The market has been fairly indecisive lately, and today was no exception. With these market conditions, the best decision can often be to stay on the sidelines and wait for a clear signal.
Although today was quiet, there were a few interesting moves today…
The GBPUSD has struggled over the last two sessions to close above the 1.682 level and today’s price action formed a bearish pin bar. This may look tempting to trade, however there are a few reasons why I’ll remain on the sidelines at least for now.
If the market does rotate lower to the 1.676 level, it might provide a good area to look for price action buy signals.
The USDCHF continues to hover around the .892 level since forming the bearish pin bar last week. At this point I’m not overly convinced that the market is going to rotate lower, at least not significantly. The market is looking well supported at the moment.
I wanted to highlight both pin bars that have formed at this level recently to point a couple things out. Notice how the market dropped fairly quickly after forming the first pin bar had formed. This bearish signal also occurred at trend line resistance from July 2013, adding additional confluence to the trade.
The second pin bar also formed at the .892 level, however the market has since broken through the trend line. Furthermore the market has been hovering at this level over the last two sessions. Not only has it been hovering, but each of the last two sessions has closed near the high of day.
This isn’t to say that the second pin bar won’t play out. But the trade setup does begin to lose some steam for every day the market closes around this level. Of course every trader has their own threshold when it comes to this.
The USDJPY made a scramble to close above the 101.40 level today. Although we did get a bullish pin bar out of today’s price action, the lower highs as illustrated in the chart below aren’t so convincing that a significant push higher is on the horizon.
I’ll be on the sidelines to wait for a better signal…