Weekly Trading Set-ups 3rd - 7th August 2020

Hi guys, happy Sunday. Hope you all had a good weekend. And of course, I'm not going to start this without talking about yesterday and how Arsenal became 14-time winners of the FA Cup, beating Chelsea. Um, so yeah, it's been a good weekend for me. I hope you have enjoyed it as much as I— as much as, uh, as possible. I was about to say as much as I have, but understandably for Chelsea fans, probably been quite a hard weekend. Uh, we'll have a quick look over the, the charts, uh, and as usual, guys, any, any questions that you have, just, you know, fire away and, uh, I'll be more than happy to, to go through those as and when. I mean, looking at, uh, just the, the euro here from, from last couple of weeks, insane move. However, you know, that certainly looking at that candle, how we finished Friday Uh, pretty, pretty key, you would say. Um, I'd almost be half tempted to look for a short, a little correction move, uh, in the euro. Let's just make this chart even smaller. And here we're going back to, you know, for whatever reason, you know, I haven't marked up that 24th of September high, uh, really because obviously it's quite far away. But you can see it hit that, rejected it, and we have come lower. So you can see Now the way people I think will be looking at, uh, things going into the new week, new month as well, is we've rejected one level, two levels, three levels, and also the high of the 27th of July, all taken off in one day. So pretty key there from, uh, the bears anyway of this, this currency pair. Maybe we're actually going to start to see a bit of a drift lower Um, now how would I go about that? I think obviously you're now looking to sort of just maneuver some of these, these lines to sort of get right on certain levels. And I'll be going about it doing this way. I mean, I'm just going to remove the ones down below because it's unlikely, of course, that we're going to get a massive move down there. And if it did, obviously just be aware of the highs from the 9th of March that we had, which would obviously be an area that people would, would be looking to get in again. So massive move lower, then just be aware of these two points here. Uh, however, obviously unlikely to get there. Um, so the two ways I'd almost be looking at, uh, this, this pair is you've got the, the opportunity to get long, and I would say if it gets back above this 118 handle on a daily close, that's, that's sort of saying, okay, the bears won Friday, but but now they've given up a bit, and actually maybe we start to push on to that yearly high again. However, if we do stay below this 118, uh, I wouldn't be too surprised to see us then come down to the 117 handle. And then obviously what happens at that point is, well, another decision has to be made. Do the, the buyers step in, or do we drip, drip back down towards the, the 23rd of July high And if that goes, well, this is when this area comes in a bit quicker. And, uh, yeah, that, that would be quite exciting. However, I think from your line in the sand, the 118 handle is, is going to be, it's going to be pretty useful to keep an eye on. The only thing you would say is obviously we've got non-farm payrolls on Friday, and now the sort of the earnings are done and, and whatnot, it might be that especially after a big move like you've seen here, we just drift sideways for a bit. So maybe not expecting fireworks just yet. You can see these moves are pretty similar. Maybe we just have to range a touch. I think we do push lower. I think on the week we're going to finish lower. Um, but that said, a daily close above 118, uh, on the futures, then I would, uh, be looking to sort of I guess, you know, redo my analysis and say, okay, you're wrong for now, and actually it looks like we could get another test of that high. So that's how I see the euro. Just before we go on to the pound, I think it's worth having a look at the, the weekly chart here, uh, as well. Actually, I'm gonna put that on a daily just to leave those levels for next week, and we'll go to— we'll go to the euro on the weekly, but just remove everything Uh, give me one second. Yes, you can see on the weekly, of course, yeah, up to level was not seen for, for quite some time. And, and, you know, sometimes you look back at these in, in, uh, in a few weeks, months' time, you think, God, was that the opportunity to get short this market? I think people will be thinking that. Uh, so we'll have to, we'll have to hold out and see how that goes. If we're having a look at the, uh, the chart since the beginning of time. Let's have a look to see if we can get any rough trend lines on. Look at that, look at that. I mean, that is— that could be— we could have seen the high for a while is, is how you need to get the focus. But also on the flip side, you can see how important that's going to be. You can really see, you know, if we were to get close Uh, up and above that trend line, multi-decade trend line, uh, what's to stop it going towards that 122 area? You know, these lows that we've got, you know, from, uh, February 18th. Big, big level to keep an eye on. So just bear that in mind going forward for the next couple of weeks. Uh, the pound, you can see, pushed on again, but came down a bit on on, on Friday, but had gone 1, 2, 3, 4, 5, 6, 7, 8, 9, 9 days to the upside. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 days to the upside. 132 will be an area of focus, uh, a good enough test of it. You have to say it's only 20 ticks away from, from sort of retesting that high that we had on the 6th of March, which would be basically a reverse of the coronavirus move that we saw where poundus dropped off the cliff. So how to go about this into the, the new week, uh, levels to the downside of course can still stay on. This boxed area, I'm just going to circle it, uh, circle it, shade it in. Now that for me is key. Keep a watch on that because if we do drift below the 130, that's when I think you're going to see this market come under a bit more pressure. What could be the cue for that? Could be some serious dollar strength in the euro and we drift lower, and then the pound does as well. Pullbacks would be welcome for sure. And this is another market where I'm just going to put it onto the weekly, uh, chart and again remove everything for you all. And then you're going to have people looking at the, the trend line here. So going back from the 2018 high, I mean, look at that, it's It's beyond perfect. And does it break? I, I, from a risk-reward point of view, I think you've got two very good opportunities here to go short on the euro and the pound. I expect, uh, weak red, red candles. I expect on the week, doing this next Sunday uh, it's gonna be— we're gonna have a few, a few days into the downside. And you can just see the importance of this. That said, we close a week above this and next thing you know it's 1.35, next thing you know it's what, it's 1.3750, 1.3760. And for the euro, you know, we've already gone through those levels. So yeah, if you like your longer time frames, and you can just see the importance of those in play there. So do do, do, do keep a watch on how we react around those previous highs, if we even get back to test them. Aussie dollar, uh, we had a level marked up, 72.15. Why did we have it marked up? Yeah, this, this resistance here from February, uh, and April last year, it's important. And you can just see that those lows I mean, just the way I'd be looking at these, these markets, these dollar pairs, is we're just coming to such key, key resistance. And you know, everyone's now talking about the dollar is dead. It's when everyone thinks that, and all the headlines are saying it, that you start to get people taking a bit of profit, and then we reverse. And then suddenly you get some good news out the US or some bad news out of Europe, or Australia or the UK, and things turn around and they come down quite quick. I'm, I'm bullish the US dollar this week is what I'm saying. I will be wrong in my opinion if we get back above 72.15. You can see there's a nice little, uh, well, not little, nice push you could get towards that next target. Where would that sort of line in the sand be where, you know, the buyers have to defend? For me it's this, this, this, this zone here. Obviously on the 21st of, uh, July, so 2 months ago, we really pushed higher. Be interesting to see what happens if we come back to test all of that. Uh, you'd argue similar to the euro— we quickly go back to the euro— that circled area in the euro is a point where the bulls will fancy going long. Here for the Aussie, let's make it a circle as well. It's going to be this point here, and as long as that holds you know, this, this pullback would be fine and just give up people opportunity to get in again. I think we get a test of that. I think we get a test of the euro one. And for the pound, let's just make a circle here for the similar sort of, uh, range. You know, I think we get a test of those in the coming weeks, if not, if not next week. That said, now what makes me slightly less confident on that is that I'm still, I'm still quite bullish US equities, and for them to go higher, the correlation we're seeing at the moment is the dollar is becoming weaker, that your currencies such as the pound and the Aussie are going higher. So it's something just to think about, uh, for, for the S&P and that correlation with equities, of course, and, and currencies, of course. Course, trade what you see, not what you think. And if— I mean, if the S&P was to get back below this area of support, then, then that's wrong, you know, and, uh, regardless of what currencies are doing. But on the flip side, if we get above this rectangle area, really sort of 3,300 handle, which was the, the low that we had back on the 10th of Feb, you might start to see the currencies actually find a bit of support, we push on. But I wouldn't change anything looking at this, um, for the equity markets. It's decision time has to be made above or below this little range that we're in. And I would fancy longs from all of these points below, or these two points below. If we come 3189 again, a close of the day below that, and also our moving average here, which is the 21-period then I think we would get these, these levels to come in. And then it's another decision time. A close of the day above the high that we had on the 23rd of July and the low of the 10th of Feb is key. Having a look at this on the weekly chart, uh, you can see how important it was where we closed. You can see here, if we just take away that last week— and obviously this is the month— you get Strong resist— uh, support turns to resistance and you get one rejection, two rejection, close above. It's the first close above. It's the highest actually, I believe. Let's put the month on. It's the highest the S&P has ever closed a month. Silence says it all. So yeah, going back to the S&P here on the, uh, the daily. Decision time, decision time here or below. So let's, let's hold out, see how it goes. The NASDAQ, um, I'm not, not going to change anything on this either really, other than, you know, just that double top on the all-time high. The trend channel's intact. The 21-day moving average, leave it on because it has been respected enough, but it's starting to get a bit messy. And, uh, let me just remove these couple of rectangles on here. I, I mean, looking at this, you know, it's, um, once we close below this area, you can see we pushed down, and then it's this previous all-time high in the trend channel. And that was a really good opportunity back on the 24th, uh, of July, which I believe was, yeah, Friday before we started the, the next week. That rejection led us to push higher. We now closed above this area. So that's your line in the sand for me. I would imagine we get an all-time high test again in the next couple of days, and then decision time. Do we reject it? Do we push higher? Let's hold out and see. For the Dow Jones, um, let's just remove everything because we couldn't cover it last week. So we'll start afresh. Um, obviously key, key area here. Got those lows from Jan and Feb we need to keep a watch on. They're still a fair whack away. Certainly looks like there's a decent enough trend line coming from the lows. A couple of failed tests there Thursday, Friday. That would have been interesting to see if we had closed below there and that the— maybe the S&P would have closed its week below. Good, good buying pressure coming in. Then you can see also the low from the 14th of July. So strong finish on Friday, I would say. Also back above the trend line. I'd expect that we get the, the double top from the 15th and the 23rd of July. I reckon that comes in. Um, where would it be wrong? A close of the day below, uh, Thursday and Friday's double bottom. Above there, obviously just keep a watch because you're likely to get get a nice move towards the 9th of June. Good week for equities, and it's, uh, it would be looking very nice because you likely had, you know, the S&P, you know, if we can close the week above 3,330, then it's all-time highs very shortly. The NASDAQ will be on all-time highs, and you may well start to get the Dow getting closer towards this January and February double bottom, which is massive. You'd expect a big challenge to get through that, uh, where the others might find it a bit easier. Well, the NASDAQ certainly did. The S&P, we haven't quite seen it just yet. Gold pushing on. That's a new, uh, new all-time high for, for gold, I believe. Yeah, we got that course and, um, didn't, you know, let's put it on the 60-minute just to see how it reacted around that point. Yeah, a bit of resistance, came down, then found a bit of support. It's, it's interesting. I was actually, uh, you know, looking just on Twitter yesterday and some people are saying we're, we're going to come a bit lower. And you know, the, the argument for that is dollar strength in, in the pairs at massive resistance levels. If the dollar starts strengthening, whether it just be because a bit of profit taking or whatever, the go, there's got to come lower. And I think, you know, looking at— looking how we finished Friday, you've got the 28th of July, then we couldn't close above it the 29th, couldn't close above it the 30th, had a go on Friday but we couldn't. You know, 4 days without getting above 1975. I think it's worth a little short. Again, risk reward's quite nice there. It might want to, you know, take 2000 out and then come, come come a bit lower. Uh, if you want to be a bit safer, then, you know, you could be looking at sort of 1936 and short below there, and then you just sort of take profit on, you know, these previous highs that turn to lows. 1900 hand obviously looks quite significant. Uh, targets to the upside, it depends how you really want to go about this. I'd say it's, uh, you know, if you're still long and it's a risk-free trade completely, then you are slightly happier, um, just to let it run anyway, aren't you? You know, if it's a longer-term trade, you know, the conditions are still quite nice for gold. I would just— I'm not gonna, you know, for the, the first 3 currencies we went through, I'm happy to put my neck on the line and say we come lower. For gold, you know, I think we could have a little pullback, but it's more like I'd say I'm 55% sure, uh, after everything fantastic run that it's been on. Oil, we said last week, didn't we, you know, if, uh, if it was a good enough weekend, it wouldn't technically be the worst idea to get long. It just never really, really went. And we had a, a break of that trend line, we had a break of support, and it just came down to $39, $38, $39. And I think the, the last few closes on the weeks, you can see, have been pretty much the same. So it's just not there at the moment for, for oil. Um, I actually had traded to the short side on the, the Thursday, um, quite poorly actually. You think, well, it went down all that way. Yes, it did. I just came out way too early on that, way too early. However, we've, uh, we've rebounded since Thursday's low, and you can just see here, looking at 60-minute, it never really threatened again that low. So looking on the day, I mean, looking at this, uh, having looked at 1, 2, 3, 4, 5, 6, 7 other markets, it's not appealing, is it really, looking at oil. So maybe a bigger move to come, uh, you know, the way oil can, you know, spring to life is, is certainly, you know, worth looking at, uh It just doesn't look like there's much gonna happen until we break out this, this horrible little range that we've been in. You know, the trendline breaks if we come here, you know, horrible. And yeah, I don't know, even if we break $38, $39, then you've got a lot of support. It just hasn't really done anything since 19th of June. I'd be interested to know what you guys think about oil. I'm still, you know, I still think we do go higher overall. Um, but maybe, you know, the dollar strength side of things would perhaps postpone that a bit. I'm not in an oil trade, uh, however, I would like to have another go at a long $43.43 above there towards, you know, the $50 handle. More importantly, the, the 3rd of March high, which is $48.58. But we'll have to hold out and see. Silver, that finish is not good, is it? Look at that, what a finish on the week. I mean, the more just looking at these charts, the more I'm, I'm really developing this dollar strength bias for the week. Yeah, I mean, the 4, you know, 2 rejections of, of the high that you've got from August 13th. Look at that, I mean test, come back. I mean, you know, the way to obviously to then go about this looking on the daily chart is, you know, it's gappy of course, but, uh, let's put on the day. Yeah, it's a bit cleaner. You, you'd say that the bulls are happy as long as it stays above the low that we had on the 23rd and the 28th— what candle that is. And, uh, if you want to be safe and not short right away, then underneath 22.45 is, is the place for that. I, I mean, just from having a look at these charts, I'm going to be really interested to listen to Anthony's briefing tomorrow, but I'm getting a dollar strength vibe, which is annoying because how is that going to impact the equity markets? We'll see. DAX, look at that, look at that break of the trend, break of a massive area of support, and a big push lower. Also, this, this close below these lows is not nice. I know the FTSE had a a poor week as well. Had a little go, uh, maybe a couple weeks ago on the FTSE, just trying to get in. Didn't happen, didn't work, didn't really, uh, go for the bite. Um, DAX, it'd be interesting to see if we can come back down to the 12,000 handle because that's the way it's looking like. On the flip side, you know, how to get in along here, you know, if we get this rectangular area you know, this is now in control of the sellers. So daily close back above here, you know, is something to, you know, to be aware of. And especially if you get risk on, you know, this zone becomes opportunity for buyers to come in. However, you know, I would, uh, well, you only, you would only get in that, of course, if it closes the day above. So I think that's a safe way to go about looking for longs. Likelihood is 12,000 comes in just way we finished the day and the week. Anyway guys, hope you all had a good time watching that and also enjoyed the lecture— lecture? The webinar Anthony Cheung, Alex Cheung, and myself did. That was uploaded yesterday. I'll drop the link below. But yeah, I hope you all have a good week ahead, a good month ahead, and I'll catch you all next Sunday.