Relative Rotation Graph in Forex Trading (2018)
Good, morning, everybody, it is, 727. In the morning on this beautiful, Tuesday the. 31st, of July last. Trading, day of, the, month second, trading day of the week turnaround. Tuesday, as its called. Let's. Go ahead and take a peek at the, trades. From yesterday, and see. How those have gone. Drag. It up there first so. Did. You do we had where we start. With the. Aussie. Dollar was the first one Aussie. Dollar we, wanted to go long on a break of that diamond at 74 88 that has not shown, up yet of course, so. We're just hanging out that one really no trade that, we took there. We. Had gold we wanted to go long on, the. At 12:35. 77. That did not reach up there and. The. Euro. Want. To go long at. 1755. We, got up as far, as 17. 43, so. We did not get all the way up there yet so that's still waiting that's still in play though. New, zealand dollar we. Want to go along at. 6897. That, that, is still up there did. Not play out the. Dollar, oh my gosh we'll talk about the dollar yen because I was trading this last night ping, pong ping pong ping, pong, ping pong ping pong it was all over the place. And. Then the pound dollar, we want to go along a 3155. That. Has. Touched, it that is still in play and active, and yeah. We will keep, an eye on this, okay. Getting. Into the, nitty-gritty I wanted to point out one more time the. This. Thing, here this is called a relative, rotation. Graph and. What. It does is it shows and. It measures the performance of, well. This is the thick Optima. Kate has a Forex one now which is fantastic so, don't have to mess, it up myself, well. That's not to imply they mess it up they actually have it right. Mine. Was wrong. Well. It wasn't wrong it was just this is a lot more, it's. Got a lot more stuff going on oh man we got some movements. Here. What. Did I miss did I miss a news related, release of some sort. Yeah. Well if I know. If. I can find that idea on, here, wherever you're at. Their. Word might alert. Zingo one. Second. So. We just had oh yeah. GDP. Can't. Canada, GDP just came out. So. That's caused some moves and man, that. Canadian. Dollars really taking it on the nose here oh. Yeah. And. The US dollars facing some weakness euros, going up okay. Back, to this while we let those things settle. Down so. Looking, at the relative rotation graph again this is telling us well actually maybe this is a little easier to look at. So. What. We have is, this is faced against a benchmark, so this is based against, the the Dow, Jones dollar, index and so, here's the Forex pairs that I some. Of the Forex pairs I look at and trade and. What. It's telling us is that in, the, upper right quadrant we, have things that are outperforming. So, they're leading so they're ahead of the pack and then, we have the ones that are weakening so think of it like they're, ahead, but they're kind of momentum is kind of slowing down and, then, legging is really where, you see, them when, they get into legging this is where they're really overdone so they're they're weakening into here or they finally transition, into. Lagging. That means that they're way behind and, they, are well outside. Of. Being. That. The the index, is outperforming. It by a longshot and then. Finally when we get into improving, that's telling us that we have positive momentum coming in and that it's getting better and we, can see this kind, of activity. Go. And follow. In flow very, very. Easily. By, watching how it rotates and we can see that you, know we have things that. If. This is base against the dollar it's not. It's. It totally makes sense that a lot of times things will be moving. In. One. Direction against, the dollar or with the dollar. When. We see a whole bunch of things on the inside here. We. Look at. We. Look at the, the. The, center. That. Means that the, things in the center, the. More closer they are to the center the more, correlated. To the dollar they are so if we zoom in I mean. Not surprising, we see the Omani. Rial, we. Have the Hong Kong dollar tied. To the dollar. Jordanian. Dinar i. Mean. A whole bunch of these currencies that we just don't even look at a trader think of the, yemeni real and and. So forth but if we look at the currencies that we do trade so, here's. The euro we can see that it is in the. Weakening condition, we can see that it is doing, poorly, against, the dollar lately, and that, it's pointing, towards getting into the lagging. Indicator. There. The the lagging sector and the pound is in the legging sector as well we know that and. We see that the yen is actually, doing. Well against, the dollar and. So this is this is kind of an anomaly, when we look at how. Things. Are trading. Related. To. Forex. Our forex markets, and how their underlying, currencies are actually performing against the dollar and. We see the aussie dollar. Really. Was doing well then we just really fell fell, down. Here. And, it's. Pointed, down so what. The what I like to do once. A week or so is. I'd. Like to take a look at a relative rotation graph and I like to see what.
Is In, the. Weakening. And pointing. Up towards, the improving because those are the that's, where you catch. The, nice trades, that's where you find the, ones that are overdone. And are gonna ain't gonna yield you a good. Trade. Well. Not, really they will but I mean it gives you an idea. Of what's lagging, or if we want to look at it just at the Forex pairs. You. Know right. Now the, best trades, are going to be silver and gold and the. Farther away from the center something, is the the more alpha you're gonna have the more. Trade. Opportunities, you're gonna have so, something, like the New Zealand dollar even, though it's pointing into the leading. It's. Still in improving, and so there's still a lot of growth available. And. If we look in. Here, this this, current this this pair right here the pound the. The British Pound Aussie dollar that looks like it's gonna it. Could be a good trade here, in a little bit. But. Yeah yeah. We want to this. Kind of gives you a broad. Overview. Of how, things are are, performing. Against. An, index you could do this against the euro you could do this against, the, dollar you, know you could there's. A whole, bunch of things that you can do okay. All. Right now, let's take a look at. Our. Market. All, right where are we at okay. Let's. Turn this off here. Okay. So. The. Euro this, is really really great that we're seeing. This activity. Right here that's, exactly, what we kind of wanted to see. Let's. Bring it over let's. Actually look at the Euro from here. Let's. Look at gold first gold. These. Blocks, here with the volume. Profile, and the straight, blue line these are the weekly, volume. Profiles. And. What. We. Yeah. It's just the weekly volume profile and so the straight. Horizontal line, that represents the, point of control for the week and so. If. We were to draw, these. For every week going on you. Know for a while we would see that we have a volume, profile, that has the point of control that continues to go down until. Last week. We. Saw that the point of control was actually, higher not, by much but it is slightly higher and so you know we're seeing some resistance, in gold, to try and get above that but if we can break above this point of control that'll. Be a, pretty. Big deal that's what we really want to observe, in fact if we look at the daily right, now. We. Can see that we're just, under, the daily, point of control and then here's yesterday's, point of control so. You know, we're, in a area. Where we could experience a nice breakout in gold, and, just. Based on these technicals, alone I believe this is a buy but we want to buy above so, that's twelve, twenty to thirty nine. All, right and. Then. Let's. Take a peek up the euro. Euro. Catching, a nice bit at section we've had a pretty nice drive up here when ever since we came down last. Ride it down to the 116, 25 and we, we, tagged, this. We. Take this, major. Harmonic, we've had some responsive buying and. You. Know we look at the volume profile, we we have a very. Nice. Higher. Weekly. Volume. Profile. We're. Treating above that that's, bullish, we are trading above the past, two days volume, profiles, that's bullish that's, kind of activity we want to see however where. Do we really need to get across we're just looking at visually. Where has price traded, the high of last week is right. Above, us at that 1750. So we really need to pay attention to that zone. If. We if we need to break. Higher if we look at the Sunday Ichimoku on the hourly cloud. We. Can see that we do have buying conditions, met if we go to the 4-hour. Four. Hours telling us that we have good buying conditions, I mean really if we're not in yet I'd the the buy from yesterday, it's that 11755. Is still the trade. One. Point one seven five, five that's, on the four-hour AG. Okay. We. Have that. Aussie. Dollar let's, take a peek there Aussie, dollar whoo nice candlesticks. Set up here I, was a dollar we are we, are for. Our chart, is in a awesome. Buying. Condition, I, mean. That. Is. Wet, at night. Yeah. This is fine. Zero. Point seven. Four. Eight eight. Right. That. Was on the for our itchy. Remember. That. Okay. New, Zealand dollar taking. A look here now. I. Like, this chart. Because. We. Are, above, last week's volume. Profile. The. Point of control and we, have some what. Looks like a really nice support, on the conversion slash, baseline, area and we have legging span above the cloud on for our so, on the for our cloud. This. Is a good. Good. Entry. Zone I. Keep. Forgetting to. Dollar. Yen oh you. Know what we'll come back to this guy pound, dollar. Really. Looking like we'll get a nice breakout above the. Zone here looking. At this on the four-hour Ichimoku. You, know a break above this this. Is a. Harmonic. Zone. No.
It's Not what is that oh I remember where that was there. We're. Above the point of control from, last week which is awesome, because we've had a lot of difficulty. Staying. Above important, zone like that and on the 4-hour chart actually, getting some conditions, met for. That, long trade that we've been waiting for in the pound and so we're looking at that. Entry, being, the, the. One. 3193. You know I think you. Know was. The trade from yesterday still active right here yeah. 131. 6131. 55, was from yesterday so that trade still active so we actually just got all, those beautiful conditions, met that's that's active right now I. Think. Those are perfectly, fine and appropriate. We. Got US, dollar Canadian dollar. Facing. A little. We. Got little. Buying. Back here but there nothing. Overly. Okay. Over. To the. Euros. Nice, getting, a nice break out there, broke. Above that triangle, that's that's, that's. Hot that's awesome. Girls. Catching a nice bit here. Thanks. Nice Drive. All, right um okay. Skype. Messages in the morning yeah, okay. Oh. Actually. Take. A peek at the dollar index real quick. We. See some continued. Weakness here on the 4-hour chart we. Have I mean. We see gorgeous conditions. Met on the on, the. For. Our G muku system for a for. A pushdown in the dollar index. So. We should see some inherent weakness, going, with those and. With. The dollar so that'll, be that'll be that'll be a fun interesting, trade to look out for. Then. We, got let's. Go back to that dollar, yen I feel so scatterbrained today so that yen yesterday. Bank of Japan that I. Mean it said that it wasn't gonna do much with its surprise. Surprise you're gonna. Continue to have negative interest rates and. Of, course. It's. Not. Really. Doing. Anything to change so, that's. Where we had this lot, of activity, last night and, we. Finally hovered, above that. Left. One 11:50. Zone which is also the bottom of the cloud here, and so. The bottom of the cloud generally, on the first retest, acts, test, of it the first test of it generally, acts as a pretty, strong.
Zone. Of. Resistance. And. Which we are seeing play out right now and we. Could actually see that continue. To. To, act like that as we. Go on. And. I. Really. Actually like the, idea of the short here. At. The present value area because, of where we're at on the cloud. That. Is a good value. Area, to be on the short side I think today. We'll see a, pretty, pretty. Interesting, move. In in. Definitely. The Euro we're seeing that already but then also. Gold. Probably, and and. Maybe. You Jade maybe by the end of the day. Pound. Dollar. Nowhere, to go. Where. Did you go. Trying. To figure out which, chart, I had. This. One I think so maybe. Yeah. Aussie. Dollar. Better. Look. Right. Here. It's. In a really, awesome spot been talking about this for the last week or two is the. Aussie dollars right it's actually trading, on slightly, above it's 360. Degree square. Of nine value, area which is also right below, or. Shared. Cot it's a confluent, zone of its. Of. The. Longitudinal. Line, of Saturn that, is the planet. That shows. Good. Support, resistance for, the, Aussie dollar now when we've had a lot of this activity. This this is just all, consolidation. Down here when, that's happening, right below. A planetary. Line and, you don't see a continuation, especially. After. You. Know over a month so, 45 days we've been sitting in here this. Is telling us that we're we got a we got a prep for launch we, got to be ready for the, drive higher and it's gonna be a pretty Swift Drive higher. This. Won't. Last. Long. The. The, continued, stay. In this zone so, be. Very very careful, and. Wary of that, this. Is this is gonna be an interesting area. To look at if. We do get a rejection, lower then. Certainly. We're gonna have to wait for a break. Down here but remember this is that diamond formation. That. I was talking about those are those, don't happen, often they're pretty rare but when they do show up and when the reversals, do happen they are often. Very Swift. You. Know we can actually see this formation somewhat. In in. Gold. As well. Not. As big of a degree but it's actually got now, this, is probably isn't a good the. Point of it but gold. If you, know it's. It's. Around. Its little, support, zone here - at this 315. Degree do I not have a planet, on this. Why. Don't. You. Let, me get that on there. GPL. Can, planetary. Lines there, we go. Although. I don't have this square for this story. Well, oh, yeah. It's it's, it's the single digits, sorry, pardon. My babbling. I. Don't. Need those. And. I don't need these dates, there. We go. Okay. So I. Know, Mercury's, not Jupiter's. Generally. The. Goal. Planet, and setting, some time. Definitely. A Jupiter, and we do three, harmonics. There. We go. Okay. Yeah I mean really yeah we're just kind of a waiting game now. Cool. Not. Much to see there. US. Dollar Canadian oh, you know what yesterday when we went over those musical, harmonics, let's actually look at, how. Those have played out today, so. On. The Euro, it's. A very sexy looking head and shoulders set up here the, Euro we found when it came down to this inner. Note. In, her harmonica, Fayette it. Held. A support, very nicely Aussie, dollar. The. REA has been its strong support zone. The, New. Zealand dollar. Getting. Close to breaking. Above that harmonic, level. You. J not much to look at in there the, pound, holding that as a very strong level. What. Else what else what else. We. Had and, gold, holding. Around that harmonic level too this was kind of that on, the on, the, for, our I believe is where. We. Saw most, of the. Diamond. Setting. Area, the, interesting to see where we closed on this daily. That, we're rather on the daily chart on the four-hour chart Gold's. Sitting, down there getting, a lot of pressure at the moment but. That's that. Is a BKB. There's a strong support, zone for gold anyways where we're currently sitting. And. Let's, see what else what else what else, I. Thought. We had. We. Don't it's fine yeah. So just really a lot of. Kind. Of just waiting game going on but we should see a lot of a lot. More activity, today. The. Dollar index again, is is. In. A pretty weak state. Caught. A little bit of a bid right now we'll. See what this looks like at the eight o'clock hour on, a lot, of these pairs we. Could definitely see, the. Trade. Continue to go down I mean we really we've been looking at the dollar index ever since the 19th, and we see that it is. Continuing. To pull down lower we're, outside, this band here. You. Know on the 4:00 hour we're pretty flat with the Ichimoku but. When. We keep testing lower, like this we are setting, up for a longer, term. Push. Down lower. In. The future, here. The. Gould's. Setting, up for a nice a. Nice. Drive, higher. Getting. A really beautiful, base formed, around this entire zone. That's. Looking really good actually, the. Euro is. Clearly. Telling us that it wants to move higher that it wants to break out higher that it's going to break out higher.
That. Short-term, uptrend. Line facing. A little bit of heat up there. Aussie. Dollar. Same. Thing, slowly, churning, up here one. Of those one, of those telltale signs that you're going to eventually break, an area of supported resistance, is when you start to have, a have, kind of a deliberate, ponderous. Drive. Towards. That zone and then, eventually. It just kind, of, it. Just kind of you just you just blast through it. New, zealand dollar, very. Similar situation, we're talking about this for last couple of weeks where you know it's coming up against that middle, harmonic, there you. Know we should, expect to see this behavior we should expect to see as things, form, into triangles, in the. Market you, often, see the volume drop off that is a totally. Normal, thing, to have happen, where you, get into those tighter, consolidation. Zones volume. Does, drop, off it is not as it. Is not volume, is not important, when you're getting into the. The. Ends. Of triangles, in the. Market the volume becomes. Irrelevant. Mostly. Irrelevant because. Really all we're looking for is a break. Above. Or below of the structure, and certainly. Our bias. Based. On a weekly, chart as to the topside so we. Should watch, very carefully. What. Happens with, the New Zealand dollar at this level because we would break above. This 45, in this square here we would break above this the, very mid price level of 68 24 that is the exact. Center, of price. For. The entire history of the New Zealand dollar. And. Yeah. That's that's a zone to look out I mean we're just showing, a lot of, push, towards, these zones lately, you, know the dollar, yen doing it's it's like a chicken with its head cut, off, up. The pound, really. Wanting to break above this structure, here and move. US. Dollar Canadian dollar that's. Actually could, not cross above, that. Midpoint. Let's. Look at it over here on, the hourly. Yeah. Yeah. That's actually watch. This one play out a little bit I. Have. To see. Hmm. And, thinking, about it but yeah. Dog. Swiss Kenobi, gonna be New. Zealand dollar East yeah really not a lot, of activity. That I don't think we be pulling at 68 19, yeah. That was at that present value area that's still actually fine. Cuz we're, lagging. Span still okay price. Is still okay all that you guys were coming up against this angle, as a support, zone so that's fine yeah yeah, a lot of these markets we're just kind of gonna have to watch and wait and monitor and. Manage. As we go on through the day so, otherwise. Short. Day today. Again. One o'clock crypto. De crypto markets, trading live, and I. Look forward to seeing you there for this afternoon if not I will talk to you all tomorrow morning, bye bye.