Welcome to Melonstrade
Dear Traders,
Welcome to another edition of Melonstrade's Weekly Newsletter, where we delve into the intricacies of the forex market, exploring Market Cycles, and Harmonic Patterns to identify potential trading opportunities.
Following on from the theme last week where we were first to point out the strength of the US Dollar Basket entering a third trend higher, which is exactly what it is beginning to show. This then helps to concrete our view regarding USD/CAD, USD/CHF for both going higher.
We now have the nice green engulfing candle setting this trade up.
US Dollar Basket
Market Overview:
USDCAD - Cycle Analysis: USD/CAD is currently in the second Market Cycle higher, we can also see that it has made a higher low, which is the very early signs that atrend may begin to form. We have seen 3 small pushes up which has made a change of character as price has taken out the previous LH. This automatically sets a bullish precedent for this pair.
On a smaller time frame we can see that USD/CAD has created 2 cycles higher and with a Harmonic Pattern for entry, in this case a BULLISH GARTLEY BUY PATTERN (below) This is exactly the point of Melonstrade to highlight to you the opportune times to consider the market for entry.
USDCHF - Cycle Analysis:
With the Dollar Basket showing that prices are set to move higher, the same characteristics are visible in USD/CHF. We can see below the chart is showing to us two small cycles higher. The markets work in three.
Notice how the Harmonic AB=CD pattern in red within Market Cycle 2 giving a perfect entry into the trend.
AUD/USD - Cycle Analysis
AUD/USD is setup in Market Cycle 2 to move lower in to trend level 3.
Here is the context for the move from the Daily timeframe, notice the smaller 1,2 labelled is the picture below on a lower time frame, showing the same characteristics as the main HTF pattern. THIS IS KEY INFORMATION
Below is a close up view of the 1,2 labelled in the chart above. This is the fractal nature of chart patterns.
CADCHF - Cycle Analysis
CAD/CHF has completed a huge AB=CD pattern that has taken 6 years to complete.
Below we can see on a smaller time frame the Market Cycle showing a move from Market Cycle 2 into the third trend.
Key Trading Opportunities:
USDCAD and USDCHF:
USD/CAD for potential continuation higher moving into USH 2 of 3 potentially.
USDCHF, Looking for a retest of the BOS. having completed the AB=CD pattern in Market Cycle 2.
CADCHF - Generational Long:
CADCHF Huge AB=CD pattern completed, and an entry opportunity from the low. We spotted an entry whilst in teh second Market Cycle higher. Looking for continuation.
Conclusion:
Trading is inherently risky, and understanding the nuances of market cycles and patterns is crucial. It's essential to approach these insights with caution and conduct thorough analysis before making trading decisions. If you have any questions or seek clarification, feel free to reach out.
Remember, trade responsibly and manage your risks diligently.
Wishing you a successful trading week!
Best regards,
MelonsTrade
You can purchase our guide to Harmonic Patterns and The Market Cycle in our store. This is a 60 page document with over 40 images of Harmonic Patterns broken down so you can understand the behaviour.
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