GBPJPY - great opportunity

Alter about one week drifting Alligator got up and started eating whatever it found around his nose.
Once woke it took nearest Bullish fractal and formed immediately few more signals allowing to add more until accelerating.

As the Momentum shows this move was long enough and trader is not recommended to add more on the ground of Green Zone.

It seems to be time to collect profit and to look for the next opportunity.

At the moment it seems that the opportunity comes with a Bearish Divergent Bar. Perhaps movement turn doesn't looks like a high probability option but looking around we could find also other arguments supporting at least a consolidation of some sort.

One is seen as a Double Tops on the weekly chart below. This is one of the possible scenarios. Other is the power steamed so far to result in a break up...

We'll see. Important is to keep loses small and to lock the profit (Easier to say than to do!)

USDCAD New week (#21 - 21 May 2007)

USDCAD New week (#21 - 21 May 2007)

This pair continues its down move taking the subsequent Bearish fractal.
It also shows a good example of invalid Bullish Divergent Bar. One of the conditions DBar has to met is acute angle during its formation. Instead we see here two parallel lines.

This is also support by the Double Bottoms break on weekly chart.

New week (#21 - 21 May 2007) EURUSD

EURUSD is ranging from Thursday taking twice the bullish Divergent Bar and hitting once the same DBar's stop loss.
On 4 hours chart and Daily chart it formed Double bottoms failing to continue down move.

From this point of view it seems more probable to continue in up direction (supported my the positive Momentum and Acceleration), while moving forces muster strength.

If trader is on the long side - tighten the stop and keep in mind that market is in the Green Zone but in the same time there are two bearish fractals to be taken.

We've got additional Buy signal from the two consecutive green AC bars. Bullish Divergent Bar is supported by 3 green AO bars - signal to add to the long side.

EURUSD - Up or Down?

As fast the rally during 11-16 May was, the distance was covered back even faster and price with almost where it started.

This fast up and down move created a small puzzle for us - which way we have to chose? On the one hand we have bearish fractal and a retracement move on the daily chart where it does not seem to be at the end. Also the most recent Bearish Fractal has been easily taken.

On the other hand we have a Bullish Divergent Bar (tonight another one was formed) supported by upward acceleration and the inability even to touch the recent bottom. The strong down impulse that took the last Bearish Fractal seems to be already out of power.

If I decide to enter the market at all I'll follow this approach:

Will take the last signal as the most valid one and will place a buy stop order ( green line ) above the high of the DBar keeping a tight stop loss ( red line ).

Another sell stop loss will be placed below the lower Bearish Fractal again with a tight stop loss.

This way wherever the market takes on I'll be in.

Of course there is a risk market to enter a range and both orders to be opened and stop loss to be taken one after the other...

Well here is a point where no one tool could help, but your own mind. Before placing the orders trader must answer the question 'Am I ready to take this loss?'

GBPUSD Divergent Bar trade

This is a trade that was fired after yesterday GBP news - surprisingly for me, but fortunately profitable ;-) .


Bullish Divergent Bar was followed by a strong rally and side move ended into Bearish Divergent Bar.

These to many moves in opposite direction (result fractals are seen scattered around) make me to close the trade and to lock the profit.

For the moment there is a short term sell and a long term buy signals so appropriate stop order should be placed around to catch the move (if any).


On the daily chart is visible the possible break point if up move continue and an possible entry point is marked with a Bullish Fractal.

We'll see what the market has in mind next sessions...

GBPAUD Daily chart

Continuing observation of this move I've to notice that on daily chart price is forming double bottom (no yet finished).

There is probability this down move to break down the lowest fractal formed about 20 days ago forming the 5th (if counting is correct) Elliot wave.

Depends how strong the support around 2.38 level will be.


If break occurs another move down could be expected as seen on the monthly chart below:

While GBPUSD consolidates on Daily TimeFrame

There are few opportunity to take some profit until GBPUSD is consolidating on Daily base after the long trend (started Mar 5th). Taking in mind that move up could continue we could benefit from the side away movement using a lower time frame.

Let's take 4 hour chart as a sample:

Here is the end of the same channel visible on the daily chart.

We could find two Head and Shoulders formations close one after another. Each one has few Divergent Bars .

First is on Apr 27 just below the left Head. This DBar is taken fast and a rally of a bit less than 100 pips follows immediately. The Buy Stop order should be placed on 1.9934, just above the High of the bar. Trailing stop will kick up out somewhere above 2.00.

The next Dbar is again below the head offering another opportunity to collect some profit during the move from 1.9885 to 1.9970 (about 80 pips)

We have to take in mind the upper time frame - where there is probability of up continuation move on the channel break.