Category Archives: 60 minutes charts

GBPCHF 60 minute – Double Tap

By Ben from Coghlan Capital.com

I wanted to take a quick look at this pair to give an example of how the methodology that we employ could be used by a trader to take a high probability, low risk long on a 60 minute timeframe.

At the heart of the analysis is early recognition and definition of the all-important path of price of a vehicle. We look for evidence of a change of trend across all timeframes and in this case both the Daily and the 240 minute were showing price finding potential areas of support and the possibility of a leg to the upside. Such a move will obviously show on a 60 minute chart before it shows on a 240 minute one or on a Daily. Given this, we started to look for pivots for our pitchfork in order to correctly show the possible line of ascent of the pair.

GBPCHF-60-chart1

Chart 1 shows the very obvious A, B and C pivots and the pitchfork we are using is a variation known as a Schiff (or unmodified Schiff). Note that the A is at the low of the spike in early June – it is pure coincidence that the origin of the fork appears to be at the high of it…… The Schiff is drawn by moving the point of origin 50% of the distance from the A to the B in price but not in time. It is a move along the vertical axis only.

Having drawn the fork, we need to validate it ie to establish whether price is indeed moving in the same angle as the lines we have superimposed on it. We do this by looking for price action along the lines of the fork. This is not necessarily along the Upper or Lower Parallel, the Median Line or the Quartiles, we are looking for activity in the angle of the fork.

On this occasion there is action along the existing lines – there is resistance along the upper Quartile as shown in the green circles and there is both support and resistance along the Median Line in the series of red circles. We can be pretty certain that we have successfully defined the angle of ascent or the path of price by means of the pitchfork that we have drawn.

Note how support in the third red circle turns into resistance in the fourth – as on the horizontal when support becomes resistance we view this as a portend of bearish behaviour. Indeed price did fall from the Median Line resistance, finding a few bars of support at the lower Quartile before arriving at the Lower Parallel.

Note that at this point, in the area of the first red arrow, that we did not know whether or not we would find support at this line. It had not been tested before but the methodology raises the likelihood of this being a line of support and it is certainly an area that we would be watching closely. Because of this uncertainty we would not just “buy the line” until support had been proven and until we had a prior low beneath which to place our stop. The fact that price bounced some forty points from this first touch before returning to test the line again was what we would be looking for.

The second red arrow shows price back at the Lower Parallel for two bars – a long taken here at 1.5213 could have been protected by a stop beneath the low of the bar at the first red arrow at 1.5210. Our target would initially be the Quartile at 1.5277 (this was prior support and would be a likely place to encounter resistance) easily encompassing most risk/reward criteria.

What in fact happened was that price spiked straight through the Quartile and most traders would be following this action and probably allowing their trades to run. As I write this we have pushed higher to the blue dotted Sliding Parallel at 1.5325 and I will continue to monitor this potential line of resistance to see if price turns back from here or whether it continues higher.

I hope I have shown that the early recognition and mapping of the path of price by means of a pitchfork will allow traders to look for high probability areas of support and resistance and enable them to take low risk trades in the vehicle of their choice.

The Cross Pair Analysis service looks to cover a dozen+ non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

The following link takes you to a recording of the webinar dated July 9th :
http://www.coghlancapital.com/node/9300

CADCHF 240 and 60 minutes – An Update

I wanted to have another look at this pair which I first presented here in early May. The methodology that we use seeks to identify the path of price at an early stage and then to delineate or define it by means of a pitchfork. It is not the pitchfork itself that is important but the angle ascent or descent that it follows. By matching price to this angle we can then monitor the strengthening or weakening of trend as it progresses.

cadchf-2-240-chart1

We last looked at this pair in the area of the puce circle in Chart 1. We had been following as price rose from the puce Sliding Parallel following the series of touches in the green circles and had noted the constant line of resistance as shown by the higher puce Sliding Parallel. The validation given by the price action along these lines was sufficient for us to continue to follow it. Note how price moved strongly higher from the last green circle running into resistance at the higher puce Sliding Parallel and then falling back to find support along the grey horizontal.

Although we spend the majority of our analysis looking at movements in the angle of our pitchfork we are not immune to what happens along the horizontal. Here the fact that resistance later became support was noticed and deemed to be bullish. From this support price moved higher again before running into resistance once more along the same puce Sliding Parallel. Note how we are following support stepping up in the angle of the fork – from the line of green circles, to the arrowed blue Sliding Parallel beneath the Median Line and now to a higher arrowed Sliding Parallel shown in green. It is normal to expect resistance to be put under pressure when we see support stepping up and members of the Cross Pair Analysis service have been aware of this and watching these moves unfold.

We are looking to see if there is enough upside pressure to push through the puce Sliding Parallel that has acted as resistance since early April. It is less the breach of this line itself that is important but more where we find support on any retracement. If, for example, price pushed above the line and came back to test it from above and found support along it that would be a bullish indicator and would have us looking to challenge the higher line of the Upper Parallel that had been resistance once before.

cadchf-2-60-chart2

One feature of the Cross Pair Analysis is that we look at vehicles across various timeframes. Chart 2 shows the same pair on a 60 minute basis and Chart 3 shows the same vehicle in more detail. Note how once more we use a distinct A, B and C to draw our pitchfork – this time it is a variant known as a Schiff or Unmodified Schiff. Here the origin of the fork is moved 50% in price from the A pivot to the B pivot.

Chat 3 shows the validation that we found on this fork – the series of red circles denoting the activity that we saw along the Median Line of the fork and which told us that we had correctly defined the path of price. Note how we use the same techniques to mark a strengthening of trend along the path of price. Resistance in mid-June along the quartile of the fork moved higher to the Sliding Parallel just under the Upper Parallel and support along the Median Line also moved up to the Sliding Parallel denoted by the up facing red arrows. (Note incidentally that when this puce Sliding Parallel support briefly breached that support was found along the Median Line once more…)

cadchf-2-60-chart3

In the last day or so the puce Sliding Parallel resistance has been breached to the upside and we have seen price come back and start to establish support along this same line. We potentially have a bullish higher channel forming with the puce Sliding Parallel as new support and a higher green Sliding Parallel as resistance. We will continue to monitor this chart and use the shorter timeframe as a “canary in the ine” for our longer timeframe 240 minute chart.

The Cross Pair Analysis service looks  to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch here:
http://www.coghlancapital.com/node/8759

I will be hosting another free webinar on Wednesday 9th July – registration is available at this link:
http://www.coghlancapital.com/node/9207

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

EURAUD 60 minute – Starting to Trend

Median Line Analysis using pitchforks seeks to identify and define trend at an early stage so that analysts and traders can then follow the strengthening and weakening of price over time. By determining the path of price we are able to anticipate likely areas of support and resistance with great accuracy.

Chart 1:

euraud-60-chart1

In this instance we are following the EURAUD on a 60 minute timeframe and looking at it in the light of the context that our larger charts were giving us. In terms of the bigger picture we were in an area of potential support so honed in on this 60 minute timeframe in order to look for evidence of a change of behaviour.

We were watching the resistance provided by the lines of the red fork. Note that there are two lines marked by a series of red circles – we followed as the resistance provided by the lower of these lines turned into support and then again as the same happened along the higher of the two lines. Price was effectively “stepping up” in the line of the fork – a bullish sign as resistance turned in to support. The process continued along the dashed red quartile as shown by the blue circles eventually moving through the highest line of resistance in the red fork.

Given this change of behaviour we looked to see if we could draw a pitchfork to define the new move. Using the distinct A, B and C pivots we looked to see if the new blue fork could be validated by the action along its angles. The first indication that it was working came from the touches along the handle, indicating that the angle of ascent was indeed worth following. Note also the resistance along the puce Sliding Parallel –  remember that it is not the lines of the pitchfork itself that are important, rather it is the angle in which it is drawn.

Price retraced from this anticipated resistance and moved all the way back t the Lower Parallel of the fork. The action at the first red arrow further validates the fork – note how price spiked to support and then reversed. Even though we saw this line violated on the next approach we were still watching to see the effect of the Lower Parallel when price reached it again at the second red arrow. Three solid bars finding support along this line of previous activity have led to a move this morning from 1.4462 to a high so far of 1.4538 – not a huge move but one that could have been taken with a tight low-risk stop.

I will continue to monitor the movement of price within this pitchfork, looking to follow the strengthening and weakening of trend. If price pushes to a higher resistance in the angle of the fork and support steps up as well, then we will be looking for higher prices. If however we find a lowered resistance then it is likely our support will be under pressure and we may expect lower prices in the future.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

GBPAUD 60 minutes – A Fresh Approach

It has been said that we are pattern seeking mammals in that we look to make sense of the world around us by looking for rhythms or patterns in what we see. This is certainly true when looking at the chart of a financial vehicle – we are seeking to understand what is happening by fitting it in to a pattern that we can comprehend and follow.

Chart 1:

gbpaud-chart1

Chart 1 shows a blank chart of the GBPAUD on a 60 minute timeframe. The moves are obvious but there does not seem to be much rhyme or reason behind what is happening – certainly there is not enough information with which to make a solid trading decision. Median Line Analysis seeks to give a structure to these moves by quickly establishing the path of price and delineating it by means of a pitchfork. We are interested in the angle of ascent or descent that price is following and will look to trade off the strengthening or weakening of trend.

Chart 2:

gbpaud-chart2

Chart 2 shows what happens when we apply a pitchfork to the vehicle – we look for a distinct A, B and C to make the pivots of the fork, and immediately what appears makes sense of the moves that we have been following. Validation of this being the correct path of price comes from the activity along the line of the fork – the red arrowed touches along the Upper Parallel are evidence of this. Note also how support appears along the line of the arrowed Quartile – indeed if anything it has stepped up to here in the fork from the lows in late May.

Remember that it is the angle of the fork that is important not the lines of the fork itself – the fork is not inviolate or sacrosanct – and if we are happy that we have correctly defined the path of price we will not discard the fork just because one of its lines has been breached. That is the case here, where price moves through the previous resistance of the Upper Parallel and has potentially found a new line of resistance in the circles along the Warning Line. (A Warning Line is drawn equidistant from Median Line to Upper Parallel but outside the Upper Parallel.) I am also taking note of the support and resistance, evidenced by the last two red arrows, along the line of the Outer Quartile.

Chart 3:

gbpaud-chart3

When we see evidence of price showing a change of behaviour we will look to define this by means of a fresh pitchfork. In this case the breach of the red Upper Parallel led me to the blue pitchfork shown in Chart 3. Again I used a distinct A, B and C as my pivots and I am currently looking to see if there is action along the angle of the fork in order to validate it. I have circled two possible areas  that may do this – potential resistance along the Median Line and potential support along the Quartile. It is too early to say that this is a proven description of a new path of price but it bears following to see what develops.

Chart 4:

gbpaud-chart4

Chart 4 puts these two pitchforks together and this is what I am currently following in order to track price on this timescale. I am keeping an eye on the potential red circled resistance along the red Warning Line and also the green circled support along the blue Quartile. Should the red Warning Line be breached my attention will then turn to the next potential line of resistance along the blue Median Line.

I will be watching for supports and resistances along the lines of both forks to see which one is in control. Be aware that we may find one fork defining supports and the other defining resistances – both need to be followed. I will also be looking at this chart in the context of larger 240 minute and Daily charts.

Median Line Analysis using pitchforks seeks to provide order in the moves of financial vehicles. The methodology allows us to define the path of price and thereby look for anticipated areas of support and resistance. By following the strengthening and weakening of trend along these lines we are able to analyse and trade the vehicles using high-probability, low-risk strategies.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

AUDNZD 240 and 60 minute – Changing Behaviour

In my last article I stated that I wanted to “note how the lines of the pitchfork are there to define the path of price rather than to act as inviolate supports and resistances. Median Line Analysis seeks to recognise and follow the trend of price – the angle of ascent or descent – and to delineate this path by means of the pitchfork. We are looking for validating action along the angle of the lines and for the strengthening or weakening of trend rather than whether or not the lines of the fork remain intact.” Since I wrote that, even though the vehicle has continued to the downside moving out of the pitchfork itself, the lines that we have delineated continue to allow us to track price.

Chart 1:

audnzd-b-240-chart1

Image 1 is an updated 240 minute chart and shows these recent moves. We had originally validated the fork – shown that it is correctly marking the path of price – by means of the puce Sliding Parallel, showing support and resistance, just above the Median Line. We were slightly wary of the lowering resistance in the angle of the pitchfork as shown by the series of puce circles. Lowering resistance can lead to lowering support and this is precisely what we saw.

From the fourth puce circle price fell very strongly through potential supports – notably the Lower Parallel. Weirdly, the fact that such a very strong bar took price through this line does validate the line – it took such a strong bar to breach the support. What next happened also caught my attention – the previous support of the Lower Parallel (as shown in the first red circle) then becomes resistance as shown in the second and third red circles. As on the horizontal when support then becomes resistance that is viewed as bearish.

When we see a spike low, the practice is to draw a Sliding Parallel off this bar and this is the case with the puce line with the green circles. Again we see the same pattern develop as above – the line of support drawn in the first green circle is breached and is then retested from underneath. The trend continues with price stepping down, with support becoming resistance. Despite price falling beneath the Lower Parallel of the fork we still use the lines of it to show the strengthening and weakening of trend.

Chart 2:

audnzd-b-240-chart2

Image 2 shows a 60 minute chart of the same vehicle and indicates how one could follow the move lower using the same methodology but in a different timeframe. Remember that what we are looking to do is to establish the path of price using the obvious pivots as the A, B and C of our fork.

Note the line of resistance that is quickly apparent along the Upper Parallel of the pitchfork – this would be enough to keep a careful watch on it for an indication as to future moves. Price does spike above this line to the Outer Quartile before falling very strongly and you will note that support emerges at the other Outer Quartile – there is some “balance” or “equilibrium” around the Median Line of the fork with one Outer Quartile being resistance and one being support.

Note how price moved from this Outer Quartile support and established a new channel – running between the resistance of the green Sliding Parallel and the support of the Lower Parallel. If anything the last few bars show that resistance may have lowered somewhat and it now appears to be along the line of the Quartile. I will continue to monitor this chart looking for any raising or lowering of these supports and resistances that we have noted – remember that it is strengthening or weakening of trend that we are following here. The 60 min chart gives early warning of what to expect on the 240 minute chart and I will obviously relate this chart to the larger one and will watch that for any further breaches of the supports and resistances that we have noted above.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Revisited – GBPAUD 60 minute

In a previous article I looked at the GBPAUD on a 60 minute chart and I wanted to return to it once again. That article showed how we had established that we had found the path of price and discussed how we looked to follow the strengthening and weakening of trend along the angle of the pitchfork that we had drawn in order to describe it.

Chart 1 shows how the path of price continues to have effect even as the vehicle falls from a high of 1.8297 in early May to the first green circled low of 1.7828 a couple of weeks later. What I have tried to make clear is that it is the path of price that is all important, not the lines of the pitchfork itself. We do not discard a pitchfork if price moves above or below the Upper or Lower Parallel nor do we view the Median Line as some sort of “magnet”. We are using the fork to define the angle along which price moves.

Chart 1 is a very good example of this. Even though price has indeed fallen below the Lower Parallel the two green circled lows on 14th and 15th May are still in the line of the fork – the blue dotted Sliding Parallel drawn from the first low successfully catches the second low the next day. A trader taking a long in the second circle at 1.7836 would only need a stop of 10 or 12 points to be safely beneath the previous low of 1.7828. Median Line Analysis using pitchforks allows us to predict with great accuracy likely areas of support and resistance and to take high-probability, low-risk trades along the lines we have established.

Chart 1:

y1-1

Chart 2 shows how price moved from the anticipated support at 1.7836 to a high of 1.8334 in a matter of days. Potential resistance at the Median Line – as on the 12th – was taken out by a single strong bar, indicating the likelihood of a move higher and also, perversely, confirming the continued validation of the fork. From the high we see price starting to retrace, moving once more to the downside. We quickly establish a line of resistance in the red circles along the Upper Parallel and before long are able to draw the puce line of resistance from the recent high. Note how price is stepping down once more in the blue fork, all the while respecting the puce line of resistance that we have just drawn.

Chart 2:

y2-2

Chart 3 shows what happens if we draw a pitchfork from the same high in place of this line. We are using a variant known as a Modified Schiff whereby the origin is moved 50% in both time and price from the A pivot towards the B pivot. You will notice that not only does this provide an Upper Parallel line of resistance the same as the puce one, but the body of the fork provides some very good context and detail as to what is happening to price as it declines. After the Upper Parallel rejection of the red fork on the 27th price declines before finding support along the quartile of this fork. We had no reason to know that this would happen beforehand but having seen that it did happen we are then open and aware of the possibility of it happening again and again. We have predicted and proved a line of support where previously there was none. Similarly we note that resistance has lowered from the line of the Upper Parallel to the line of the Median Line – again what we have done is create a channel within which price is moving. We will now continue to monitor the path of price looking to see what happens as price challenges this support or resistance – we are following the strengthening or weakening of trend along the channel that we have drawn.

Chart 3:

y3-3

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Duelling Pitchforks – GBPNZD 60 minute

Members of the Cross Pair Analysis service have been closely following recent action in the GBPNZD 60 minute chart off the back of what we have been seeing in the larger Daily chart which is shown here as Chart 1. It is obvious from this that price has been moving in a channel defined by the two puce Sliding Parallels and the recent circled touch on the lower one has given rise to a solid move to the upside. By looking at the context of the larger chart and then the detail of the smaller 60 minute ones, we were able to put together a comprehensive “map” of recent action.

Chart 1:

x1-gnd

Chart 2:

x2-1

Chart 2 shows the GBPNZD on a 60 minute basis and you can quickly see that the blue fork is well validated. Using Median Line analysis we are looking to define the path of price of a vehicle and to follow the strengthening and weakening of trend along this path. As price retreats from a brief foray above the Upper Parallel the line that is most telling is the one that I have highlighted in puce – this line first provided support and then turned into resistance, strongly implying that the pair would continue to move to the downside. In the same way as on the horizontal, when a line of support in a pitchfork becomes a line of resistance, it is deemed bearish. Note also the green circled support at the Warning Line – this is a line beneath the Lower Parallel the same distance from the Lower Parallel as the Lower Parallel is from the Median Line. Even though price has moved below the strict confines of the fork we continue to track it by means of the angles given by the fork – remember it is the path of price that is important and not whether or not it stays within specific lines.

Chart 3:

x3-gn60

Chart 3 shows the same chart in close-up and with the red pitchfork highlighted. When price found resistance along the puce Sliding Parallel in Chart 2 we drew this red fork to the downside, looking to see if it too correctly defined the path of price. The series of red circled resistances at the Upper Parallel shows that it did indeed succeed in doing this. Note also the green circled support along the line of the Quartile before price dipped beneath this line and it then became resistance. The last green circle shows the touch on the blue Warning Line that we have previously mentioned and is close to finding support along the red Median Lien as well.

Note how price rose once more to anticipated resistance at the red Upper Parallel before pushing through and up to test the red outer Quartile. The breach of this line and subsequent retesting of it from the upside – as shown in the blue circle – was a further bullish sign. Even though the red fork is downwards trending we can use the stepping up of support and resistance along its lines to give us a good indication of increasing strength in the vehicle.

Chart 4:

x4-2

However the main indicator of such strength obviously comes from the blue upfork that we have been monitoring for some time and Chart 4 shows in detail what we were following.  We watched how price found support at the blue Warning Line and then once more along the blue dotted Sliding Parallel on the 15thand 16th. It is very subtle but you can see that once more we found a line changing its role – this time from resistance to support and this would have been a bullish indicator. As price pushed higher it encountered the blue Lower Parallel which I have marked with a series of green circles. A line that was support on the 5th and the 13th was now proving tough resistance to overcome. Price dropped back, but only as far as the puce Sliding Parallel – you can note that we are seeing a stepping up of support in the line of the blue fork, from the Warning Line to the blue Sliding Parallel to the puce one. It was therefore no great surprise when in the last green circle price pushed above the Lower Parallel, and not only that, but also found bullish support along this line of prior resistance.

Price has moved to a high of 1.9660 – a good move from the Warning Line at 1.9270 and also from the puce Sliding Parallel at 1.9430 and the Lower Parallel at 1.9495.

I hope I have shown how initially using the context of the Daily chart we were able to look for and take advantage of a move to the upside. On the 60 minute chart, putting together price stepping up in the red downfork and seeing the action along the line of the blue upfork we were able to watch and predict likely areas of support and resistance.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Across Timeframes – AUDCHF

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 min ones. I wanted to look at this pair in further detail and expand on what I had previously written to include an explanation of how we look across timeframes in order to map and define how vehicles are moving.

Chart 1:

audchf240-chart1

We had been following the AUDCHF 240 minute chart shown in Chart 1 for some months by means of an Andrews’ fork originating in mid-December 2013. We use pitchforks to define and delineate the all-important path of price and seek to follow the strengthening and weakening of trend as the vehicle moves along. Using distinct A, B and C pivots we were alerted to the fact that this pitchfork was likely defining the path of price by the green circled action underneath the Lower Parallel in mid-March. To some people the fact that price was outside the Lower Parallel would disqualify the fork and start them looking for something else. Remember our focus is on the path of price – in other words it is the angle along which price runs that is important. In this case it happened to be beneath the Lower Parallel, but what sticks out is the fact that it was along the dotted Sliding Parallel.

We continued to follow price noting how it “stepped up” to find arrowed support along the Lower Parallel and then moved higher to find resistance along the Median Line. Note how the purple highlighted Sliding Parallel acted as support before price stepped down once again to once more find arrowed support along the Lower Parallel. We are watching previously proven lines of support and resistance given to us by our early definition of the path of price.

From the Lower Parallel price started stepping up once more – the series of arrows show this move. Note the penultimate arrow shows support along a Sliding Parallel that had previously acted both as support and then resistance. This is also the case with the final red arrow showing how once again the purple Sliding Parallel acted as resistance and then once more as support. As on the horizontal when a line of resistance becomes support that is viewed as bullish.

Chart 2:

audchf60-chart2

Chart 2 shows the same vehicle on a 60 minute timeframe and is something I have written about in a previous article. This smaller chart allows us to use the same methodology and techniques to look at the moves we have seen in Chart 1 but in finer detail. Without going into too much detail – this is found in the previous article – the third green circle shows a conjunction of support and a low-risk, high probability place to take a long trade. The resistance along the red Sliding Parallel became support in the same place as we witnessed an arrowed touch on the tested and proven blue Lower Parallel. Not surprisingly price took off from here and we have been tracking it closely ever since. We are watching it move in the channel defined by the two purple Sliding Parallels though are aware of a potential stepping up of support as shown by the red arrows. A stepping up of support will often lead to a stepping up of resistance too and we are currently watching to see whether we now push above the Sliding Parallel resistance and set a new, higher channel in the line of the fork. The move from the blue Lower Parallel at 0.8155 is now worth some 210 points for a risk of a 10 point stop beneath prior support.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Change of Behaviour – AUDCHF 60 min

I have received an email asking me to have a look at the recent change of behaviour that we have seen in the AUDCHF via the 60 minute chart. This is something that I will probably cover in greater detail in tomorrow’s free webinar – registration at the bottom of this article.

Chart 1:

aj-chart1

It is very apparent from Chart 1 that from early April the pair has been moving sideways to downwards and we have tracked this by means of a pitchfork. Using Median Line Analysis we look to find and define the all-important path of price. Having done this we are then able to look and trade off high probability areas or lines of support and resistance along the angle that we have discerned.

The initial validation of this downfork came from the series of lows along the lower quartile but perhaps more importantly it was the action in the series of green circles that drew attention. There was a stepping up of support in the angle of the fork, by which I mean that the areas in which support was to be found were becoming further away from the Lower Parallel. This tells us that there was a bottoming out in the vehicle and that it was certainly worth following to see if there was indeed a move to the upside beginning. Importantly the last green circle shows that support seemed to be establishing itself along the line of the Upper Quartile – a line that had previously been resistance.

Chart 2 shows how price continued to move to the upside and how when it breached the red Upper Parallel we drew the blue pitchfork in order to try to define the new path of price. Using the distinct A, B and C pivots we were quickly able to establish some validation of this new pitchfork by means of the Lower Parallel touches and reactions on 6th and 7th of May. We also saw a line of potential resistance forming along the blue dotted Sliding Parallel.

Chart 2:

aj1-chart2

What this Median Line Analysis allowed us to do was to meld two concepts to provide a low-risk, high-probability long trade from the third green circle on 8th May. Firstly look at the puce Sliding Parallel in the angle of the red fork – the first two green circles show where it acted as resistance and the third shows where this resistance became support. As on the horizontal when a line of resistance is breached we look for price to come back and test that line. The second important line ids the Lower Parallel of the blue fork – this has already been tested and validated as a line of support on  a couple of occasions and we could look for it to provide support once more.

When these two factors coincided at the same point in the third green circle they provided an obvious place to look for a long trade. By placing a stop beneath the horizontal brown line at 0.8160 we were using prior support as our safety net. The long could then have been taken at 0.8167 at the conjunction of the puce Sliding Parallel and the blue Lower Parallel. A mere ten point stop would have been enough to enter this trade with some confidence.

Since then price has indeed moved considerably higher – the current high being 0.8315. I hope that I have shown how Median Line Analysis using pitchforks allows us to quickly establish the path of price and to use high probability lines of support and resistance to enter low-risk trades.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.

I recently hosted a webinar looking at these pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018

I will be hosting another one on Tuesday 13th May – free registration available here:
https://www4.gotomeeting.com/register/145063263

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Something from Nothing – GBPAUD 60 min

I have written before that we are pattern seeking mammals – by which I mean that we look for patterns in order to help us understand what is going on. Technical analysis looks to make order and reason apparent from the jumble of data with which we are presented when looking at financial vehicles.

Chart 1:

ga-chart1

Chart 1 shows the 60 minute bars of the GBPAUD beginning in early April. Even from a cursory glance at this the pattern is evident – a move from bottom left to top right – an increase in price over time. If we were looking to trade the vehicle the likelihood is that we would want to follow the trend ie to get long at some point.

In order to help with this we might draw the lines shown in Chart 2. They reflect the move and show likely area of support and resistance. However with Median Line Analysis using pitchforks we look to take this idea to another level by determining and defining the path of price.

Chart 2:

ga2

Chart 3 shows a pitchfork drawn from distinct A, B and C pivots and to my eye it manages to define the pattern of movement of price. When we put a “framework” around it this pattern becomes obvious and it makes it far easier for a trader to “work” the vehicle to his or her advantage.

Chart 3:

ga60-chart3

The initial validation of the pitchfork – showing that it was correctly defining the all-important path of price – came from the series of touches shown by the first set of red arrows along the puce Sliding Parallel. The fact that there was resistance along a line in the angle of the fork meant that we were potentially discovering a valid path of price. If you look at the Median Line just after the first red arrow you can see that price found support on it – so when price returned to the Median Line in the first green circle we would watch to see if once more it provided support. There was indeed a bounce from the first green circle and on a retest a trader would probably look to take a long trade.

This could have been entered at 1.7935 with a stop below previous support at 1.7928. The likely target would have been at prior resistance along the puce Sliding Parallel at 1.8040 but the very strong bar from support sliced right through this level and did not find resistance until the exact touch on the upper Quartile at 1.8137.

Having breached prior resistance we look to see where support manifests itself. One obvious place would be at this line of prior resistance along the puce Sliding Parallel and the upward facing red arrow shows that this is precisely what happened. Indeed we formed a new channel in the line of the fork demarked by the red arrows, with the upper Quartile as our resistance and the puce Sliding Parallel as our support.

I am now watching the pair in the approach to NFP to see if price has stepped up in support and resistance once more. Resistance appears to be pushing above the Quartile to a new blue dotted Sliding Parallel and support may now be stepping up from the puce Sliding Parallel to the Upper Parallel. I will continue to monitor this.

By using Median Line Analysis we were able to predict likely areas of support and resistance with great accuracy and I hope I have shown how traders can make use of this high probability methodology.

The Cross Pair Analysis uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.

If you would like to find out more about our analysis or services please follow the link:
https://www.coghlancapital.com/signup

I recently hosted a webinar looking at non-dollar forex pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018