Black Monday: Chart Damage

August 25, 2015

Let’s take a look at the damage Black Monday has done to our Forex charts. We have a look at what price has done to begin the week and most importantly try to look forward and discuss some actionable ideas around where to from here.

We’ll go through some of the key charts here with a look at the bigger picture in a longer time frame chart and then zoom it in a bit more from there. This is just the beginning so keep an eye out for the Vantage FX Daily Market Update blog featuring a chart of the day, as well as the @VantageFX Twitter account as we continue to sift through the technical analysis fallout on more markets.

EUR/USD Daily:
Click on chart to see a larger view.

While not the biggest mover, I find this chart to be the most amazing. After all the doom and gloom surrounding Greece and the Fed raising rates putting parity on the cards, for price to actually have tested it’s yearly highs on this move is just unreal!

The long, bearish trend line you see marked here has now been well and truly broken and the Black Monday fear combined with a large number of major players unwinding their short exposure saw the mother of all squeezes back up to where we sit now.

I still cant be too bullish EUR/USD but charts and momentum don’t lie and I don’t like the idea of jumping in front of this moving train here.

EUR/USD 4 Hourly:
Click on chart to see a larger view.

I’ve tried to mark a few zones where in hindsight an argument could have been made to position yourself long, but even this is a stretch. With all the chopping in and out of that trend line leading up to that breakout, I had zero conviction in and buying strength and just had to watch this one fly away to the moon without me.

Just have to admire that vertical move.

AUD/USD Weekly:
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We’ve been talking about this major weekly confluence of support on AUD/USD for a while now and last night’s move pushed price down to finally give it a test. A test that it passed with flying colours!

As you can see by the long wick on that one day old weekly candle, price rejected the level hard and fast and has done nothing but rally out of it since.

AUD/USD 4 Hourly:

Short term though, it’s always nice when your scenarios play out!

Click on chart to see a larger view.

After last night’s move, a tight, 4 hourly channel shouldn’t be what you continue to base your trades around or honestly you’re just asking to be stopped out by a whipsaw.

That makes this short term chart pattern void for now and although this little recovery bounce looks to have a bit of merit, it’s still all about what happens on the NY Pit Open again.

NZD/JPY Daily:
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While not a chart that I normally keep on my watch list, the fact that one of the biggest moves came on this pair caused me to sit up and take some notice.

NZD/JPY 1 Minute:
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Yes, that is what a ONE THOUSAND PIP MOVE in ONE DAY looks like on the 1 minute chart.

If you have a chart or market that you’d like to share or talk about then please mention @VantageFX on Twitter, leave a comment on our Facebook Page or simply reply below.

Dane Williams – @VantageFX

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