As if we didn't know, there's some serious indecision going on around the 230 level for GBPJPY. While this candle is still open for 2 more days and thus, can still change, it is something worth watching...

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This pair seems to produce patterns like an ATM spits out cash. Some of the patterns have been really good for medium and short-term trades. On the other hand, the high volatility in GBPJPY has led to some incredible wicks going back for some time. Recently, volatility has been off the charts and the pair seems to be making its own version of a 'range' (which is huge). I don't think I can fit these kind of conditions into my money management rules. Are you thinking about placing a trade on formation? And what would your stop be? If you go for this trade, you have ice in your veins.

As a second followup, I just published a special report on why I think Morning Star and Evening star formations are useful in currency trading pairs:

http://www.dailyfx.com/story/tophead...160706372.html

hi all David i have read your article .i think you find direction healthy for analysis candlestick but no with tool fit for this direction,for example if you want travel from usa to Europe ,must choice several selection as airplane or ship or boat ,but i see you chioce slower selection also you must have attention to candlestick chart ,my consideration is for example feriodcity of time H1 MIG or FXCM or dbfx have distinction each other and i have attached for sample see to shadow and body, of course im happy that you have point of view correct to candlestick but you are taking step to world of candlestick.welcome to you

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As an indicator of indecision, I take it as a huge signal to stay out...if the market-at-large isn't sure where the pair is going next, I'm not going to pretend I know better. For now, I will only venture into GBPJPY positions on a short-term basis, but I'd reconsider upon a break below the neckline of the head-and-shoulders formation on the daily/weekly charts. Nevertheless, my bias remains to the downside long-term - I'm just not prepared to bet money on it...yet

The GBPUSD closed its weekly candle with an ominous evening star formation. I've posted the last couple examples in which this occurred. Needless to say, it is a fairly bearish sign for the GBP.

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Needless to say, I should probably post the most recent example of the evening star--the past three weeks.

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Terri Belkas, thank you very much for your kind help. It helps much.


puka puka

Volatility today has produced some interesting candlestick formations in the majors. One of the more significant candles comes on the part of EURUSD. This massive, green candle is a kicking move that comes after a symmetrical wedge. However, a 160 point candle at these heights could quickly turn into an exhaustion move; so I'll remain cautiously bullish on the sidelines.

GPBUSD is another interesting pair. Looking back, last Friday's candle was actually a hammer; so we had the foundation for a rebound. Now with a wide-body, bullish engulfing candle; the upside momentum looks a lot stronger than I had initially thought. Now it rests on the Thanksgiving liquidity effect. If the market acts like it did last year, we could see momentum build with volatility. But if its like 2004 and 2005, the upside momentum could die into the second half of the week and allow the bears time to regroup for next week. I'm still long term bullish on this pair, with a stop entry short below 2.0250 to jump on the eventual turn.

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I haven't really looked at an Aussie chart in a while (let alone a monthly!) as GBPUSD and GBPJPY have had my attention lately. Check out this month's bearish engulfing candle...I think we could gradually see AUDUSD fall down towards trendline and fib support near 0.8300.

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The AUDUSD is also showing that it has broken below the neckline of a recent head&shoulders formation. Things look to worsen for the Aussie.

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Looks like EUR/USD has formed a very nice candlesticks formation. I will sell the pair as soon as the market opens on Monday my time. 00:52EDT


At a closer look I found that buying USD/CHF also seems to be good! 07:18 EDT


Shorted EUR/USD at 4821, sl 4901, lmt 4708. Hope good luck for me. 17:30 EDT

I closed my position with 48pips losses...and bought the pair at 4867, stl 4835, lmt 5001.
Hope good luck for me... 03:00EDT

Closed the position again, and sold the pair at 4854, stl 4888, lmt 4712...what a busy day...03:10EDT


puka puka

Are you working off the daily doji from Friday with the large upper wick? I was looking at that this weekend; but I'm skeptical of its accuracy in the formation the pair is laying out. I would have preferred it if the doji had come just after a big up-day.

I'm going to hold a conservative long bias for now, but I'm not looking to get long just yet. At the same time, I have a short stop entry order at 1.4765 to see if that rising trendline can fail while I'm at the computer. May take it off if the move hasn't happened and put it back on in the morning. Although, by that time, the move will likely have already happened. We'll see.

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Closed this position and bought the pair again at 4872, sl 4824, lt 5001.

I have confirmed the uptrend on horly and 4-hour charts.

I don't know as I cannot access IFR news, but from my experience there must reside the strong option barrier at 5000. So the rate shall penetrate the level eventually...I will hold this position until that time.

And you are right. I should have sold the pair if the doji had come just after a big up-day. I have to admit I was too speculative. 23:06EDT


puka puka

Did you move your stop up to breakeven on this position puka puka? I'm considering setting myself up for a stop entry short order for EURUSD below 1.4800 (perhaps 1.4775). The risk seems limited on such a move, but I'm also cautious of a lack of dollar momentum at these levels. It would be promising for bears if we could get a wide bodied red candle on the daily chart to clear out all this congestion, the rising trend and horizontal support in the area.