I hope everyone had a wonderful holiday season and wish you a profitable, healthy 2008! I haven’t posted recently due to time constraints but there are exciting changes coming to my website and I will share details soon.

Today’s setup is a little different than the ascending / descending channels I normally trade. I rarely use indicators but occasionally I will use a MACD indicator to look for divergence ahead of a major support or resistance barrier. EUR/USD is currently trading near the significant resistance barrier of $1.4523 and the MACD is showing negative divergence meaning the market is making higher highs, but the MACD trend is showing lower lows.

This could mean the market doesn’t have the strength to punch through the $1.4523 barrier and gives us a “magic eight ball” view of what may occur.

Normally, I would short the market on a reversal candle with this setup but today I’m going to wait for the U.S. Durable Good and Consumer Confidence data. I’d like to see a bearish bounce off $1.4523 before getting short EUR again.

Best of luck today and I look forward to trading with all of you in 2008!

::Ryan

Following up on the EUR/USD channel trade I posted Monday we finally got a reversal candle early in the Asian session last night. We got short EUR/USD at $1.4759. Today the EUR/USD rode all the way to the bottom of the channel for a sweet, tasty profit on a 20 pip stop. These are my favorite trades for two reasons:

1. The setup is easy to spot going into the Asian session.
2. Most of the action starts while I sleep during London trading. Nothing like making money while I sleep.

Best of luck following the Non-Farm Payroll this coming Friday!

-Ryan

The U.S. manufacturing sector is still expanding, barely, according to today’s ISM Manufacturing report. The good news is of little consolation to America’s hard working robots that apparently are being outsourced in favor of cheaper robots overseas according to The Onion. This may have an impact on U.S. payrolls shortly if robots who only know one manufacturing process are not reprogrammed and assimilated back into the workforce which may be harder than some think.

“QT2D-7, an 11-year-old electric assembly-operations robot, was laid off Monday when the Lawn-Boy plant that has employed him relocated its manufacturing headquarters to New Delhi, India…”Observation: I’ve never known anything but assembling lawnmowers. Query: Just like that, they throw me out?

-The Onion Article”

Back at my trading desk I am not expecting much activity until after the slew of central bank announcements start tomorrow and Friday’s Non-Farm Payroll report. The market seems to be hinging a lot on the U.S. payroll numbers so expect a wild ride, I plan to stay out of the way.

As for channels, I’m adding this USD/CAD 4-hour channel to the “watch list”. Loonie has the potential to make a decent move while it hovers around Dollar parity and commodity traders struggle with sagging oil prices.

Best of luck and never risk more than 2%.

-Ryan

Last night we got a small bounce for about 30 pips off the bottom of the AUD/USD 60 minute channel I pointed out last night. This morning we are awaiting the ISM data from the U.S. which may set up a decent trade on AUD/USD again. The way I see it, we have a couple of options to trade this pair today.

1. Sell AUD/USD post ISM data if a bearish candlestick appears at the top of this channel.
2. If it breaks out of the channel, wait to buy a bullish candlestick on a test of the channel from the topside.

Best of luck to you!

-Ryan

Last Tuesday my trusty laptop decided it was ready to retire and failed to boot, ergo the lack of blog updates. I took the opportunity to do something I’ve wanted to for a long time and bought a shiny new iMac. I have been a PC guy my entire life since Commodore 64 (I feel old) and wasn’t thrilled with the idea of another PC and Microsoft’s Vista so I felt it was time to “think differently”. Mac’s new Leopard operating system is really slick; I really enjoy using it with iTunes, iPhoto and web surfing with FireFox. I used Mac’s Boot Camp to load Windows XP though because MetaTrader doesn’t run on Mac and Office for PC is far better than Office:Mac. I feel like I have the best of both worlds and I love this machine!

Back at my trading desk; I was able to use free web charts available at DailyFX last week while setting up my iMac to plan two trades. I sold AUD/USD on Monday as planned in my Sunday newsletter and bought EUR/JPY on Thursday evening for a total of 120 pips on the 1^st half of our positions.

This week could be very busy with three central bank announcements and a slew of economic indicators. I’ve included two channel setups I am watching for your consideration.

Best of luck,

-Ryan