It's the end of a nice long holiday weekend, and it's time to start thinking about trading again.  I'm still sitting on a few positions held over from last week, all of which are currently in profit.  I'm short EUR/USD and AUD/USD, and long EUR/AUD.  All of these pairs have retraced a bit in recent days, so we'll see if they resume their trend and I keep riding them, or if they continue to retrace and I get out.

Tonight, I'm eyeing a short setup in GBP/JPY.  The pair has been in a bit of a downtrend in recent months with an area of support around 139.00, and for the past few days it's been hugging a down trendline that has been serving as an area of resistance.  It also happens to be just under a horizontal S/R zone that has been in place since mid-2009.  I think we've got some room to move down between its current price of 146.00 and the aforementioned area of support around 139.00.

I'm going to play this one with a tight initial stoploss - the pair has been consolidating in recent days and a logical place for the initial stoploss would be just above the down trendline.  If we break out to the upside of the falling trendline, I want to get out fast.  So, we'll test the waters with a small position and see where it takes us.  As always, I may be wrong!

Just wanted to quickly note a few more potential setups this week before calling it a night...

AUD/USD

After a prolonged uptrend, AUD/USD has been consolidating as of late on the daily chart, forming a nice symmetrical triangle. Today, the pair broke down through the bottom line of the triangle, offering us a potential short opportunity.  Time will tell us whether this is actually the beginning of a significant move down.

EUR/GBP

Today's action saw the EUR/GBP test a rising trendline serving as support.  This could be a good opportunity, depending on how the next few days unfold.  If the pair respects the trendline, it could be a good long opportunity, especially considering that the general trend since the beginning of August has been up.  On the other hand, if the pair breaks down through the trendline, it might be a good short opportunity (after all, we did have a lower high to start off the month of December).  For now, I'm sitting on the sidelines waiting for this pair to show its hand.

EUR/AUD

EUR/AUD may be forming a bottom after being in a downtrend for months.  The pair appears to be forming the right shoulder of a potential inverse head and shoulders pattern.  Today we saw a strong move up from the most recent bottom, and I'm expecting a move up, at least in the near term.  As always, I could be wrong though.

There's a pin bar forming on the USD/JPY daily chart tonight.  The predominant trend is down, and a nice pin bar has formed at what I'm expecting to be the top of a retracement.  Of course, as always, I could be wrong.  Check out the chart...

I entered a short position in USD/CAD tonight after the pair broke through an area of support around 1.1455 with a nice wide-range body candle.  This plus the overall downtrend on the daily chart was enough for me to put some money on the line and see if it continues its move down.

Here's the daily chart...

• Short Entry:  1.13686
• Initial Stoploss:  1.15101
  

I wanted post an update on the Euro positions I've had open recently.  One has been profitable for me, and the other not so much.

First with the bad...

The EUR/USD short position I took after the pair broke the rising trendline was stopped out on Friday when the pair retraced back above the trendline.  I took a -115 pip hit on both halves of that position.  In the words of Forrest Gump, "that's all I got to say about that."

Now for the good...

The EUR/GBP short I took initially moved in my favor but then retraced and waffled around my entry price for a bit.  Sunday evening I'd had enough and tightened my stop to just above the high for the day.  Overnight Sunday and into Monday morning, the pair began to move lower, and I was able to bank half of my position at 1R for 167 pips.  The other half of my EUR/GBP position is now risk free.

In reviewing my EUR/GBP position tonight, I see a possible low-risk opportunity for adding to my short position shaping up.  The 4 hour chart below shows that we are at the top of a channel, with price giving the appearance of respecting the down trendline.  The overall trend on the daily chart is down, indicated by the top red line.

So, I've entered a sell order just below the low of the current candle on the 4 hour. If price continues to move south, this order will add to my EUR/GBP position.

• Short Entry: 0.8835
• Initial Stoploss: 0.8927