Conflicting Wolfe Waves - EURUSD

Elated by my success in accurately figuring out the EURUSD hitting 1.28 way back in late Februray, I did a bit of a Wolfe Wave analysis on the 1 hour chart for the EURUSD.

As you can see the price projections seem to run contrary to the prevailing fundamental factors in the Eurozone. Furthermore, the ETA projection also seems quite close, March 20th.

Times like these puts the entire trading system to test. As a precaution, I also included the Volumes to check if they satisfy the Wolfe wave conditions, which is, key pivot points usually see high volumes. The Blue vertical lines reflect just that, with the only exception of pivot 3 where volume is a bit subdued compared to the rest of the key levels.

Either ways, not to miss out on this, i'm long on a micro lot of 0.01, just to see how this will play out. Stops are a bit tight at 1.28130.

In the event price fails to reverse, i'm looking at a further drop to 1.27 region. In the picture below, the highlighted triangle shows the possible region where Wave 5 will end before we start riding it.

AUDUSD - Wolfe Wave Formation

Its been a while since I posted a new trade. Here we see the AUDUSD 4 hour chart and the formation of a Wolfe wave. Its still in the early stages so there is a good wave to ride.

I have placed a sell order at 1.03060 with take profit at 1.02034 and stop loss at 1.03335 (the point of wave 5). All in all, this trade looks to be quite interesting, given that the potential profit to be made is 1026 pips with risk at 275 pips.

I'm expecting this trade to close around the 17th of March.

EURJPY - A Cautious Approach

The EURJPY Daily and H4 charts shows two Wolfe Wave Patterns, and both contradictory to each other. While the H4 Wolfe Wave pattern shows an upward bullish bias, the Daily chart shows a bearish bias.

The extremities in price shows a possible rally to the 126 price region on the four hour chart while the Daily chart shows a target price around the 98 price region.

So how do we trade such kind of a set up?

The first place to look for is to understand what the Schaff Trend Cycle is telling us.

EURJPY - H4 Chart Shows a Bull Run

On the H4 chart we see a bullish bias formed on the Schaff Trend while the Daily chart shows a bearish bias. One way to interpret this is to assume that price would rally a bit more before turning bearish. From the H4 chart, we see that after price dropped to the 38.2% Fibonacci level, price managed to rally all the way to the 61.8% region. Given that both Wolfe Waves and Schaff Trend analysis are inconclusive, we will have to look to the Fibonacci levels to give a sense of direction.

EURJPY Daily Chart shows a bearish formation

One would assume that price is currently retracing and we can expect to see a bearish rally that could possibly breach the 38.2% level and head to the 23.6% region of 116.883.

From a fundamental perspective, the week ahead is packed with economic events for both the EUR and JPY currencies, starting Monday when we will see economic data from Europe, starting with the Spanish unemployment report along with Thursday when we will have the BoJ's monetary policy statement.

A risky trade would be to wait until H4 Schaff Trend shows a bearish biash and the Daily chart is still bearish. However, this trade would have to be taken with caution because we have the 120.622 as a strong level of support, hinting at a ranging price.

Taking all the above into consideration, it would be sensible to stay off this pair for the moment until a proper direction is formed.

Wolfe Wave Trade Set ups - 3rd March

GBPCHF - H4 Chart, Potential LONG

The 4 hour GBPCHF chart has a wolfe wave already formed. A confirmation can be taken from the sharp change in Schaff Trend Cycle, at Wave 5. However, the Fibonacci Level of 76.4% or 1.42104 was tested and proved to be a strong resistance. A breach of this level will see price heading to 1.42925.

An ideal trade set up would be to wait for a breach of the 76.4% level, preferably a candle opening above this level with stop placed at 1.40926 and take profit at 1.42925.

In terms of risk to reward, this is a risky trade, but the price is likely to be hit. With a bit of caution and monitoring the chart in real time could help in placing a more conservative stop loss.

On the H1 chart, we see another target being formed at 1.42016. A breach above this level should give us the confirmation to go long. Also bear in mind that the Shcaff Trend Cycles for both H1 and H4 are still bearish, so we will wait until the cycle turns bullish.

CHFJPY - Daily Chart, Potential SHORT

The daily chart shows us a wolfe wave being formed along with the Schaff trend cycle confirming a reversal. The potential target for this trade could well be the 91.498, along with the possibility of price further heading down to 89.632.

If we check on shorter time frames, we notice the H1, H4 still showing a bullish bias on the Schaff Trend cycle. Waiting for a bearish turn of the cycle will provide an ideal entry point, which is likely to be between 50% and 38.2% regions.

A stop loss at 101.859 looks safe.

EURCHF, H4 Wolfe Wave Set up

It looks like the CHF pairs are doing quite good in terms of Wolfe Wave patterns. Here is a 4-Hour chart on the EURCHF, which shows a nice uptrending move. So we go for a BUY order.

Entry: I'm sure you have missed the 23.6% Fib level entry @ 1.21968. But fret not, wait for the 38.2% entry @ 1.22678
TP: 1.23251
SL: Either 1.22436 or to be more safe (but more wide), 1.21968

GBPCHF - H4 Chart, 28th Feb

Another potentially good trade is shaping up on the GBPCHF 4 hour chart. Below is the chart with Wolfe Wave, Schaff Trend and also Fibs. I use Fibs mostly to get a perspective of price especially when Wolfe Waves project prices into the future.

What gives me confirmation is from the daily chart, which is showing a potential end of a downtrend for this pair. Refer to the chart below to see what I mean.

Long @ 1.41842
TP: 1.43620 (61.8% Fib)
SL: 1.40926

Risk: 916 Pips
Reward: 1778 Pips

Reason for getting into this trade again is the positive swaps. Call me crazy but I don't like giving away money for free to the markets.. or my broker for that matter!