USDJPY

After its break-out of the triangle formation in October 2016, it has meanwhile reached the first target at 111.55 and even advanced further to a fresh 10-month high to 118.60 area. The move was pretty steep and quick. A bit too steep for my taste. But, some consolidation followed and USDJPY has likely completed it as it retraced 38.20% of the whole move which is equal to the major fibonacci retracement level (!). In my opinion, USDJPY is now ready for another major upleg as it has broken out of the consolidation (channel) along with a break of the momentum resistance line. I see further upside potential to 125.80 (old high) and 131.80 (fibonacci trend extension). I would not be surprised if we see again a very steep and quick move.

Conclusion: Second major upleg ahead with upside to 125.80/131.80 (+15%).

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EURUSD

EURUSD emerged to new highs (1.0829) just after my last post, but failed to reach my target (1.0860). Following some range trading, EURUSD then breached an important momentum support line (warning) and fell out of the upward channel yesterday. So far, the pair has lost around 70 pips. I expect further consolidation down to 1.0520 (-150 pips) before we could see another up leg.

Conclusion: Major supports broken. Go short until 1.0520.

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EURUSD

Along with the choppy equity markets, EURUSD looks meanwhile very promising for a little boost and higher intermediate highs. Given the recent bounce off its channel support line (1.0640 area), the most recent break-out from the counter-trend channel and the improving momentum along higher highs, looks very promising for upside to 1.0860ish. Should reach target within two to three days, latest.

Conclusion: Short-term upside to 1.0860ish. Ready for a bounce!

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DAX30 INDEX

In my previous post on DAX30 Index, I warned of a short and choppy road ahead with limited upside. DAX30 Index among other major equity indices then remained in more or less “pause-mode” with narrow trading ranges and vanishing momentum. So far, DAX30 Index has reached and exceeded my intermediate price target of 11’775 and was even able to post a new 20-month high at 11’893. This sounds all great great, BUT when looking at momentum, it does not look too promising, at least for the moment. In fact, despite the recent higher high in price, momentum (RSI 14) made a lower high and is therefore not confirming the price. This is not considered as healthy and warns of a possible consolidation. But a definite confirmation of such a consolidation can only be called when price falls through important supports/trendline. In the case of DAX30 Index, the supporting momentum trendline is already broken (warning!) and I now await 11’700 level to be broken before I act. If 11’700 area gets breached, I see downside to 11’435 and 10’800 (fibonacci retracement). I reckon DAX30 Index to remain within trading channel (green) for a while with 10’200 as an absolute low. On the longer term, I remain bullish and expect a test of 12’400 until June 2017 (likely in May/early June).

Conclusion: Do not chase upside in DAX30 Index, go short if 11’700 is breached (intermediate target 11’435).

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DAX30 INDEX

Just after my last post, DAX30 Index has emerged to new highs and meanwhile reached my projected price target at 11450 points. Whereas EURUSD has plunged further and printed new 13-year (!) lows in the 1.0350 area. Despite the new highs along with the slowing momentum in DAX30 Index, I see further short-term upside to 11’775 area which is equal to the Fibonacci trend extension (9’214 / 10’495 / 11’775). But I would not chase upside too aggressively, rather (if even) trade little short-term long plays with tight stops. When looking on the intermarket picture, for instance EURUSD; it does not look too promising on the short-term side for further upside in DAX30 Index. Despite the new lows in EURUSD, momentum is slowing down and is not (yet) confirming the new lows which calls for some short-term bullish consolidation. Furthermore, EURUSD is about to complete its 5th impulsive wave which has the equal height as the 1st wave (equality). Target is around 1.0350 which is also along the support line of the channel which emerged in August 2015 (color: turquoise).

Conclusion: Intermediate upside targets in DAX30 Index and downside targets in EURUSD reached. Remain on the sidelines until further notice. Short and choppy road ahead.

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DAX30 INDEX

DAX30 Index has finally made its break-out earlier this week off the multiply tested resistance area around 10’800. The inverted bullish triangle which was formed along this 5-months consolidation period, suggests of a price target of 11’450. The 11’450 as a target area seems even more legit as it also is an intermediate resistance given by its 1-year price high. Furthermore, EURUSD faces further short-term downside and confirms my view on the DAX30 Index.

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DAX30 INDEX (WATCH)

In my last post on the DAX 30 Index on 7th January 2016, I warned of further short-term downside from 9’980 to 9’350 (read full post here). The timing was more than right as DAX 30 then slit over 600 points and made a new 1 year low at 9314.

Following a rebound attempt to 10’000, DAX 30 failed to complete an intermediate bottom and meanwhile dropped 10% within just two weeks to 8’980. Despite the new lows and higher volume, the final sell-off is still ahead of us.

It seems DAX 30 is within its final wave 5 of a minor impulsive wave.  Given that fact, the 3rd wave extension and the fibonacci equality ratio extension, I reckon an intermediate bottom will be found at around 8’780. This suggests of another 200 points drop from here (-2.20%) with excessive volume. So it’s gonna be short, but painful.

On the intermarket side, further short-term upside in EURUSD to 1.14, its trend-channel resistance line, seems likely and would be align with the DAX 30 roadmap.

Conclusion: Too early to pick bottom in DAX 30 Index, final and strong sell-off to 8’780 still ahead. EURUSD, buy into new lows with target 1.14.

DAX30 Perf Index 08022016

EURUSD-08022016

EURAUD (IDEA)

EURAUD has successfully broken out of its 4 month consolidation pattern to the upside and is now ready to test old August and September 2015 highs.

The warning for an upward breach of the downward sloping trendline already came in early December 2015, at this time the momentum trendline was crossed to the upside and led EURAUD to rebound to 1.51.

In the meantime, EURAUD has advanced further, crossed above the multi-month downward sloping trendline yesterday (showing upward strength), successfully tested and rebounded from this line today. This area (red line) is now acting as major support. Momentum is align with price and MACD bounced off the 0 line which is also positive for EURAUD.

Along with this latest action and the positive technical outlook, I believe in significant upside in this currency cross within the next couple of weeks.

BUY at around 1.5618
SELL LIMIT (TARGET) at 1.61 (+482 PIPs)
SELL STOP (RISK) at 1.5325 (-293 PIPs)
RATIO: 1.65
TIME HORIZON: less than 3 Months

EURAUD-08012016-daily

DAX30 INDEX (WATCH)

In my last update on DAX30 Index in mid December’15 (DAX30 vs. EURUSD – 14/12/2015), I have mentioned that I expected some upward short-term consolidation to 10’630 levels prior of another down leg to September’15 (9’900) resp. August’15 lows (9’350).

The upward rebound immediately followed the day after my post, kept on for two weeks and found resistance (10’860, +7%) at the major downward sloping trendline (blue) starting off the all-time high (12’390 – April 2015). A flag was built accordingly which is the most typical consolidation pattern, suggested of a short break before the trend resumes its precedent direction (bearish in this case).

DAX30 then fell like a stone and even dropped below its significant support at 9’900 area to 9’810 and is now trading at 9’980 which is still negative (-2.29%) vs. yesterday’s close.

Given the recent flag formation in combination with a fibonacci retracement extension, I expect DAX30 to proceed its downtrend to at least to 9’350.

Why 9’350? Firstly, 9’350 is the projected price target of the fibonacci extension and secondly it is the area of the absolute Aug’15 (9’338) and Sep’15 (9’325) lows acting as major support zone.

Meanwhile, on the price side, we have new intermediate lows in place, but momentum has not (yet) confirmed these price lows, so this relationship is currently diverging. Nevertheless, I expect this divergence not to remain for long and estimate some small consolidation followed by another downleg to August / September lows within next week.

Conclusion: In DAX30 Index, a rebound to max. 10’200 (38.2% Fibonacci retracement zone) is possible, but do not chase upside. Instead, sell into weakness. Projected downside price target: 9’350 (-500 Pts. / roughly -5%).

DAX30-07012016-daily

Review 2015 and Best Wishes

Dear Subscriber

Firstly, I would like to take this opportunity to thank you for your interest and your trust in me and my work for the past two years and especially in 2015.
2015 has been another very challenging trading year and I hope that my outlooks, views and trading ideas have made a significant contribution to your investment portfolio.

Some of the highlights in 2015 have surely been my call for more downside in precious metals when Gold and Silver then dropped -7.20% (Gold) and -10% (Silver). Key was also the downside breakout in EURUSD where I called lower lows and could take a profit of almost 500 PIPs. On the Equities side, my Idea in late 2014 to buy LinkedIn shares really kicked in and ended in a profit of over 20% in a little less than 2 months. Nevertheless, of course there have not only been profits, but with the crucial discipline, a detailed trade plan in hand and given profit/risk parameters among every of my ideas, I was able to assess risk correctly and proved my ability to achieve absolute return no matter how volatile the markets are.

Remember: there are always opportunities out there, but is the potential profit worth the risk for that particular trade? This is the very first you should ask yourself before you invest any cash in the markets. Trading is not about being right all the time, it is about to make money and this goes hand in hand with risk management. Have a plan and stick to it!

In my CHF 100k REVIVE INVESTMENTS (Trading Ideas) CHF portfolio, I achieved an absolute return of +22.36% this year when started following my ideas 1st January 2015 onwards. Since inception in January 2014, the portfolio has made an absolute return of 64.22% with a maximum drawdown of only 6.99% and a maximum gain of 19.93%. In other words, if one started to invest in January 2014 CHF 100’000 and only followed my trading ideas, the portfolio would now be worth over CHF 164’000.

Having looked back to a very exciting 2015, I am looking forward to 2016 and wishing you and your family a wonderful, healthy and prosperious New Year.

See you in 2016 and happy trading!

Best,
Raphael

REVIVE INVESTMENTS

DAX30 vs. EURUSD (WATCH)

With the recent development in the German DAX Index and its inverse correlation to EURUSD, technicals look promising for some further upside until year end.

After the double-bottom formation built during Q3/2015, DAX30 was able to strongly rebound to (almost) 11’000 levels. The measured price target given by that double-bottom formation suggests of upside to 11’650 (+6%). Nevertheless, the momentum is still very strong but slightly overbought, suggesting of not chasing the upside to heavily and instead wait for a breach of the resistance line (blue) starting off April this year – break-out zone in numbers: 11’150 – 11’200.

The intermaket perspective supports this scenario: we have EURUSD just recently crossed below its 7-month trend-channel led by a momentum trendline breach and in combination suggests of further downside in the next couple of weeks / till year end. First support could be found at 1.08 with further downside and a test of the 12-year low at 1.0462.

Conclusion: do not chase upside in DAX30 too aggressively, rather wait for break-out confirmation! Slowly short EURUSD at current levels (Risk Stop: 1.1150).

DAX30-02112015

EURUSD-02112015

 

EURUSD (IDEA)

RELATED/ORIGINAL POST: DAX30 vs. EURUSD (WATCH)

02/11/2015


With the recent development in the German DAX Index and its inverse correlation to EURUSD, technicals look promising for some further upside until year end.

After the double-bottom formation built during Q3/2015, DAX30 was able to strongly rebound to (almost) 11’000 levels. The measured price target given by that double-bottom formation suggests of upside to 11’650 (+6%). Nevertheless, the momentum is still very strong but slightly overbought, suggesting of not chasing the upside to heavily and instead wait for a breach of the resistance line (blue) starting off April this year – break-out zone in numbers: 11’150 – 11’200.

The intermaket perspective supports this scenario: we have EURUSD just recently crossed below its 7-month trend-channel led by a momentum trendline breach and in combination suggests of further downside in the next couple of weeks / till year end. First support could be found at 1.08 with further downside and a test of the 12-year low at 1.0462.

Conclusion: do not chase upside in DAX30 too aggressively, rather wait for break-out confirmation! Slowly short EURUSD at current levels (Risk Stop: 1.1150).

DAX30-02112015

EURUSD-02112015