Now we need to ‘project’ or forecast forward, the two monthly cycles we have found; the longer term 55 month and the smaller 10 month.

 To do this we find the last confirmed low for each cycle….

Within one of the charting software packages I use, it has a Cycle Zone tool which is very handy and makes applying your cycles so much easier. When I originally learned about cycles I was taught to painstakingly hand chart, counting each bar by bar, drawing cycle bands in with a pencil and ruler (software was available then, but my teacher insisted it was the best way to learn). I must say though, it certainly ingrained the information into my subconscious.

Read more

AUDUSD – The ‘Hanging Man’ and Trend Confirmation

The other day John briefly blogged about the current market action of the AUDUSD and USDCHF… both hovering at significant support and resistance levels, potentially about to make a ‘double top and bottom’. 

The USDCHF is nudging its way through the old low – but either way, if you are looking to short or buy this market it is better to wait for confirmation, don’t try to jump the gun too early.

The psychology of both these markets at the moment is extreme caution – both markets have barely moved over the last few days in anticipation of what could possibly happen next.

I want to bring your attention to the AUDUSD Weekly chart.

Now it’s still only just past midweek, but look what could be forming…

Read more

Forecasting Trends: USDJPY Long Term Cycles… continued

Hiya all,

For the last week we have been looking at how to apply Cycle Analysis to the USDJPY monthly chart. Our goal is being able to forecast high probability turning points, and jump in on new trends early.

We found the very long term dominate 55 month cycle.

And now here again is the USDJPY monthly, and you can see things are starting to look busy!

I have now gone and identified all the minor lows on the monthly chart, always keeping in mind to look for a pattern of similar numbers of bars apart, ensuring that the lows are ‘valid’.

Validating Lows…

Lows are bars that have bars either side with “higher lows”.  Of course we arent going to pick out every single fluctuation or dip, but we are looking for a reasonable pull back. 

Majority of the time the lows stand out like a sore thumb, but other times when the markets are quite volatile and ranging it can be a little harder to do.

Read more