Posts Tagged forex analysis
GoLearnForex Analysis 9/11/2009
Posted by Cedrick Toledano in Uncategorized on November 9th, 2009
Daily Technical Analysis By
USD/JPY:
The Dollar Yen has been relatively volatile as of late. On the chart below there are levels of support and resistance indicated by the bright green horizontal lines. We have now tested 89.90 twice on the close.
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Additionally, the 50 day MA is closing in on that level. If an entire candle sits above the 50 Day MA then we would expect price to move towards the next resistance level at 92.00. However, if the price closes below 89.90 then we would expect a further drop to the next level of support at 88.00.
Lastly, one additional chart to look at is the correlation between the DXY (which is an indexed weight of the dollar, based on a basket of currencies) versus the Yen. What you see since April is that as the DXY has depreciated the JPY has appreciated. If you have a negative dollar bias than you will want to go Long the Yen as we approach S&R.
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USD/CAD
The Canadian Dollar is in a very vulnerable position at this juncture. Fundamentally, the CAD has come under pressure from its own Central Bank as well as recent poor economic data. It completely retraced its mover lower towards Dollar parity.
I looked at the CAD over a number of different tenors from a 4 hour to a Daily to a Weekly. On each of those charts there were technical indications that the CAD maybe in trouble. I will focus on the weekly chart, although I do not trade from a weekly but rather use it for confirmation of trends.
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Based on the chart above there are 3 points that get my attention even before we look at any additional oscillators or indicators or the like. 1) The red rectangular box shows levels congestion or S&R for the CAD. 2) The red lines that make up the ‘v’ shows a complete retrace of the previous move 3) In the square red box you have a “Hammer” shaped candle (although it more so resembles a mallet). A trader who purely uses candles would have closed out his Long CAD position after the formation of the Hammer on a weekly chart.
Looking at the daily chart the CAD is also closing in on the 50 day MA. It is very possible that on poorer than expected economic news from Canada or a firmed greenback that the CAD will touch 1.10 this week.
G-20 Decides Economic Stimulus Will Continue By GoLearnForex
Equity Futures are mostly negative tonight suggesting a slightly lower open. This weekend saw the board of governors from the G-20 assemble. Although a number of important topics were discussed there was agreement amongst the board that economic stimulus should not be removed until further signs of a steadied economy are present.
We closed out last week with a bang as U.S Unemployment printed worse than expected to 10.2%. This obviously concerns investors that if unemployment does not at least bottom it could derail the already fragile economic recovery.
There was a slightly quieter week this week on the data front. We will be watching the Canadian Housing Starts for October. Although we do not expect any surprises here, nonetheless the CAD is quite volatile these days.
Upcoming Forex Events for November 9, 2009
CAD Housing Starts Forecast 155.00K Previous 150.00K
JPY Bank Lending (YoY) Previous 1.60%
GBP RICS House Price Balance Forecast 29.00% Previous 22.00%
AUD NAB Business Confidence Previous 14.00
Analysis by http://www.golearnforex.net
GoLearnForex Analysis 5/11/2009
Posted by Cedrick Toledano in Uncategorized on November 5th, 2009
Forex Trading Analysis by GoLearnForex
EUR/USD:
The EUR is still seeking some direction having just bounced off of support of the 50 day MA. In the daily EUR Chart below we once again are looking to our Fibonacci levels in search of some key handles.
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I believe if we surpass 1.50 as a non-event after having tested that level and broken through it, then entering a small Long EUR position may be in order. If we break the Fibo 76.4% level currently at 1.5162 then I would look to increase the Long EUR position. On the other hand should a EUR candle be contained entirely below the 50 day Moving Average then a Short EUR position could easily be entered into with stops just above the 50 day MA.
USD/CAD
We may continue to see the CAD strengthen against the greenback. Up until a week and half ago the Loonie was on course for dollar parity. If you recall the BOC came out sharply against its own currency essentially causing the CAD to tank.
The daily CAD chart below shows that we have bumped along the 1.0850 handle 7 times since the end of May, and most recently just a couple days ago. If it were not for fear of more BOC market interference this would be a great time to enter a Long CAD position with a stop at CAD support of 1.0850. Additionally, if we see CHF break or hold dollar parity that will bolster CAD strength as it rides the tailwinds since the Canadian economy is substantially less soft than the U.S. If Oil continues to strengthen, that will also add further support to CAD’s continuing firming.
How to Trade Forex When the Global Equity Markets are in the Black
Gold does it again setting a new high to 1,097.72. Oil also broke back over $80 a barrel to an intra-day high of $81.06. Gold advanced following India’s tremendous purchase from the IMF yesterday while Oil strengthened on the back of the Oil Reserve Reports indicating reserves were down in the U.S.
Global Equity Markets were in the black for Wednesday which of course spells trouble for the greenback. The dollar gave up over 1% today to 7 of the G10 currencies. Adding to the dollars troubles was the FOMC announcing that they will continue to keep rates on hold for the foreseeable future, thus enabling the U.S Economy time to rebound.
It will be another busy day on the economic data release front for Thursday. In Switzerland, CPI is set to print while in Australia Trade Balance figures are due out. However, the 2 releases that will garner the most attention are the rate decision from both the ECB and BOE. Although, both are expected to keep rates on hold it will be the accompanying statements that potentially provide the market volatility.
Upcoming Forex Events for November 5, 2009
USD ADP Nonfarm Employment Change Actual -203.00K Forecast -190.00K Previous -227.00K
USD Interest Rate Decision Actual 0.25% Forecast 0.25% Previous 0.25%
NZD Unemployment Rate Actual 6.50% Forecast 6.40% Previous 6.00%
JPY Monetary Policy Meeting Minutes
Analysis by http://www.golearnforex.net
GoLearnForex Analysis 4/11/2009
Posted by Cedrick Toledano in Uncategorized on November 4th, 2009
Gold Hits Big Surge and Reaches New Highs Today by GoLearnForex
Gold surged ahead again today making new highs after hitting 1,088.50 India’s Central Bank bought 200 metric tons of Gold from the IMF. That purchase equates to roughly $6.7 billion, a highly uncommon move by a Central Bank. Oil advanced on the day as well. It is currently holding at $79.50 a barrel.
Global Equity Markets were down Tuesday, although the Dow Jones finished the day nearly flat after giving up 17 points to close at 9771. Futures are mixed heading into Asia and London sessions. Warren Buffet announced today that his company, Berkshire Hathaway would purchase Burlington Northern for $26 billion in a show of confidence in the U.S economy.
In the Forex Markets the Dollar was mixed with the DXY holding steady above 76 for the moment. The RBA raised rates by a quarter point as expected to 3.5%. The AUD was unchanged for the day as the move was already priced in. A number of key data releases are set to print tomorrow in the U.K, New Zealand, and the Euro-zone. However, probably none will be more watched than the Federal Open Market Committee’s interest rate decision and accompanying statements.
Upcoming Forex Events for November 4, 2009
USD MBA Mortgage Applications Previous -12.30%
USD ADP Nonfarm Employment Change Forecast -190.00K Previous -254.00K
USD Interest Rate Decision Previous 0.25% Forecast 0.25%
NZD Unemployment Rate Previous 6.40% Forecast 6.00%
Analysis by http://www.golearnforex.net
GoLearnForex analysis 3/11/2009
Posted by Cedrick Toledano in Uncategorized on November 3rd, 2009
Kiwi Declines Against USD by GoLearnForex
NZD/USD:
The Kiwi declined the most against the Greenback last week, compared to the rest of the G-10. On October 28th the RBNZ kept rates on hold. More damaging to the Kiwi were the accompanying statements from the RBNZ in which they remarked that rates would likely remain on hold through Q2 of 2010.
Six days prior to that announcement NZD struck near the prior day’s high versus the dollar at .7606. Since that day the Kiwi has been in a tail spin. The Chart below is a daily Candle chart of NZD/USD.
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In the white circled area we have a Candlestick that traders refer to as a Hangman. There is a short candle body with a wick hanging down from it. When this is seen during price appreciation it may signal a possible reversal. The candles following the Hangman are lower and that could be confirmation enough to enter a short NZD position.
This pattern appearing out in front of a rate decision may have been traders signaling caution ahead of the announcement. In the end traders were correct and price has continued to decline. One last item to always keep an eye on are the daily Moving Averages. NZD is approaching a close below its 50 day MA. A close below the 50 day MA should put further pressure on the already battered NZD.
USD/CHF:
We have discussed correlations and their importance. Aside from straight technicals and fundamentals often what drives a currency might be its correlation to another instrument, product and or commodity. The Swiss Franc historically has had a very tight correlation to Gold, as one appreciates so does the other and vice versa.
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The Chart below shows the price movement of GOLD and CHF. During Gold’s most recent depreciation (as depicted between the 2 blue lines), you observe the strong correlative effect one exerts on the other. What should grab our attention as Gold has resumed its strength is that the Franc has not. As a trader you should wonder if Gold is overbought or the CHF oversold? Of course keep in mind it is not a perfect correlation of 1, meaning some variation is normal.
US Markets finish the Day Slightly Ahead by GoLearnForex
In Asia, Equity Markets were down while in London and in the U.S markets finished the day slightly ahead. This is coming on the heels of a horrendous close on Friday in the U.S and CIT’s bankruptcy filing over the weekend. Equity Futures in Asia are pointing to a slightly higher open for Tuesday while London Futures are modestly lower.
The Dollar was slightly off against the G-10 mirroring the DJIA small advance today of 77 points. Oil closed today mostly unchanged while Gold soared again to 1,054. In the U.S the ISM Manufacturing figures printed smartly better than expected coming in at 55.7 versus expectations of 53. In addition, the Pending Home sales figures surprised to the upside at 6.1% against expectations of 0%.
This is a busy week for economic data releases. Due out tomorrow will be the RBA Rate decision. The current rate holds at 3.25% and market consensus is looking a quarter point hike to 3.5%. In the U.S, Factory Order numbers are set to print. A positive show will confirm today’s ISM numbers while a below consensus read will cast doubt on the durability of the ISM figures from today.
Upcoming Forex Events for November 3, 2009
GBP Construction PMI Forecast 47.20 Previous 46.70
USD Factory Orders (MoM) Forecast 1.00% Previous -0.80%
AUD AIG Services Index Previous 49.30
GBP Nationwide Consumer Confidence Forecast 72.00 Previous 71.00
Analysis by http://www.golearnforex.net
GoLearnForex Technical Analysis 2-11-2009
Posted by Cedrick Toledano in Uncategorized on November 2nd, 2009
GBP/USD:
The Pound has been range bound for some time. It is trading between 1.6650 and 1.61. Price action above or below those levels has lead to a number of false breakouts. Interestingly enough, if you draw a Fibonacci Retracement from the Pound’s high at 2.1160 in 2007 to the Pound’s low just below 1.35 in 2009, you will notice that the 38.2% Fibonacci level is at 1.6422.
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That level is significant because over the last 6 months we have had more candles extend through this level than above or below it. On the Chart is the 50 day MA in yellow which also had been hovering along the same Fibo line. In October the 50 day MA dipped below the 38.2% Fibo level but price has since recovered in the last week.
Typically price will either trend and break through various Fibonacci levels, or it will range in between 2 Fibonacci levels as it searches for direction. When price hugs a level for a considerable time you expect to see a breakout. We expect to see a shift in this pattern that will cause price to break free of the 38.2% Fibonacci level at 1.6422.
EUR/USD:
The EUR has been holding support at a level equal to its 50 day MA since April 30th. The EUR is now in range to test that level of support. Here is what we are looking for as confirmation of a real move lower.
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We want to see at least a whole candle including its wicks fall between the 50 day and 100 day MA. Additionally, the last lower low we had was at the 1.45 handle. If we break that level we would increase the short position.
If the short entry presents itself we would take PNL at the 1.4225 handle and reevaluate the markets and our positions at that time.
GoLearnForex Fundamental Analysis 2-11-2009
Global Equity Markets were net losers last week. In the U.S the DJIA slid nearly 250 points on Friday. Financials were hit the hardest, lead by concerns over CITI’s balance sheet and CIT’s inability to repay debt and probable bankruptcy filing. An additional behind the scenes market mover was Friday’s fiscal year end for many Mutual Funds.
The Dollar finished the week gaining on 8 of the G-10 currencies with Kiwi the big loser, down 3.96% for the week. Gold finished the week up less than 1% while silver dropped by 4.56%. Oil closed the week at $77 a barrel, roughly $4 off its high.
There are a number of important economic data releases due out this week. 4 major Central Bank will meet this week; the FED, RBA, BOE, and ECB. Only the RBA is expected to raise rates. All eyes will be watching the accompanying statements of Central Bankers. For Monday, ISM Manufacturing numbers in the U.S are set to print. The market is anticipating a slightly higher read for October at 53 versus 52.6 in September.
Upcoming Forex Events for November 2, 2009
CHF SVME PMI Forecast 55.10 Previous 54.30
EUR Manufacturing PMI Forecast 50.70 Previous 50.70
USD ISM Manufacturing Index Forecast 53.00 Previous 52.60
AUD Interest Rate Decision Forecast 3.50% Previous 3.25%
Analysis by http://www.golearnforex.net
GoLearnForex Daily Technical Analysis
Posted by Cedrick Toledano in Uncategorized on October 28th, 2009
USD/CAD:
We have noted several times a formation we refer to as a Step pattern. More commonly this is identified by Lower Lows and Lower Highs and vice versa. We picked up on this pattern emerging on a 4 hours chart. We identified the possible start of this pattern shortly after the BOC publicly declared it’s sentiment for a “weak Canadian Dollar”. We assured you that there would still be time to catch this move even if you could not trade the actual news.
We suggested that you wait for the Step to appear and buy on the dip which was a confirmation of our pattern formation. On the graph that it is depicted near the 3 and a yellow circle. The exit for taking PNL we had at 1.0660 a prior support resistance point.
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EUR/USD:
The Squeeze Play. We talked about this move where we are seemingly forced into a breakout. In one of our earlier pieces we mentioned that our experience told us not to bet on the Squeeze Play, meaning trade against the direction of the existing trend. I must admit we got carried away by the hoopla of crossing 1.50.
So the question you all should pose” is why in this case do you bet against the trend when one of the number one rules of technicians is never bet against the trend”. The answer is based on the number two rule of technicians and that is; trade for the outcome that has the highest statistical probability of occurring. To explain this further lets pose a question. Why didn’t the market make this move a while ago similar to the recent strong moves in CHF & AUD?
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The answer is the Strength of the move was deteriorating in advance of 1.50. Every trader had their eye on 1.50, but obviously no one was a real buyer (for now) otherwise at 1.4830 when momentum started to stall we would have had traders continuing to bid up the EUR. Lastly, when price action was negligible on the big cross of 1.50 that should have been another tip that there were no big orders lined up to continue buying north of 1.50.
We added a MACD to indicate when the momentum started to wane. There are number of overbought tools on your platforms that you can use, from Stochastics and Oscillators to something as simple as the RSI.
Analysis by http://www.golearnforex.net