Short signal (breakout signal)

Written by Raul Lopez on . Posted in Trades & Analysis. 9 Comments

GBP and AUD flags

You know, there are periods of instability, periods in which its very complicated to trade, or to find low risk trade opportunities…

There is no doubt about it!

But there are also periods, in which trading seems so easy… we just need to find them.

For instance, one of the currency pairs that I’ve been trading lately is the GBPAUD.

Take a look at its long term chart:

GBPAUD Daily

In the chart above its quite simple to trade, once the market gets rejected from an important resistance level I start looking for short opportunities, and when it gets rejected from the support level I start looking for long opportunities.

That simple. There is no need of complex technical indicators or tools. Just price action.

Ok, now to today’s signal.

EURNZD Analysis

As most of you already know, the EURNZD is trading in a very clear bearish condition, and here is why:

EURNZD 1D

It’s clear that the market already broke through an important support level and now it is likely to continue its way down, at least until it reaches its next LT support level which is at 1.5259.

Now, lets take a look at the short term charts:

EURNZD 1H

It has been already rejected from the bottom of the range twice, so I’m going to use a stop entry order to go short.

Entry stop sell order: 1.5554
SL: 1.5605
TP: 1.5270

Your turn

What do you think about my signal? Are you going to take it?

What other pairs are you currently monitoring?

Share your thoughts

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Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .
  • Ahsun Ashfaq

    Hey Raul nice insights :) and yup those 2 pairs are most clear to trade. I decided not to trade for today too many economic news out for today. As a day trader they are definitely going to kick me hahaha :D

  • Eric Aroh

    Raul,

    Excellent trading potential, which I will participate in later. I am watching this pair as well as GBPAUD (for another try at BUY).

    My other comments:

    The EURNZD 1D chart provides two (2) channels: sideways, bounded by S&R levels (@1.5806 and 1.6209 respectively); the 1.5806 LT support is broken and price action heading south. The second channel is trending downwards with the lower boundary line of the down-trending channel providing quite some support. Price action is also trending south. These two disparate channels confirm the downtrend.

    I will wait till the following conditions are fulfilled:

    (1) consolidation is completed (looking at the H1 chart), such that the double head chart pattern may be progressed, and

    (2) the potential downtrend price action breaks through the lower
    boundary-line of the down-trending channel.

    I will set my entry point 20 pips below current H1 support (1.5571); this is just 3 pips different from what you indicated. These extra 3 pips will accommodate the slope of the down-trending channel to ensure that price action truly breaks through.

    This setup provides the potential of trading breakouts from the foregoing perspective.

    Warm Regards,

    Eric

    • Raul Lopez

      Hey Eric, thank you for your thoughtful comment… and I appreciate your analysis and that you shared your trading scenarios…

      I agree with both of them!

      Both the EURNZD and GBPAUD are trading in very clear market conditions.

      Good luck Eric! And as always, your comments always add to the conversation, I’m pretty sure other traders also benefit form them!

      Thanks!

  • Said

    Hi Raul,
    First, Thanks for the signal information. My Analysis to EURNZD confirms the Downtrend and I could suggest to look for a Sell Signal at 1.572-1.5734.

    • Raul Lopez

      Ok… thx

  • Waqas Khan

    what do you think about harmonic and geometric patterns?

    • Raul Lopez

      I’m not very keen about using those pattern Waqas… Just price action… That’s the only way I’ve been to get consistent results (after more than 11 years)…

      Good luck!

  • tp

    I am going to join you, Raul. You know ! :)

    • Raul Lopez

      Good luck to us then!

      Cheers

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