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Strategy Contest – June 2020 - Article

I will try to explain in this article the underlying theory related to the overbought and oversold strategies. This is the strategy used by my contest strategy.
Charles Dow (considered the father of technical analysis) had noticed that any asset prices series experienced recurring cycles indefinitely. He noted three different phases related to price movements, whether in a bull or bear market.
In a bull market, we have:
The Phase 1: The Accumulation Phase
The first phase of a bull market is …
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AUDUSD DOWN TREND NEXT MONTH

On H4 chart, the instrument could not consolidate above the strong resistance level of 0.7443. Bollinger Bands reverse upwards, and the price range expanded, which indicates the continuation of the uptrend. MACD histogram is in the positive zone with its volumes growing and keeping the buy signal. Stochastic left the overbought area having formed the sell signal.
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EUR/GBP Overbought on Larger Timeframes

The EUR/GBP is overbought on the larger timeframes. The pair had a +600 pips rally since April of this year and +2,000 pips rally since the lows hit in 2015.
For a mostly range-bound pair this is too much. Technical indicators seem to confirm this view. The Stochastic Oscillator on the weekly hart is showing a value over 80, indicating overbought market sentiment.
Our final chart below shows that things aren't looking rosy for the bulls on the shorter-term charts either. Here we see the EUR/GBP …
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EURo Nearing Cluster of Previous Resistance Levels

The Euro is slowly becoming overbought. Look at the weekly chart below. We are already trading past the 80 level on the Stochastic Oscillator, a level which signifies an overbought market condition. But that on it's own shouldn't be traded upon.
Exhibit number two is the second picture below. We are nearing a cluster of previous resistance levels, starting from this month's high at 1.1268 to the 1.1302 spike on Trump election day. Higher up more levels can be found at 1.1370, 1.1428 and of cours…
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GBP/USD For July 3

WEEKLY CHART:

EMA (5, 30, 60) - Moving UP
William % r - over brought condition
Support and resistance
MONTHLY CHART :

Ema (5, 30, 60)- Moving UP
William % r - over sold condition
Support and resistance
According to William %R over brought condition in weekly chart and , over sold condition in monthly which indicates it going up , it confirms the same.
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EUR/AUD for 1st JUNE

WEEKLY CHART:
Stochastic -over BUY condition
ema (5,30,90)- range bounding
support and resistance
pivot points
MONTHLY CHART:
Stochastic -over SOLD condition
ema (5,30,90)- range bounding
support and resistance
pivot points
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Alyona18 avatar
Alyona18 30 Kwi

Great

williamb avatar

good  analysis

NikaTigra avatar

удачи

LizaQ avatar
LizaQ 2 Maj

Great

Ruteale avatar
Ruteale 4 Maj

good

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Gains in EUR/TRY Fizzle Out

The gains in the EUR/TRY during January are being eaten away in February. We're now quoted at 3.8541, barely above this year's open for this currency pair. This shows that the bull trend has been broken.
Exhibit number two is the lower time-frame chart below. Here we see that prices are indecisive , with large swings. While in the pic above we had gains erased by downtrend, here we see losses erased by uptrend.
In conclusion, this year neither the bulls nor the bears can steer this currency pair…
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fxsurprise8 avatar

UPDATE 1: The EUR/TRY is trading at 3.9248 right now, around 1.8 percent away from my forecasted price.

Initially the pair acted according to my expectations. From March 1st to March 17th we've been trading mostly range-bound, although with a slight bullish bias. Since then however the pair started moving back up as the Euro is being bought up across the board on risk aversion.

Still looking at the daily chart, you couldn't tell this is a trend. We're well within the bound of last month's trading range for example.And February was within the bound of January's trading range. Ranges prevail!

fxsurprise8 avatar

UPDATE 2: We're now quoted at 3.8996 in this pair and slowly drifting toward my forecasted price of 3.8531. The past three days saw some mixed price action, as you can expect in this pair.

First the EUR/TRY rallied to a high of 3.9644, only to get sold to low of 3.8825 in the next two days. We are currently trading at 3.8996 like we said above, closer to the lows then the highs.

Seems that my previous update called it right. While prices were moving up, it didn't look like much of a trend to me. And now we're seeing the pair reverse those tentative gains.

fxsurprise8 avatar

UPDATE 3: The EUR/TRY continues the slow drift toward my 3.8531 target. We're now trading at 3.8705, only 0.45% away from my forecasted price.

More of the same seems likely here as the momentum is still down. We should see the pair continue to drift lower and hopefully settle at a better price for me on Monday.

Overall mean-reversion was king in the EUR/TRY this month as well. We opened at 3.8544, then rallied to a high of 4.0148 only to sell off to 3.8668 today. Volatile swings with no decisive outcome.

fxsurprise8 avatar

UPDATE 4: This for another update and this time we will add a chart. This picture shows the price action for EUR/TRY during March.

Overall mean-reversion was king in the EUR/TRY this month as well. We opened at 3.8544, then rallied to a high of 4.0148 only to sell off to 3.8668 today.

fxsurprise8 avatar

UPDATE 5: The EUR/TRY opened the new week at 3.8683, a bit closer to my forecasted price at 3.8531.

Unfortunately in the next few hours of the Asian session the move lower fizzled out and we're currently quoted at 3.8733.

This is little changed compared to the close on Friday, so we'll have to wait and see what happens on Monday in the last few hours of the contest!

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AUDCHF may travel in the symmetrical triangle

Technical Tools
Resistance and support lines, Trend lines, Price action, Candlestick Pattern, MACD, RSI, Simple Moving Average and Stochastic Fast Indicator, Ellipse.
AUDCHF Weekly Chart
  • The MACD on the weekly chart is in positive territory. The histogram is flat.
  • The RSI is rising.
  • The Stochastics is headed North.
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AUDCAD may resume its downtrend

Technical Tools
Resistance and support lines, Trend lines, Price action, Candlestick Pattern, MACD, RSI, Simple Moving Average and Stochastic Fast Indicator, Ellipse.
AUDCAD Weekly Chart
  • The MACD on the weekly chart is in negative zone. The histogram suggests the buyers taking control of the market.
  • The RSI is rising.
  • The Stochastics is also rising.
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EUR/JPY Overbought on Multiple Timeframes

The EUR/JPY is overbought on most time-frames. The first picture below shows a daily chart. Notice how the Stochastic Oscillator traded above the 80 line and is now coming down. This is a classic overbought signal followed by a confirmation, the moving down back below the 80 line.
Exhibit number two shows us the situation on the 4 Hour chart. Here too the pair is flashing an overbought signal. The Stoch is printing a value of 91 right now. The pair is stretched to extreme levels.
Our final chart…
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fxsurprise8 avatar

So far so good! After a long post-election rally the EUR/JPY has traded mostly range-bound during December. Looks like all those overbought signals are finally having an effect.

The high to low range is now at 539 pips, with a high at 124.09 and a low at 118.70. But most important, the open to close range is tiny at only 48 pips.

We are currently quoted at 122.01 in the EUR/JPY, only 94 pips or 0.77 percent above my forecasted price. Here's to hoping for a small drop into month-end!

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