Tag: Technical Analysis

Daily F.X. Analysis, August 13 – Top Trade Setups In Forex – Eyes on U.S. Jobless Claims!

Post author By Ali B.
Post date 13 August, 2020
1 Comment on Daily F.X. Analysis, August 13 – Top Trade Setups In Forex – Eyes on U.S. Jobless Claims!

On the news front, the eyes will remain on the U.S. Unemployment Claims figures, which are expected to perform slightly better. With this, the U.S. dollar can exhibit more buying, driving gold lower and the dollar higher.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD was closed at 1.17393 after placing a high of 1.18078 and a low of 1.17217. Overall the movement of the EUR/USD pair remained flat throughout the day. The EUR/USD pair took bids and surged above 1.18050 level, but after the release of U.S. economic data, the EUR/USD pair started to decline and posted losses. The pair ended its day on the same level it started its day with and hence, gave a smooth movement throughout the day.

The fresh risk appetite droved the rise in the EUR/USD pair amid the registration of the first coronavirus vaccine from Russia. Russia became the first country to register its vaccine for coronavirus, and this news gave a push to heavy risk appetite in the market.

The stock markets rushed to their higher level on this news, and the riskier currency Euro also gained from it in the early trading session. The gains continued after the release of macroeconomic data from the European side.

At 14:00 GMT, the ZEW Economic Sentiment for Eurozone in August surged to 64.0 against the expected 55.3 and supported the single currency. The ZEW Economic Sentiment for Germany surged to 71.5 from the anticipated 57.0 and supported Euro. The better than expected economic sentiment for the month gave strength to a single currency and pushed EUR/USD pair above 1.18050 level.

However, the gains could not last for long as the U.S. President Donald Trump announced that he was very seriously considering a capital gains tax cut to help job creation. If Trump gave another executive order on capital taxation, it would likely face legal challenges as it would push the boundaries of the President’s executive orders.

Daily Technical Levels

Support	Pivot	Resistance
1.1722	1.1769	1.1828
1.1664		1.1874
1.1617		1.1933

EUR/USD– Trading Tip

The EUR/USD has traded with bullish sentiment at 1.1805 level, holding right below an immediate resistance level of 1.1815. Below this, the pair is likely to trade bearish until 1.1783 and 1.1745 level. Conversely, the bullish breakout of the 1.1815 level can lead the pair further higher until the 1.1890 level. Let’s keep an eye on 1.1815.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.30470 after placing a high of 1.31318 and a low of 1.30413. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair dropped on Wednesday and posted losses as the unemployment benefits claims surged in the local country and also because of the strength of the U.S. dollar onboard.

At 04: 01 GMT, the BRC Retail Sales Monitor from Great Britain surged to 4.3% from the expected 2.5% and supported British Pound. At 11:00 GMT, the Claimant Count Change for July rose to 94.4K from the expected 9.7K and weighed heavily on British Pound. The Unemployment Rate from the U.K. came in as 3.9% in June and fell short of expectations of 4.2% and supported GBP.

The clamant count change from the U.K. that showed that more people claimed for unemployment benefits in July. According to the Office of National Statistics, around 730,000 people have become unemployed since March this year, and since June, further 114,000 people have lost their jobs.

However, the jobless rate remained flat at 3.9% in June; this reflected that the number of people who had given up looking for work increased.

The ONS Deputy national statistician, Jonathan Athow, said that the labor market had continued its recent fall in employment and significantly reduced work hours because many people were furloughed.

The people without a job and those who were not even looking for a job but wanted to work increased as the demand for workers was depressed.

It is also believed that the full extent of Britain’s’s job problems has been hidden under the Government’s furlough scheme, which promised to cover 80% of the salaries of workers who could not work due to lockdown.

Daily Technical Levels

Support	Pivot	Resistance
1.3002	1.3035	1.3066
1.2971		1.3099
1.2938		1.3130

GBP/USD– Trading Tip

The GBP/USD consolidates at 1.3070 level, holding right above the 50 periods EMA support area of 1.3040 level while the bearish breakout of 1.3040 level can extend selling unto 1.2918 level. Recently as we can see in the chart above that the GBPUSD pair has violated its upward trendline that supported the pair around 1.3130 level, and now below this, we can expect GBP/USD to continue trading bearish. The GBP/USD should show a bearish crossover to confirm a strong selling bias in the Cable. On the higher side, Sterling may find resistance at 1.3105 and 1.3175. Let’s consider selling below 1.3045 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.491 after placing a high of 106.682 and a low of 105.870. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair extended its previous day gains and rose for the 3rd consecutive day amid increased risk appetite in the market. The Russian vaccine, U.S. Stimulus package, Trump’s executive orders, and the rise of the equity market drove Wednesday’s move of USD/JPY pair.

The President of Russia, Vladimir V. Putin, announced that the Russian government had approved the world’s first coronavirus vaccine. Putin said that his daughter had taken the vaccine in a cabinet meeting, and it has worked adequately enough to declare it safe.

However, global health authorities have said that the vaccine has to complete the last stage of clinical trials to be approved. Despite this, Mr. Putin thanked the scientists in a congratulatory note to the nation who developed the vaccine. He also said that it was “the first” very important step for Russia and generally for the whole world.

Scientists in Russia and other countries said that rushing to offer the vaccine before final-stage testing could backfire. Tens of thousands of people are included in the final stage of trials, and it could take months to prove its effectiveness.

However, investors cheered the news of the vaccine as it was long-awaited, and as in result, the risk appetite of the market rose. The equity markets surged that weighed on the safe-haven Japanese Yen, which ultimately pushed the USD/JPY pair higher, which keeps challenges the upbeat market tone. In the meantime, the White House National Security Adviser Robert O’Brien blamed China while saying that the “Chinese hackers have been targeting U.S. election infrastructure ahead of the 2020 presidential election.” These gloomy updates capped further upside in the currency pair by giving support to the safe-haven Japanese yen.

Later today, the eyes will remain on the U.S. Jobless claims data to determine further trends in the USD/JPY pair.

Daily Technical Levels

Support	Pivot	Resistance
106.5500	106.7900	107.1400
106.2100		107.3700
105.9700		107.7200

USD/JPY – Trading Tips

The USD/JPY trades sideways over resistance become support level of 106.628 level. Above this, the USD/JPY pair is opening further room for buying until 107.450 level. The RSI and MACD are also supporting bullish bias in the pair. A recent bullish breakout of 106.450 level can extend the buying trend until 107.390. The current market price of USDJPY is staying over 50 EMA, which extends support at 105.950 and may push the pair higher. Let’s consider buying above 106.480 level today. Good luck!

Tags Forex Broker, forex services, Forex Trading, GBP-USD, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, Trade Setup, USDJPY

Crypto Market Analysis

Daily Crypto Review, August 13 – Crypto Loans Entering the Market; Bitcoin Temporarily Stuck at $11,600

Post author By Ilija Rankovic
Post date 13 August, 2020
1 Comment on Daily Crypto Review, August 13 – Crypto Loans Entering the Market; Bitcoin Temporarily Stuck at $11,600

The cryptocurrency market had a day where almost no cryptocurrencies ended up in the red. Even though the gains were mostly small, only five cryptocurrencies lost in the past 24 hours. Bitcoin is currently trading for $11,582, which represents an increase of 1.88% on the day. Meanwhile, Ethereum gained 4.37% on the day, while XRP gained 1.11%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Numeraire gained 161.01% on the day, making it the most prominent daily gainer. Aragon (90.43%) and BitShares (41.67%) also did great. On the other hand, Divi lost 4.38%, making it the most prominent daily loser. It is followed by Compound’s loss of 2.5% and Aave’s loss of 1.85%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has decreased slightly since we last reported, with its value currently at 60.84%. This value represents a 0.53% difference to the downside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market cap experienced a major increase in value since we last reported. Its current value is $358.92 billion, which represents an increase of $13.32 billion when compared to yesterday’s value.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

After a day of sharp decline, Bitcoin spent the day trying to restore the lost value. However, while the largest cryptocurrency by market cap did gain a few percent and rose to $11,600 levels, the $11,630 resistance seems to be holding the price in place quite well. Bitcoin will need to pass this level confidently (and soon), or BTC bears will consider this the start of a bear move.

BTC traders should look for an opportunity when BTC crosses $11,630.

BTC/USD 4-hour Chart

Technical factors:

Price is currently below its 50-period EMA but above its 21-period EMA
Price is slightly above its middle B.B
RSI is neutral (48.49)
Volume is decreasing

Key levels to the upside Key levels to the downside

1: $11,630 1: $11,460

2: $12,000 2: $11,090

3: $12,300 3: $10,850

Ethereum

Ethereum had a slightly better day than its rival Bitcoin in terms of gains, as it returned to the level it was on the night before the selloff. However, the $400 level seems like it has great resistance, and it is yet unknown whether ETH will be able to break it. The move that will break $400 needs to be extremely strong, and it will most likely be caused by BTC’s move to the upside.

Traders should look for an opportunity when Ethereum breaks $400 or collapses after failing to do so.

ETH/USD 4-hour Chart

Technical Factors:

Price is above its 21-period EMA and its 50-period EMA
Price is between its middle and top B.B.
RSI is elevated (58.91)
Volume is average

Key levels to the upside Key levels to the downside

1: $400 1: $361

2: $415 2: $340

3: $496 3: $302

Ripple

Unlike Bitcoin and Ethereum, XRP did not have such a good day today. The third-largest cryptocurrency by market cap did end up in the green on the day, but it failed to break the $0.285 level. Breaking this level is key to pushing further towards the upside, but the 21-period and 50-period moving average are also above the price and very near $0.285, making it incredibly difficult for XRP to move towards the upside.

Traders can look for an opportunity right after XRP breaks $0.285.

XRP/USD 4-hour Chart

Technical factors:

Price is below its 21-period and 50-period EMA
Price is slightly below its B.B.
RSI is neutral (42.19)
Low volume

Key levels to the upside Key levels to the downside

1: $0.285 1: $0.266

2: $0.31 2: $0.245

3: $0.32 3: $0.235

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Basic Strategies

Let’s Learn Some Momentum Trading Techniques Using The Awesome Oscillator

Post author By Reddy Shyam Shankar
Post date 12 August, 2020
No Comments on Let’s Learn Some Momentum Trading Techniques Using The Awesome Oscillator

Introduction

Bill Williams was the one to first developed the Awesome Oscillator, and it essentially indicates the market momentum. On the other hand, RSI (Relative Strength Index) is a trading indicator that provides an idea of the overbought and oversold zone. In the Awesome Oscillator based trading strategy, we will use the Awesome Oscillator to determine the market direction and use the RSI to increase the probability by eliminating unwanted market movements.

The Awesome Oscillator

Bill Williams has created the Awesome Oscillators to identify the market momentum of a currency pair. Besides the forex market, this trading strategy works well in all financial markets, including the stock, indices, cryptocurrencies, and commodities. The elements of this trading indicator are pointed out in the image below.

The first element of Awesome Oscillator is the 34 period’s simple moving average indicating the median of the last 34 candlesticks.
5-period simple moving averages indicate the median of the last five candlesticks.
Histogram and Zero Line.

Let’s have a look at how these elements represent in a market:

When the Awesome Oscillator is below the zero lines, we should focus on the short term moving average. If the 5 SMA moves below the 34 SMA, it will indicate a downtrend.
If the position of Awesome Oscillator is above the zero lines, we can consider the trend as an uptrend.
If the Awesome Oscillator histogram moves to the green zone, we can consider the candlestick that moved higher than the previous candle.
We will consider the histogram at the red zone that is smaller than the previous candlestick.
The rules mentioned above are not exact buying and selling signals. Instead, it provides a trading opportunity where traders should consider other confirmations.

We can also identify the divergence between the price and the Awesome Oscillator to find a trading opportunity.

If you see the price of a currency pair to make a lower low from the left side to the right side, but the Awesome Oscillator makes the opposite, you can find a potential divergence. In divergence, the Awesome Oscillator should create two peaks above the zero lines considering the market condition.

Awesome Oscillator with RSI Trading Strategy

In this trading strategy, we will combine the Awesome Oscillator to identify the market momentum and the Relative Strength Index to get the overbought or oversold zone. If we can combine these accurately, we can make a trading strategy that can provide a good profit.

This strategy works very well in most of the currency pairs and time frames. Therefore, we can take swing trade, day trade, and even position trade. Besides the technical formation using these two indicators, we will use price action to enter the trade. Moreover, we will use stop loss and take profit as a risk management tool before taking the trading decisions.

Now let’s move to the trading strategy. In the image below, we can see the visual representation of how to trade using the Awesome Oscillator RSI trading strategy. The rules for buying and selling of a currency pair are mentioned below:

Buy Trade Setup

At first, the RSI should be below the 30 levels and point to an upward reversal.
When the RSI moves above the 30 levels, we will consider buying signals only if the Awesome Oscillator shows a green bar.
When the green bar appears, we can place a buy stop about 2- 5 pips above the current candlestick and allow the price to take our trade automatically.
Sometimes RSI might signal 1-2 candlestick later than the Awesome Oscillator. In that case, we can consider trading entry by taking a smaller lot.

Sell Trade Setup

At first, the RSI should be above the 70 levels and point to a downward reversal.
When the RSI moves below the 70 levels, we will consider selling signals only if the Awesome Oscillator shows a red bar.
When the red bar appears, we can place a sell stop about 2- 5 pips below the current candlestick and allow the price to take our trade automatically.
Sometimes RSI might signal 1-2 candlestick later than the Awesome Oscillator. In that case, we can consider trading entry by taking a smaller lot.

In this strategy, we did not consider the histogram crossing zero lines. However, suppose you want to increase the probability of your trading. You can look at the zero line cross as a further trading condition that will indicate the overbought and oversold zone.

Stop Loss And Take Profit Idea

The stop loss and take profit idea is a vital element of any trading strategy. There are many ways to set take profit and stop-loss depending on the market swing low and Sewing high. In a buy trade setup, the stop loss should be below the recent swing low with 10 to 15 pips buffer. Similarly, in a sell trade, the stop loss should be above the recent swing high with 10 to 15 pips buffer.

Another idea of a stop-loss plan is to set it at 1.5X ATR. It will indicate the actual volatility of the currency pair that you are trading. Besides the stop-loss setting, take profits can be set with a multiple-level approach. You can hold your position until the Awesome Oscillator crossed above or below the zero lines. Later on, you can monitor the momentum of the price to identify the next take profit level.

Summary

Let’s summarise the awesome oscillator and RSI trading strategy:

If the RSI is above the 70 levels and points downward movement, we will consider selling setups only, and if the RSI starts to move from the 30 levels, we will consider buying only.
To enter the trade, we can take a pending order above or below the previous candle if other conditions meet.
The stop loss should be below the swing low or swing high with some buffer or at 1.5 X ATR.
For setting take profit, you can hold the trade until the Awesome Oscillator crosses above or below the zero lines. Moreover, if the market conditions allow you to extend the take profit.

In every trading strategy, trade management is an essential tool that a trader should not ignore. In the forex market, we anticipate the price based on our technical and fundamental analysis. As we trade on probabilities, there will be conditions where the market will hit our stop loss. Therefore, strong trade management is the only way to keep your balance steady growth.

Tags Awesome Oscillator, Education, Forex, Forex price action, Forex Trading, Indicator Based Trading, Oscillator, RSI, Technical Analysis, Technical Trading, trading

Forex Signals

EUR/USD Manual Close at 20 Pips Loss – Reason Explained!

Post author By Ali B.
Post date 12 August, 2020
No Comments on EUR/USD Manual Close at 20 Pips Loss – Reason Explained!

The EUR/USD pair traded in a bearish mode earlier today when we opened a sell trade at 1.17132. However, every soon, the market sentiment started to change, and the EUR/USD pair started forming a bullish setup. We decided to cut the minor loss in the EUR/USD pair, instead of keeping it until it hit loss.

As we see now, the EUR/USD has formed three white soldiers’ candlestick patterns suggesting strong bullish bias in the EUR/USD pair. On the higher side, the EUR/USD may head further higher until the 1.1799 level. The hope provided by Trump raised US dollar bars in the market, and that pulled EUR/USD pair from its daily high to below 1.1800 level.

Meanwhile, the risk sentiment was also disturbed by the fears of escalating China-US tensions, as China announced that it would also impose sanctions on 11 Americans in retaliation to the US same sanctions on Hong Kong & Chinese officials. The list of Americans to be sanctioned by China included Senator Macro Rubio and Ted Cruz also.

The faded risk sentiment weighed on EUR/USD pair and pair started to lose its daily gains.

At 17:30 GMT, the Core PPI from the US for July rose to 0.5%from the 0.1% of expectations and supported the dollar. The PPI for July also rose to 0.6% from the expected 0.3% and came in favor of the dollar.

The better than expected PPI data from the US added strength to the US dollar and added pressure to EUR/USD pair, causing it to lose all daily gains and close at the same level the market was opened.

The EUR/USD is trading at 1.1790 level, heading to test the triple top resistance level of 1.1800 level. The closing of candles below 1.1800 level can drive more selling in the pair until the 1.1760 level is met. On the higher side, the EUR/USD pair may find resistance at 1.1835 level after 1.1800 level. In contrast, support continues to stay at 1.1759. Let’s wait for the next entry from our side. Good luck!

Tags EUR-USD, EURUSD, Forex, Forex Trading, Fundamental Analysis, Technical Analysis, Technical Outlook

Forex Signals

Gold Signal Offers Another +150 Pips Profit – What’s Next?

Post author By Ali B.
Post date 12 August, 2020
No Comments on Gold Signal Offers Another +150 Pips Profit – What’s Next?

Earlier today, we managed to close another exciting trade in gold, capturing 153.6 green pips. The precious metal gold bounced back over $1,900 per ounce as soft U.K. data revived concerns across a the coronavirus-driven economic slowdown and backed bullion erase primary losses fired by a resurgent dollar.

Emphasizing the economic loss produced by the pandemic, data revealed Britain’s economy contracted by a record of 20.4% between April and June, the most significant reduction announced by any major economy so far.

Despite the reducing number of virus cases in the U.S., the doubts remain about the U.S. economic recovery. As per the latest report, the COVID-19 crossed over 20 million cases reported as of August 11 as per the Johns Hopkins University data. But Texas, New York, and California reported declining numbers of hospitalizations.

Apart from the virus woes, the long-lasting tussle between the world’s two largest economies remained on the cards as bt nation fired shoots each other. It is worth restating that the Dragon Nation took revenge from the U.S. by imposing the sanctions on 11 American yesterday. The move comes after the U.S. sanctioned 11 Chinese officials and their allies in Hong Kong, including Hong Kong’s Chief Executive Carrie Lam. This statement capped the further upside in the equity market and helped gold prices to gain a bit of support.

Despite the intensifying conflict between US-China, the PBOC Governor expressed an upbeat tone while saying, “China will continue implementing the phase-one economic and trade agreement with the United States. This statement gave some breath to the investors.

On the technical side, the precious metal gold has tested the upward trendline support level of 1,877 level. Closing above this trendline is also suggesting buying trends in the gold. We took a buy trade at 1893.06 with a stop loss at 1894.42 and took profit at 1908.42. For now, the gold is holding at 1,932 level, and gold is facing resistance at 1,940. Above this, the next resistance stays at 1,955 level. Let’s wait for the market to extend another goos setup, and we will share the next trading signal. Stay tuned.!

Tags Forex, Fundamental Analysis, Gold, Technical Analysis, XAU/USD

Forex Market Analysis

Daily F.X. Analysis, August 12 – Top Trade Setups In Forex – Stronger Dollar Continues to Play!

Post author By Ali B.
Post date 12 August, 2020
No Comments on Daily F.X. Analysis, August 12 – Top Trade Setups In Forex – Stronger Dollar Continues to Play!

On the news side, the eyes will remain on the UK GDP and U.S. CPI figures. U.S. inflation is expected to drop, and it can impact the U.S. dollar negatively. Conversely, the UK GDP figures are anticipated to have improved, but the prelim GPD seems to perform badly. A mixed response can be seen in news releases.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17393 after placing a high of 1.18078 and a low of 1.17217. Overall the movement of the EUR/USD pair remained flat throughout the day.

In the first session of Tuesday, EUR/USD pair took bids and surged above 1.18050 level, but after the release of U.S. economic data, the EUR/USD pair started to decline and posted losses. The pair ended its day on the same level it started its day with and hence, gave a smooth movement throughout the day.

Daily Technical Levels

Support	Pivot	Resistance
1.1704	1.1756	1.1790
1.1670		1.1842
1.1618		1.1876

EUR/USD– Trading Tip

The EUR/USD pair is trading at 1.1720 level, testing the triple bottom support level of 1.1714 level. Closing of candles below 1.1710 level can drive more selling in the pair until 1.1639 level. On the higher side, the EUR/USD pair may find resistance at 1.1793 level. Three black crows on the 4-hour timeframe are suggesting odds of selling trend continuation in the EUR/USD.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30470 after placing a high of 1.31318 and a low of 1.30413. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair dropped on Tuesday and posted losses as the unemployment benefits claims surged in the local country and also because of the strength of the U.S. dollar onboard.

The most important data on Tuesday was the clamant count change from the U.K. that showed that more people applied for unemployment benefits in July. According to the Office of National Statistics, around 730,000 people have become unemployed since March this year, and since June, further 114,000 people have lost their jobs.

However, the jobless rate remained flat at 3.9% in June; this reflected that the number of people who had given up looking for work increased.

The ONS Deputy national statistician, Jonathan Athow, said that the labor market had continued its recent fall in employment and significantly reduced work hours because many people were furloughed.

The people without a job and those who were not even looking for a job but wanted to work increased as the demand for workers was depressed.

Daily Technical Levels

Support	Pivot	Resistance
1.3016	1.3074	1.3107
1.2983		1.3165
1.2925		1.3197

GBP/USD– Trading Tip

On Tuesday, the GBP/USD consolidates at 1.3067 level, holding right above the 50 periods EMA support area of 1.3040 level while the bearish breakout of 1.3040 level can extend selling unto 1.2918 level. Recently as we can see in the chart above that the GBPUSD pair has violated its upward trendline that supported the pair around 1.3130 level, and now below this, we can expect GBP/USD to continue trading bearish. The GBP/USD should show a bearish crossover to confirm a strong selling bias in the Cable. On the higher side, Sterling may find resistance at 1.3105 and 1.3175. Let’s consider selling below 1.3045 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.491 after placing a high of 106.682 and a low of 105.870. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair extended its previous day gains and rose for the 3rd consecutive day on Tuesday amid increased risk appetite in the market. The Russian vaccine, U.S. Stimulus package, Trump’s executive orders, and the rise of the equity market drove Tuesday’s move of USD/JPY pair.

In the early session of Tuesday, the President of Russia, Vladimir V. Putin, announced that the Russian government had approved the world’s first coronavirus vaccine. Putin said that his daughter had taken the vaccine in a cabinet meeting, and it has worked adequately enough to declare it safe.

As a result of the upbeat U.S. data, the broad-based U.S. dollar succeeded in gaining some positive traction on the day. Still, the bullish bias in the U.S. dollar is expected to be short-lived as doubts remain about the U.S. economic recovery amid on-going coronavirus cases. However, the gains in the U.S. dollar became the key factor that kept the currency pair higher.

Daily Technical Levels

Support	Pivot	Resistance
106.0400	106.3700	106.8200
105.5900		107.1500
105.2600		107.6000

USD/JPY – Trading Tips

The USD/JPY trades sharply bullish to break out of the sideways trading range of 106.480 – 105.440. Bullish crossover of 106.480 level is opening further room for buying until 107.450 level. The RSI and MACD are also supporting bullish bias in the pair. A recent bullish breakout of 106.450 level can extend the buying trend until 107.390. The current market price of USDJPY is staying over 50 EMA, which extends support at 105.950 and may push the pair higher. Let’s consider buying above 106.480 level today. Good luck!

Tags Daily Brief, EUR-USD, Forex, Fundamental Analysis, GBP-USD, Support and Resistance, Technical Analysis, Technical Outlook, trading, USD-JPY

Crypto Market Analysis

Daily Crypto Review, August 12 – Crypto Selloff Brings Bitcoin to $11,000 Mark; What’s Next?

Post author By Ilija Rankovic
Post date 12 August, 2020
No Comments on Daily Crypto Review, August 12 – Crypto Selloff Brings Bitcoin to $11,000 Mark; What’s Next?

The cryptocurrency market was in the red in the past 24 hours, with most altcoins’ prices falling down over 5%. Bitcoin is currently trading for $11,375, which represents a decrease of 4.05% on the day. Meanwhile, Ethereum lost 4.84% on the day, while XRP lost 7.59%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Compound gained 31.08% on the day, making it the most prominent daily gainer. Swipe (16.13%) and Maker (12.37%) also did great. On the other hand, Band Protocol lost 16.42%, making it the most prominent daily loser. It is followed by yearn.finance’s loss of 14.86% and Nervos Network’s loss of 14.41%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has increased slightly since we last reported, with its value currently at 61.39%. This value represents a 0.17% difference to the upside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market cap experienced a major decrease in value since we last reported. Its current value is $345.60 billion, which represents an increase of $7.98 billion when compared to yesterday’s value.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin experienced a large selloff as a result of bulls failing to successfully break the $12,000 mark. The largest cryptocurrency by market cap fell to $11,090 support level before rallying slightly to $11,400 levels. However, Bitcoin might have another bullish move as the RSI is dangerously close to the oversold territory while the volume is high, and since the $11,090 support level held up nicely, Bitcoin confirmed it almost certainly will not go below.

BTC traders should look for an opportunity when BTC makes another move towards the upside and breaks $11,460.

BTC/USD 4-hour Chart

Technical factors:

Price is currently below its 50-period EMA, as well as its 21-period EMA
Price is above its lower B.B
RSI is near the oversold territory (35.52)
Volume is decreasing from above-average levels

Key levels to the upside Key levels to the downside

1: $11,460 1: $11,090

2: $11,630 2: $10,850

3: $12,000 3: $10,500

Ethereum

Ethereum also experienced a selloff, partly because of not being able to go past $400 and partly because of Bitcoin’s move towards the downside. The price broke the triangle formation to the downside (as we said in the previous article) as there was not enough pressure for it to get past the $415 mark. The second-largest cryptocurrency by market cap tested the $361 support, which held up nicely and did not let ETH fall below. Ethereum is now at the $375 mark and is showing no signs of dropping further below.

Traders should look for a trade opportunity when Ethereum makes a bounce towards the upside or falls below $361.

ETH/USD 4-hour Chart

Technical Factors:

Price is below its 21-period EMA and its 50-period EMA
Price is at its bottom B.B.
RSI is near the oversold territory (33.99)
Volume is average

Key levels to the upside Key levels to the downside

1: $400 1: $361

2: $415 2: $340

3: $496 3: $302

Ripple

XRP was no different than Bitcoin and Ethereum in terms of the direction of its movement throughout the day, but it did differ in terms of intensity of the move. The third-largest cryptocurrency by market cap lost over 8% of its value at one point, as bears took over the market when XRP couldn’t break $0.31. The price fell to as low as $0.266 but quickly recovered to its current position ($0.278).

Traders can look for an opportunity to trade after XRP breaks $0.285.

XRP/USD 4-hour Chart

Technical factors:

Price is below its 21-period and 50-period EMA
Price is slightly above its bottom B.B.
RSI is near the oversold territory (35.64)
Low volume (slightly increased)

Key levels to the upside Key levels to the downside

1: $0.285 1: $0.266

2: $0.31 2: $0.245

3: $0.32 3: $0.235

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, August 11 – Top Trade Setups In Forex – Stronger Dollar In Play!

Post author By Ali B.
Post date 11 August, 2020
1 Comment on Daily F.X. Analysis, August 11 – Top Trade Setups In Forex – Stronger Dollar In Play!

On the news front, the economic calendar is a bit light and may not be offering any major economic release. Therefore, we need to trade based upon stronger dollar sentiment, as traders are likely to price better than expected NFP data from last week.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17363after placing a high of 1.18005 and a low of 1.17358. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair extended its previous day’s losses on Monday amid the strong U.S. dollar and increasing US-China tensions. The main driver of the EUR/USD pair on Monday was the U.S. dollar.

The U.S. Dollar was strong across the board with the U.S. Dollar Index at 93.5 level, with investors taking comfort from President Donald Trump’s move to boost the economy in the wake of coronavirus pandemic.

Over the weekend, U.S. President Trump signed a series of executive orders aimed at enhancing the economic condition. The orders included an extension of expanded jobless benefits at a lower rate of $400 a week. It was down from the previous $600 a week. The State government will pay 1/4th of the bill, which was also included in Trump’s order.

However, it is not clear that the executive orders can withstand court scrutiny as the power relies on Congress. Nevertheless, the President’s orders were an attempt to play his part in breaking the impasse. Though the talks between Republicans & Democrats on August 7 broke some of the differences, they still did not show any consensus. The new round of talk is expected to resume at some point, but the date is not yet confirmed.

The chances for a $3 trillion stimulus package have been compromised to $2 trillion by Democrats, but that is still a trillion more than the framework that the ruling party aimed for. Additionally, the JOLTS Job Openings data from the U.S. on Monday came in as 5.89 M in June in comparison to 5.30M of forecasts and supported the U.S. dollar that weighed on EUR/USD pair.

From the Europe side, the Sentix Investor Confidence for August dropped to -13.4 from the anticipated -16.0 and the previous -18.2 and supported Euro that kept the losses of EUR/USD pair limited on Monday.

Meanwhile, early on Monday, the Defence Ministry of Taiwan said that a Chinese jet fighter crossed the median of the Taiwan Strait line, possibly in response to the U.S. Health Secretary Alex Azar’s visit to Taipei.

Any form of American recognition of the island nation Taiwan that China claimed its own make Beijing angry, and hence, it responded. The tensions in Taiwan have grown since the Hong Kong clash between the U.S. & China.

Besides this, the world’s biggest nations are also clashing over the technological front; recently, the U.S. banned American firms from dealing with TikTok and WeChat app. However, the most important matter between both countries lies with the fulfillment of the phase-one trade deal. Negotiators from both sides are scheduled to meet this week to analyze the achievements of the deal. The risk-off market sentiment was picking its pace after the escalation of US-China tensions, and it has weighed on the riskier pair EUR/USD.

Daily Technical Levels

Support	Pivot	Resistance
1.1713	1.1758	1.1780
1.1691		1.1825
1.1646		1.1848

EUR/USD– Trading Tip

The single currency Euro slipped against the U.S. dollar amid increased USD demand as traders started to price in stronger than expected NFP data released on Friday. The EUR/USD is now bouncing off the support level of the 1.1728 level. It may head higher towards 23.6% Fibonacci retracement level of 1.1768, and above this, the next resistance can stay at 1.1765 level, which marks 38.2% Fibonacci retracement level.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30730 after placing a high of 1.31032 and a low of 1.30188. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair rose on Monday ahead of key data due later this week, despite the U.S. dollar’s strength. The risk sentiment favored some of the factors, and investors believe that further upside could be on the horizon.

The latest higher move in the Pound was because of the key economic data, including the update of the labor market and second-quarter GDP scheduled to be released later this week. Moreover, the GBP/USD pair was also supported by the improving risk sentiment in the market after the hopes about the US-China phase-one trade deal became optimistic.

The U.S. trade representative and U.S. Treasury Secretary will meet the Chinese Vice Premier later this week to evaluate the implementation of the phase-one trade deal by China. China has assured that it will fulfill its promises made under the agreement that include the increased U.S. farm purchases and the better protection of Intellectual property rights.

This faded some of the risk-off market sentiment and caused GBP/USD to surge.

The risk sentiment was backed by the comments of WHO Chief Scientist Dr. Soumya Swaminathan, who praised the global efforts in the development of the COVID-19 vaccine. She reported that almost 200 vaccines were being developed globally and were in the stage of clinical or pre-clinical trials. According to her, 24 vaccines had entered the clinical trials in human beings.

The unprecedented global efforts to develop the coronavirus vaccine triggered the risk-on market sentiment as various potential paths to the end of coronavirus gave hope to the investors. The improved risk appetite gave a push to GBP/USD pair on Monday.

On Brexit front, the U.K. media has suggested that David Frost remain the U.K.’s chief Brexit negotiator and will stay on committed to securing an agreement with the European Union even if a deal is not secured by the end of September.

The U.K. formally left the E.U. in January after voting to leave in 2016, and negotiations to reach post-Brexit trade deal are currently deadlocked because both sides have failed to reach a consensus on various matters.

As the end of the transition periods is getting closer day by day, Prime Minister Boris Johnson has vowed to end the year with or without a deal, outside Europe. David Frost is set to take up a new position as National Security Advisor (NSA) in September. However, his position as Chief Brexit Negotiator will remain in place.

Meanwhile, the U.K. government pledged a further 20 Million Pounds in aid to Lebanon following Tuesday’s deadly explosion in Beirut. The U.K.’s support will directly go to the injured and people displaced by the explosion. It will also provide food, medicine, and urgent supplies to the needy in Lebanon affected by the explosion.

The U.K. government has already given 5 Million Pound to the emergency relief effort and said that it would stand by the Lebanese people in the hour of need. This also helped GBP in recovering its position and pushed GBP/USD pair higher on Monday.

Daily Technical Levels

Support	Pivot	Resistance
1.3024	1.3064	1.3110
1.2978		1.3150
1.2938		1.3196

GBP/USD– Trading Tip

USD/JPY – Daily Analysis

The USD/JPY currency pair succeeded to break its previous session thin trading range and rose above 106.00 marks mainly due to the broad-based U.S. dollar fresh strength, buoyed by the Friday’s better-than-expected employment report, which eventually helped the U.S. dollar to put the bids.

On the other hand, the upbeat market sentiment, backed by the optimism that the U.S. policymakers are showing signs to resume talks about the stimulus package, undermined the safe-haven Japanese yen and contributed to the pair’s gains. In the meantime, the risk-on market sentiment was further bolstered by the upbeat key U.S. and China data, which tends to urge buyers to invest in riskier assets instead of safe-have assets. Currently, the USD/JPY currency pair is currently trading at 106.00 and consolidating in the range between 105.72 – 106.06.

Despite concerns about the ever-increasing coronavirus cases across the world and worsening US-China relations, the investors continued to cheer the hopes of the U.S. fiscal stimulus package triggered by the signs that White House officials and congressional Democrats showed a willingness to compromise on another stimulus package to bolster the stalled economy.

On the other hand, U.S. President Donald Trump fulfilled his promise to take executive action as the U.S. Congress failed to offer any outcome over the country’s latest stimulus measures. As a result, U.S. President Trump’s signed four executive orders to release unemployment claim benefits, help with student loans, and aid those living in a rented house, which also exerted a positive impact on the market trading sentiment and contributed to the currency pair losses.

Moreover, the upbeat market sentiment was being supported by Friday’s better-than-expected employment report. Details suggested Non-farm payrolls increased by 1.763 million in July month, vs. the estimated 1.6 million increase. The unemployment rate also declined to 10.2% in July, compared to June’s reading of 10.5%.

Despite the positive data, the doubts remain about the U.S. economic recovery amid the on-going surge in the coronavirus cases. As per the latest report, the U.S. crossed the five million COVID-19 cases as of August 10, according to Johns Hopkins University. Whereas Australia’s 2nd-most populous state, the epicenter of the pandemic, Victoria, reported the biggest single-day rise in deaths. As per the latest figures, Australia’s coronavirus death losses crossed 314 as Victoria announces a daily record of 19 deaths and 322 new cases in the past 24 hours.

Apart from the virus woes, the long-lasting struggle between the world’s two largest economies remained on the cards as U.S. President Donald Trump turned off the business tap for China’s TikTok and WeChat. As well as, the U.S. imposed sanctions on the Hong Kong Leader Carry Liam, which keeps challenges the upbeat market tone. In the meantime, the White House National Security Adviser Robert O’Brien blamed China while saying that the “Chinese hackers have been targeting U.S. election infrastructure ahead of the 2020 presidential election.” These gloomy updates capped further upside in the currency pair by giving support to the safe-haven Japanese yen.

Daily Technical Levels

Support	Pivot	Resistance
105.6900	105.9500	106.1900
105.4500		106.4500
105.1900		106.7000

USD/JPY – Trading Tips

The USD/JPY has made a slight bullish recovery from 105.780 to 106.150 area, especially after examining the 38.2% Fibonacci support level of 105.650. A bullish breakout of 106.467 resistance level can drive more buying until the next resistance area f 107.198. On the lower side, the USD/JPY may find support at 105.600 and 105.078, extended by the 38.2% and 61.8% Fibonacci retracement level. The current market price of USDJPY is staying over 50 EMA, which extends support and may push the pair higher. Let’s consider buying above 105.750 level today. Good luck!

Tags Daily Brief, EUR-USD, EURUSD, Forex, forex services, Forex Trading, Fundamental Analysis, GBP-USD, GBPUSD, Price Action, Support and Resistance, Technical Analysis, trading, USD-JPY, USDJPY

Crypto Market Analysis

Daily Crypto Review, August 11 – yEarn Finance Token Explodes After Binance Listing; BTC Hashrate Unaffected by the Price Upswing

The cryptocurrency market tried to catch up to Bitcoin after it pushed up yesterday. Bitcoin is currently trading for $11,938, which represents an increase of 1.26% on the day. Meanwhile, Ethereum gained 1.27% on the day, while XRP lost 4.73%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, yearn.finance gained 50.03% on the day, making it the most prominent daily gainer. JUST (39.71%) and Terra (28.27%) also did great. On the other hand, Balancer lost 13.90%, making it the most prominent daily loser. It is followed by Band Protocol’s loss of 9.52% and iExec RLC’s loss of 6.35%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has decreased slightly since we last reported, with its value currently at 61.22%. This value represents a 0.56% difference to the downside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market cap has increased since we last reported. Its current value is $363.58 billion, which represents an increase of $0.89 billion when compared to yesterday’s value.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day trying to regain what’s been lost after the failed attempt to break the $12,000 mark. However, the price doesn’t seem like it will be able to push past this level unless a surge in volume and bull pressure happens. Meanwhile, Bitcoin is locked between $11,630 and $12,000. When it comes to moves towards the downside, Bitcoin is well protected by the 21-period and 50-period moving averages.

BTC traders should look for an opportunity when BTC makes another push and breaks $12,000.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA, as well as its 21-period EMA
Price between its middle B.B (20-period SMA) and its top B.B.
RSI is neutral (56.12)
Volume is decreasing

Key levels to the upside Key levels to the downside

1: $12,000 1: $11,630

2: $12,330 2: $11,460

3: $13180 3: $11,090

Ethereum

Ethereum was quite stable in the past 24 hours, making small gains in an attempt to catch up to Bitcoin’s gains that happened yesterday. However, if we take a look at this month’s price movement, we can interpret the moves as a triangle formation, which will make a breakout very soon. It is more likely that the second-largest cryptocurrency by market cap will break the triangle formation towards the downside unless Bitcoin’s move pushes it up.

Traders should look for a trade opportunity when Ethereum breaks the formation.

ETH/USD 4-hour Chart

Technical Factors:

Price is above its 21-period EMA and its 50-period EMA
Price is slightly below its top B.B.
RSI is neutral (56.42)
Volume decreasing

Key levels to the upside Key levels to the downside

1: $400 1: $361

2: $415 2: $340

3: $496 3: $302

Ripple

XRP is the cryptocurrency that gained the most in the past 24 hours (when compared to Bitcoin and Ethereum) as its price increased close to 5% on the day. The third-largest cryptocurrency by market cap made another push towards the $0.31 resistance level, but the move failed to even reach the level, let alone break it.

Traders can look for an opportunity to trade XRP within the range it is currently in.

XRP/USD 4-hour Chart

Technical factors:

Price is above its 21-period and 50-period EMA
Price is above its top B.B.
RSI is slightly elevated (58.52)
Low volume (slightly increased)

Key levels to the upside Key levels to the downside

1: $0.31 1: $0.285

2: $0.32 2: $0.266

3: $0.3328 3: $0.245

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Basic Strategies

Combining Moving Averages with Parabolic SAR To Generate Accurate Trading Signals

Post author By Reddy Shyam Shankar
Post date 10 August, 2020
No Comments on Combining Moving Averages with Parabolic SAR To Generate Accurate Trading Signals

Introduction

Trend trading is a great way to earn money from the forex market. Any retail trading strategy based on a trend continuation pattern works well when it moves within a trend. Therefore, in this trading strategy, we will take trades from minor corrections using the parabolic SAR towards the trend.

Furthermore, we will use a 100-period exponential moving average to determine the trend. If the price is trading above the 100 exponential moving average, we will consider the trend as an uptrend. If the price is trading below the 100-period exponential moving average, it will consider it a downtrend. We will follow a simple logic by considering buying trades when the market moves up and considering sell trades when the market is moving to drown.

However, there are no specific rules about the period of your moving average. Some traders are comfortable with 100 EMA, while some traders are compatible with 20 EMA or SMA. Therefore, if you’re trading in a lower timeframe, you can use any moving average from 20 to 100 periods. However, we will focus on 100 EMA as it provides good profitability based on swing trading ideas.

Why Should We Use Parabolic SAR?

Parabolic SAR is a forex trading indicator that stands for “stand and reverses.” This trading indicator was devised by J Welles, represented by some dots below and above the candlestick. In an uptrend, dots remain below the price and indicates a bullish pressure once the price is rejected from these dots. Similarly, in a downtrend, the dots form above the price, and the price starts to move once it gets rejected from the parabolic SAR.

In the image below, we can see a clear chart of the candlestick pattern.

Let’s plot the parabolic SAR in the price chart and see how it looks like.

It is visible that in an uptrend, Parabolic SAR is below the price, and in a downtrend, the parabolic SAR is above the price. This is why the parabolic SAR is considered as a stop and reverse indicator.

Furthermore, the parabolic SAR has a built-in stop-loss function. Once the price moves up or down with a new candle, the parabolic SAR changes with the price. Therefore, you can move your stop loss once the price creates a new higher or lower low. Furthermore, you can edit the primary parameter of Parabolic SAR from the indicator’s setting, but in this trading strategy, we will use the default format.

Moving Average with Parabolic SAR

If we use a 100-period exponential moving average, we can catch the major trend direction from the minor correction. The forex market Moves Like a zigzag. Therefore, there is a minor correction in a major bullish trend and minor bullish correction in a major downtrend. If we know the major trend, we can quickly enter the trade from a correction to get the maximum reward from the minimum risk.

In the forex market, parabolic SAR usually provides trading signals earlier than expected, which might create a negative impact on your trading result. Overall, any trend following indicator does not provide a good result when the price moves within a range. In most of the cases, markets follow the trend of about 35% of the time. Therefore, it is essential to filter out the conditions where the market is moving within a range.

We can eliminate the unexpected market behavior by using the 100 moving average as it will provide a more significant trend that will prevent over-trading. In the image below, we can see how the parabolic SAR provides false trading signals when the market moves within a range.

In the ranging market, it would be difficult to make a profit using this trading strategy. Therefore, it is better to use the 100 moving average to get the overall direction of the trend.

Moving Average With Parabolic SAR Trading Rules

Every trading strategy has its unique rules. In the moving average with the Parabolic SAR trading strategy, our main aim is to follow the trend towards the direction of 100 EMA.

Overall, we will follow simple rules as Complex trading rules make it challenging to implement it on the chart. You can make good profits with a simple trading strategy if you can utilize it well with appropriate trade management and money management rules.

Timeframe

The moving average with the Parabolic SAR trading strategy works well in all timeframes from 5 minutes to weekly charts. The longer timeframe will provide better trading results. However, it is better to stick to the 1 hour to daily chart as it can cover fresh moves driven by banks and financial institutes.

Currency Pair

There is no obligation to use a currency pair. However, it is better to use a currency pair that does not remain within a range for a long time like EURCHF. Therefore, all major and minor pairs are good to go with this trading strategy.

Buy Entry (Inverse for Sell Entry)

Identify the price above the 100 periods moving average. If the price is choppy at the 100 EMA, Ignore the price chart, and move to another market.
Identify the parabolic SAR to point dots below the candlestick, which will be a buy signal (above the candlestick is a sell signal).
Later on, place a buy stop order above the candlestick high.
Put your stop loss below the printed dot with some buffer.

Example of Parabolic SAR Strategy

At the image below and see how parabolic SAR provided a buy trade setup.

Notice that the price is moving in a range at the 100 EMA area with a violation. The blue horizontal line represents the support and resistance level, where the price is consolidating. In this consolidation, we will not take any trade.
If you look at the price structure, you can see the price is moving within a range from their resistance to support. On the price move above the 100 exponential moving average, you should put a pending order above the range, projecting that it will break out from the resistance level and create an impulsive bullish pressure.

Stop Loss and Take Profit Set

When you put the pending order above the resistance level, you should put a stop loss below red dots that have appeared below the candlestick. While setting the stop-loss, make sure to use some buffer of 10 to 15 pips.

Later on, hold the price until it points red dots above the price. The red dot above the price will indicate that sellers are entering the market, and there is a possibility to create a new lower low. Furthermore, while sitting the stop loss and take profit, you should follow the basic rules of price action, including the breakout and pullback.

Summary

Let’s summarize the moving average with the Parabolic SAR trading strategy:

You should look for a fresh trending movement above or below 100 exponential moving average.
Parabolic dots below the price will provide buy-entry, and parabolic dots above the price will indicate sell-entry.
You should avoid ranging markets where the price might violate parabolic dots.

Moreover, trade management and good trading psychology are mandatory for every trading strategy. You cannot make a decent profit until you know how to minimize the risk to get the maximum benefit from trade.

Tags Basic Strategies, Currency pairs, Education, Forex, Forex Strategies, Forex Trading, ma, Moving Average, Parabolic SAR, PSAR, Technical Analysis, Technical Trading, trading

Forex Market Analysis

Daily F.X. Analysis, August 10 – Top Trade Setups In Forex – Market Prices In NFP Outcome!

Post author By Ali B.
Post date 10 August, 2020
1 Comment on Daily F.X. Analysis, August 10 – Top Trade Setups In Forex – Market Prices In NFP Outcome!

On the news front, eyes will be on the low impact events such as Sentix Investor Confidence from Eurozone and JOLTS Job Openings from the U.S. Besides, the stronger NFP data may keep dollar bullish.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.17849 after placing a high of 1.18829 and a low of 1.17550. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair broke under the 1.1800 level and reached 1.175 the lowest in 3 days after the U.S. dollar took its pace and outperformed in the market. The greenback rebounded from its two years low and trimmed its weekly losses on Friday that weighed on EUR/USD pair.

The rising tensions between the U.S. & China have already driven the U.S. dollar higher, and the U.S. jobs data on Friday added further strength to it. The latest development in the US-China conflict was the U.S. imposed sanctions on officials in Hong Kong and China, including Hong Kong leader Carrie Lam, over the suspension of protests in the territory.

On the data front, at 11:00 GMT, the German Industrial Production for June increased to 8.9% from the forecasted 8.3% and supported Euro. The German Trade Balance also came in positive as 14.5 B against the expected 10.3 B. At 11:45 GMT, the French Industrial Production for June increased to 12.7% against the forecasted 8.6% and supported Euro. The French Prelim Private Payrolls for the quarter came in as -0.6% against the anticipated -1.0%.

The French Trade Balance for June came in negative as 8.0B against the projected -7.1B and weighed on Euro. The Italian trade Balance at 13:00 GMT came in line with the expectations of 6.23 B.

Investors failed to cheer the positive data from Europe as the U.S. dollar was stronger on Friday, and the sharp decline in Turkish Lira over the past week exerted downside pressure on Euro.

A sharp selloff triggered the Euro’s correction in Turkish Lira that dropped it to the lowest of 2 years, the historic currency crisis of August 2018. The reserves of Central Banks of Turkey (CBRT) went negative for a couple of weeks, which caused a surge in the Turkish Lira’s selloff. However, last month, CBRT made a massive purchase of gold and overtook Russia as the world’s largest gold purchaser. In the lira currency crisis of 2018, Euro underperformed during that time period, and this has raised fears that if the history repeated, then downside risks for Euro can be seen.

However, on the U.S. front, at 17:30 GMT, the Average Hourly Earnings for June increased to 0.2% from the forecasted -0.5% and supported the U.S. dollar. The Non-Farm Employment Change suggested that 1.8M jobs were created in June against the expectations of 1.6B and supported the U.S. dollar. In the month of June, the Unemployment Rate also fell to 10.2% from the expected 10.5% and weighed on the U.S. dollar. The strong U.S. dollar weighed heavily on EUR/USD pair and dragged its prices to the level below 1.8000 on Friday.

Daily Technical Levels

Support	Pivot	Resistance
1.1773	1.1783	1.1792
1.1764		1.1802
1.1754		1.1812

EUR/USD– Trading Tip

The EUR/USD pair retraced lower to trade at 1.1793 level. On the upside, the EUR/USD may encounter resistance at 1.1865 and 1.1909 mark. A bullish breakout at this level can extend the buying trend to 1.2050. Today, the EUR/USD is likely to find support at 1.17650 level, and below this, further selling can be seen until the 1.1713 level. Let’s keep a focus on 1.1805 level to stay bearish below this in the EUR/USD pair.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30521 after placing a high of 1.31492 and a low of 1.30092. Overall the movement of GBP/USD pair remained Bearish throughout the day.

The Pound to U.S. dollar exchange rate fell by -0.3% on Friday to a low of 1.3000. The Sterling fell against the U.S. dollar after the concerning comments from the UK Chancellor Rishi Sunak, who warned that the extended furlough scheme would only give false hopes to the people. Mr. Sunak said that it was wrong to trap the people in a situation and pretended that there was always a job that they can go back to.

However, apart from this downbeat comment, Mr. Sunak also raised hopes for a possible Brexit deal and said that he was confident that there was a possibility to get an agreement with the E.U. by September. As in result, GBP investors became hopeful that there was possible progress in the EU-UK trade talks.

On the data front, the Halifax House Price Index for July rose from 0% to 1.6% and beat the expectations of 0.2%. However, the GBP investors failed to cheer the U.K.’s positive data as the U.S. dollar was strong across the board on Friday.

The U.S. dollar gained traction on the board on Friday after the release of better than expected U.S. jobs data. The latest US Non-Farm Employment Change suggested an increase in the number of jobs created in June by the U.S. Department of Labor & Statistics to 1.8M from the expected 1.5M and helped the U.S. dollar gain traction.

The Average Hourly Earnings from the U.S. also rose to 0.2% from the previous -1.3% and the expected -0.5% and supported the U.S. dollar. The Unemployment Rate for June dropped to 10.2% against the expected 10.5% and May’s 11.1%. The less unemployment rate from the U.S. showed that the U.S. economy was moving on the recovery side even after the widespread coronavirus cases across the country.

The better than expected U.S. jobs data weighed heavily on GBP/USD pair and dragged it to 1.3000 level on Friday. The Sterling traders will be looking ahead to Monday’s release of the latest Retail Sales figures from the U.K. Any improvement in the U.K.’s retail sector would provide strength to Sterling.

The U.S. Dollar Investors will be looking at the publication of the US NFIB business optimism index for July. The demand for safe-have greenback can be lifted after any improvement in the outlook for the American economy. On Tuesday, the release of the U.K.’s ILO unemployment rate report for June. If the figures came in equal to 3.9% or less, we could see the GBP/USD pair go on the upward as fears of high unemployment will be diminished.

Daily Technical Levels

Support	Pivot	Resistance
1.3037	1.3052	1.3065
1.3024		1.3080
1.3010		1.3093

GBP/USD– Trading Tip

The GBP/USD consolidates at 1.3067 level, holding right above the 50 periods EMA support area of 1.3040 level while the bearish breakout of 1.3040 level can extend selling unto 1.2918 level. Recently as we can see in the chart above that the GBPUSD pair has violated its upward trendline that supported the pair around 1.3130 level, and now below this, we can expect GBP/USD to continue trading bearish. The GBP/USD should show

a bearish crossover in order to confirm a strong selling bias in the Cable. On the higher side, Sterling may find resistance at 1.3105 and 1.3175. Let’s consider selling below 1.3045 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.912 after placing a high of 106.055 and a low of 105.478. Overall the movement of the USD/JPY pair remained bullish throughout the day. After falling for two consecutive days and staying flat for a day, USD/JPY pair rose and posted gains on Friday amid strong U.S. dollar comeback.

Since two years after U.S. President Donald Trump decided to ban U.S. transactions with two popular Chinese apps, the U.S. dollar rebounded from the lowest level. During the occasions of massive conflicts between the U.S. & China, the U.S. dollar has often preferred as a refuge, and on Friday, the U.S. dollar again used this status.

The U.S. President Donald Trump officially banned American companies from working with TikTok, the video streaming app, and WeChat, the social messaging app. the action to ban these companies was taken in response to the widespread fears of data privacy. However, the chances that the US-China conflict will rise further increased after this move, and hence, the U.S. dollar gained.

Meanwhile, the U.S. Treasury imposed sanctions on 10 top officials from Hong Kong and China, including the Hong Kong Leader Carrie Lam, as the protests arose in the territory against the new security law in Hong Kong.

Furthermore, the U.S.’s macroeconomic data also remained supportive of the U.S. dollar when it came to better than expectations on Friday.

At 17:30 GMT, the highlighted Average Hourly Earnings rose to 0.2% in June from the negative expectations of -0.5% and supported the U.S. dollar. The Non-Farm Employment Change rose to 1763K from the forecasted 1530K and came in favor of the U.S. dollar. The greenback was also supported after the Unemployment rate for June also dropped to 10.2% from the expected 10.5%. In June, the better-than-expected U.S. jobs data gave a push to the U.S. dollar that added further strength to USD/JPY pair on Friday.

However, the gains remained limited as the data from Japan was also supportive of its local currency. At 04:30 GMT< the Average Cash Earnings for the year from Japan came in as -1.7% against the forecasted -3.0% and supported the Japanese Yen. The Household Spending for the year from Japan also came in as -1.2% against the expectations of -7.8% and supported the Japanese Yen. However, the Leading Indicators from Japan were released at 10:00 GMT, came in line with the expectations of 85.0%.

The positive data from Japan supported Japanese Yen on Friday that kept a check on USD/JPY pair gains. On the vaccine front, the risk sentiment was supported by the news that Russia was all set to register the world’s first COVID-19 vaccine next week. The Russian vaccine third phase trials were currently in progress, and Russia announced to disclose them on August 12. This vaccine was developed by the collaboration of the Russian Defence Ministry and the Gamaleya Research Institute.

The improvement in risk sentiment weighed on safe-haven Japanese Yen and contributed to the USD/JPY pair’s gains.

Daily Technical Levels

Support	Pivot	Resistance
105.8200	105.8900	105.9300
105.7800		106.0000
105.7200		106.0400

USD/JPY – Trading Tips

The USD/JPY continues to trade at 105.780 area with the bullish sentiment, especially after testing the 38.2% Fibonacci support level of 105.650. On the lower side, the USD/JPY may find support at 105.600 and 105.078 level, which is extended by the 38.2% and 61.8% Fibonacci retracement level. A bullish breakout of 106.467 resistance level can drive more buying until the next resistance area f 107.198. The current market price of USDJPY is staying over 50 EMA, which extends support and may push the pair higher. Let’s consider buying above 105.600 level today. Good luck!

Tags EUR/CHF, Forex, forex services, Forex Trading, Fundamental Analysis, GBPUSD, Price Action, Support and Resistance, Technical Analysis, Technical Outlook, Trade Setup, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, August 10 – Chainlink Surpasses LTC’s Market Cap Despite Major Bearish Signals

Post author By Ilija Rankovic
Post date 10 August, 2020
1 Comment on Daily Crypto Review, August 10 – Chainlink Surpasses LTC’s Market Cap Despite Major Bearish Signals

The cryptocurrency market had an interesting weekend, with Bitcoin pushing towards 12,000 and actually passing it at the time of writing. Bitcoin is currently trading for $12,003, which represents an increase of 2.24% on the day. Meanwhile, Ethereum gained 0.18% on the day, while XRP lost 0.11%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Balancer gained 45.17% on the day, making it the most prominent daily gainer. Band Protocol (32.27%) and Nervos Network(26.64%) also did great. On the other hand, Flexacoin lost 16.27%, making it the most prominent daily loser. It is followed by Decentraland’s loss of 9.91% and Elrond’s loss of 6.81%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has increased slightly since we last reported, with its value currently at 61.78%. This value represents a 0.28% difference to the upside when compared to Friday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization has increased since we last reported. Its current value is $362.67 billion, which represents an increase of $3.77 billion when compared to Friday’s value.

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What happened in the past 24 hours?

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Technical analysis

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Bitcoin

Bitcoin has spent the weekend pushing towards $12,000 and finally passing it in a major push just a couple of hours ago. However, the price didn’t fully (or at all) establish itself above the major mark. Bitcoin will need to confirm its position above $12,000 (and confidently) before being considered as officially above it. For now, this level is still a resistance level.

BTC traders should look for an opportunity to make a trade when BTC confirms its position above or below $12,000.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA, as well as its 21-period EMA
Price above its top B.B.
RSI is elevated (65.89)
Volume elevated (on the increase)

Key levels to the upside Key levels to the downside

1: $12,000 1: $11,630

2: $12,330 2: $11,460

3: $13180 3: $11,090

Ethereum

Unlike Bitcoin, Ethereum spent the weekend without much movement towards the upside. However, the second-largest cryptocurrency by market cap did fall back to the $361 level and tested its support, which held up quite nicely. Once the price bounced back to its previous highs, it continued slowly moving towards the upside, but without any real strength. Ethereum still has a way to go before it reaches past $400.

Traders should look for a trade opportunity when Ethereum increases its volume.

ETH/USD 4-hour Chart

Technical Factors:

Price is above its 21-period EMA and its 50-period EMA
Price is slightly below its top B.B.
RSI is elevated (58.51)
Volume increasing slightly

Key levels to the upside Key levels to the downside

1: $400 1: $361

2: $415 2: $340

3: $496 3: $302

Ripple

XRP had quite a turbulent weekend, with its price failing to stay above the previously broken triangle formation levels. This happened as, even though XRP managed to break the triangle formation to the upside, it did not reach past the $0.31 resistance level. Instead, bears stepped into the market and brought the price down to below $0.285 levels (at one point). However, the $0.285 level held up and XRP has confirmed its position above this support.

Traders can look for an opportunity to trade when XRP reaches the $0.31 mark and decides if it will reach above it or fall below once again.

XRP/USD 4-hour Chart

Technical factors:

Price is above its 21-period and 50-period EMA
Price is slightly above its middle B.B. (20-period SMA)
RSI is neutral (51.45)
Low volume

Key levels to the upside Key levels to the downside

1: $0.31 1: $0.285

2: $0.32 2: $0.266

3: $0.3328 3: $0.245

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Basic Strategies

Trading The Forex Market Using ‘Price Action With Context’ Strategy

Post author By Reddy Shyam Shankar
Post date 9 August, 2020
No Comments on Trading The Forex Market Using ‘Price Action With Context’ Strategy

Introduction

Price action with context is a process to predict a currency pair’s movement by reading the chart. The key price driver of a currency pair is fundamental events, but we can predict the future movement based on the present and past activity of the chart.

Central banks and financial institutes drive the forex market. Therefore, when they make the price move, they left some signs of their activity. As a price action trader, we will read their activity and anticipate what they might do in the future.

What is Price Action?

Price action is a process to inquiry about a currency pair’s price development. The main aim of the price action trading is to understand buyers’ and sellers’ sentiment in the price and predict future movement based on these. The price action trading is based on the combination of several trading indicators and price behaviors. Therefore, you might have to use multiple trading tools as a price action weapon.

The price of a currency pair moves based on the sentiment of buyers’ and sellers’. Therefore, using price action is logical that can provide accurate trading signals. In the price action with context trading strategy, we will identify a market direction by reading the chart and then enter a trade from the correction to get the maximum return with a minimum risk.

What are Price Action Weapons?

There are many parts in the price action trading that a trader should know, like- candlestick, support and resistance, trend, market flow, event level, key Level, and market context.

Candlestick

Candlestick represents the price movement of a currency pair for a specific timeframe. The four major parts of candlestick trading are- opening price, closing price, high price, and low price. Candlestick represents both continuation and reversal price direction based on the opening, closing, high and low. There are many candlestick patterns in the market, but in this trading strategy, we will focus on reversal candlesticks only.

Example of reversal candlestick – Pinbar, Engulfing Bar, and Two Bar, etc.

Support & Resistance

Support and resistance are a price zone from where the price is likely to change the direction. When the price is moving up, it will reverse as soon as it finds resistance. On the other hand, the price will stop moving down as soon as it finds a support level. There is more to know about the support and resistance in this trading strategy-

Event Level – Event level is a price zone that works as both support and resistance. It is the most important Level as both buyers and sellers put attention to it.

Key Level – key levels are a significant level in the daily or weekly timeframe to understand the price’s top and bottom.

Dynamic Level – Dynamic levels move with the price rather than a specific horizontal zone. In this trading strategy, we will use 20 Exponential Moving Average as the dynamic Level.

Market Context

Market context is a process to identify the nature of a trend. It has four elements:

Impulsive – When the price aggressively creates new highs and lows, it is considered as an impulsive trend. It indicates that the price will continue the current trend.

Corrective – In a corrective market structure, price barely creates new higher highs or lower lows. It is an indication of market reversal.

Volatile Trend – In volatile trends, the market follows the corrective structure and indicates a market reversal.

Non Volatile Trend – Non-volatile trend appears with the impulsive market momentum when the price tries to continue the current movement.

Bullish Price Action Trade Setups

Find the market in an impulsive bullish pressure in H4 or daily timeframe. Identify the Key support level and consider buy trades only as soon as the price is trading above it.

Entry

To enter the trade, you have to wait until the price comes down towards an event level with a corrective structure in 1 Hour timeframe. Enter the trade as soon as the price rejects and closes above the event level with a reversal candlestick.

Stop Loss

Put the stop loss below the recent swing low with 10-15 pips buffer. Here the buffer means you should put the stop loss 15 pips below the swing low.

Take Profit

The primary target of the take profit would be the next event level. However, if the bullish trend remains impulsive, you can extend the take profit. On the other hand, you can close earlier if the price barely creates new higher highs.

In the example below, we can see a visual representation of how to take the entry with stop loss and take profit level.

Bearish Price Action Trade Setups

Find the market in an impulsive bearish pressure in H4 or daily timeframe. Identify the key resistance level and consider sell trades only as soon as the price is trading below it.

Entry

Stop Loss & Take Profit

Put the stop loss above the recent swing high with 10-15 pips buffer. Here the buffer means you should put the stop loss 15 pips above the swing high.

The primary target of the take profit would be the next event level. However, if the bearish trend remains impulsive, you extend the take profit. On the other hand, you can close earlier if the price barely creates new Lower lows.

In the example below, we can see a visual representation of how to take the sell entry with stop loss and take profit level.

Final Thoughts – Trade Management Idea

In the above section, we have seen how to trade using the price action with context. In this trading strategy, buy and sell trades come after filtering out unusual market movements from the volatile market conditions.

However, no forex trading strategy in the world can guarantee a 100% profit, so your trades might go wrong even if you strictly followed all rules. If you want to grow your account with a consistent profit, you should follow strong trade management tools, as mentioned below:

Ensure that you are not taking over a 2% risk per trade of your trading balance.
Move your stop loss at breakeven as soon as the price creates a new higher high or lower low.
If you face a 3 or 4 consecutive losses, take a break and observe the market until it follows the trend accurately.
Make sure to keep your mind free from any bias while you are analyzing the market.

Overall, price action is the core element of trading that every trader should know. There are many trading strategies combining price action and other trading tools. The strategy we have seen above has a good history of providing profitable trades. Therefore, if you can implement it properly, you can consistently grow your trading account.

Tags candlestick patterns, Corrective Waves, Education, Forex, Forex Technical Trading, Impulsive Wave, Price Action, stop-loss, take profit, Technical Analysis, trading, Volatile Trend

Forex Basic Strategies

Trading The Most Popular ‘Head and Shoulders’ Pattern Forex Strategy

Post author By Reddy Shyam Shankar
Post date 8 August, 2020
No Comments on Trading The Most Popular ‘Head and Shoulders’ Pattern Forex Strategy

Introduction

Head and shoulder is a famous market reversal pattern. Most of the new and experienced traders use this pattern to identify the potential market reversal trade. Traders can use this pattern in every market, including forex, cryptocurrency, stock, indices, and commodities.

In this pattern, there is an indication that the price is trying to make a new higher but cannot do it. In the forex market, it is essential to understand the sentiment of buyers and sellers. In that sense, head and shoulder is a prominent price pattern indicating what buyers and sellers are doing in the market and how buyers got rejected from a potential zone.

What is the Head and Shoulder Pattern?

Head and shoulder is a price pattern that usually appears in an uptrend and indicates a price zone from where buyers are going to lose their momentum. A complete head and shoulder pattern indicates the start of a bearish trend. Therefore, if you want to join the bearish trend as early as possible, you should take trading decisions based on this pattern to have a better risk: reward ratio.

The head and shoulder pattern has three elements, as marked in the below chart.

The left shoulder is the ordinary swing high of a bullish trend. Later on, the head indicates another swing high indicating the continuation of the bullish trend. However, the right shoulder indicates that the price is unable to make another high above the head, which is an indication that buyers are losing their momentum.

On the other hand, the inverse head and shoulder are like the head and shoulder pattern that appears after a bearish trend. It indicates a potential market reversal from a bearish trend to the upside.

In the image below, we can see how an inverse head and shoulder looks like.

How to Identify the Head and Shoulder Pattern?

The head and shoulder pattern is prevalent in the chart that does not require any effort to see. You can easily spot it with the naked eye. Moreover, there are some Expert Advisors (EAs) or trading indicators that automatically show the head and shoulder pattern.

You can draw the head and shoulder pattern using the trendline (without ray) despite the automotive process. Later on, we should focus on the location of the pattern. If the head and shoulder pattern appears near any significant support level, it might not work well due to the lack of space for further price decline.

Overall, the head and shoulder pattern from a significant resistance level or key resistance level can provide a potential market reversal opportunity. Furthermore, head and shoulder patterns with significant economic events often make the level important among traders.

Head and Shoulder Pattern Trading Strategy

If you have read the above section, you would know that it is not difficult to find the price’s head and shoulder pattern. The profitability ratio of this pattern is very high, based on the previous trading result. There are several ways to make trades based on the head and shoulder trading strategy. However, the most reliable way to take the trade is from the neckline breakout.

Timeframe

The head and shoulder price pattern in a daily chart is more reliable than the head and shoulder pattern in a 5 minutes timeframe. The accuracy of this trading strategy increases if you move to a higher timeframe. However, it is often difficult for traders to take trades based on a weekly or monthly timeframe as it requires a lot of time and balance. Based on the retail and institutional traders, any time frame from 1 hour to a daily chart is perfect for this trading strategy.

Currency Pair

The head and shoulder trading strategy works well in all financial markets, including forex, cryptocurrency, stocks, indices, and commodities. Therefore, there is no barrier to use it on specific currency pairs. However, it is recommended to trade in major currency pairs as there is enough liquidity to provide a substantial movement without any unnecessary spike.

Entry

After forming the head and shoulder pattern, it is crucial to measure the price action at the neckline area. The neckline is a support level based on the lowest swing point of two shoulders and one head. In this trading strategy, you should wait for the price to break below the neckline with a big candle breakout. The strength of the breakout will indicate how reliable the upcoming bearish pressure is.

Later on, wait for the price to correct towards the neckline again with a corrective speed and enter the trade as soon as the price rejects the neckline with a bullish reversal candlestick.

Stop Loss

The stop loss will depend on two categories. If you are an aggressive trader, you can put the stop loss above the reversal candlestick with 10-15 pips buffer. In case the market moves above the neckline and hits your stop loss, it would indicate that the price made a false break below the neckline. However, the conservative approach is to put the stop loss above the left shoulder with some buffer. It would save your trading balance from the unusual market noise.

Take Profit

The first take profit level should be based on the 1:1 risk: reward ratio. You can close 50% of the position at the first take profit level and wait for the 100% of neckline to head for the final take profit.

Moreover, you should be more cautious in setting the take profit level by considering the near-term support and resistance levels. In the example below, we can see how the price broke below the neckline and retested it again to create a trading opportunity. Moreover, this image refers to how to set the stop loss and take profit levels.

Conclusion

The forex market is the world’s biggest financial market, which is very uncertain. Therefore, no trading strategy can guarantee a 100% profit. There is some possibility that your trade might hit the stop loss after taking the entry, instead of moving down. In that case, you should take the loss and wait for further trading opportunities.

The best way to keep yourself profitable in the market is to use appropriate money management and trade management rules for trading. Therefore, if you take 1% or 2% risk per trade, any unusual stop loss might not affect the overall balance.

Tags bearish reversal, bullish reversal pattern, Education, Forex, head and shoulder, Pattern Based Trading, Reversal Pattern, Technical Analysis, Technical Trading, trading

Forex Basic Strategies

Dynamic Channel Trading Using The Concepts Of Price Action!

Post author By Reddy Shyam Shankar
Post date 7 August, 2020
No Comments on Dynamic Channel Trading Using The Concepts Of Price Action!

Introduction

In forex, the dynamic channel trading is a profitable strategy that forms with standard trendlines. It indicates a potential move to identify the market direction both to the downside and upside. On the other hand, price action is a method to identify the price direction based on price behavior. Therefore, we can create a profitable trading strategy by reading the price action from any channel support and resistance level.

In general, traders use price channel as a technical analysis tool that helps to identify the potential market movement. The dynamic channel moves like a zigzag by creating lower lows and higher highs. In Forex trading, we usually have two types of dynamic channels:

An upward or ascending channel
Downward or descending channel

Dynamic Channel Identification

We can easily identify the dynamic channel by connecting the swing lows or swings highs they create. In an upwards dynamic channel, it will move with the price with a higher high formation.

Similarly, in a downward dynamic channel, it will move with the price by creating lower lows.

In the image above, we can see that the higher highs and the lower lows connected through straight lines. The dynamic price channel shows a significant movement from down to upside in the trend line. The trendline below the price may work as a dynamic support level, and the trendline above the price may work as a dynamic resistance level.

Besides the dynamic channel, we will use the concept of price action by measuring what buyers and sellers are doing in the market. Any slower and corrective movement from the dynamic channel support and resistance would indicate a possibility of a potential market reversal.

Later on, we will use the appropriate reversal candlestick from that area to enter a trade. In this trading strategy, we can make a profit when the price is trading within the channel, or it breaks out from the channel. However, we will filter out the unusual false movement by reading the price action.

Bullish Dynamic Channel Trading Strategy

In the bullish channel continuation trade setup, we will identify the price that is moving upside within the channel.

Identify the Price Location

Central banks and big financial institutes drive the price of a currency pair. Therefore, institutional traders focus on long timeframes mostly, as it provides the most reliable price direction. Therefore, we will move to the daily or weekly timeframe and identify the location of the price. We will consider channels that only meets the following condition:

⚠️ An upward channel should move within an uptrend above a key support level.

Entry

In an upside movement of a price channel, there will be new higher highs. Therefore, we need to identify a price channel where the price moves down towards channel support with a corrective speed. We will enter the trade as soon as the price rejects the channel support with a reversal candlestick formation.

Stop Loss

In a bullish channel trading, the stop loss would be below the reversal candlestick with 10 to 15 pips buffer.

Take Profit

The primary aim of the taking profit would be the immediate channel resistance. However, we have to read the price action to make a trading decision regarding the take profit.

If the price starts to move with an impulsive bullish pressure, it can go beyond the channel resistance. In that case, we can take some partial closing 10-15 pips below the channel resistance and wait for the price to test any event level.

Bearish Dynamic Channel Trading Strategy

In the bearish channel continuation trade setup, we will identify the price that is moving downside within the channel.

Identify the Price Location

Based on the price action context, we will move to the daily or weekly timeframe and identify the price’s location. We will consider channels that only meets the following conditions:

⚠️ A downward channel should move within a downtrend from a key resistance level.

Entry

In the downward price channel, there will be lower lows. Therefore, we need to identify a price channel where the price is moving down towards a channel resistance with a corrective speed. Therefore, we will read the price action and enter the trade as soon as it rejects the channel resistance with a reversal candlestick pattern.

Stop Loss

In the bearish channel trading, the stop loss would be above the reversal candlestick with 10 to 15 pips buffer.

Take Profit

The primary aim of the taking profit would be the immediate channel support. However, we have to read the price action to make a trading decision regarding the take profit.

If the price starts to move with an impulsive bearish pressure, it can go beyond the channel support. In that case, we can take some partial closing 10-15 pips above the channel support and close the rest of the amount at the next event level.

Channel Breakout Trading Strategy

In forex trading, when the price crossed (above or below) the channel, there is a profitable trading strategy. For making the trade sustainable, we need to identify the speed of the breakout. When institutions or banks enter the market, we see such massive breakout from the channel support or resistance.

Entry

After a massive breakout from a dynamic channel, we will wait for a correction. The correction indicates that the massive breakout would be strong. We will wait until the price moves to the channel support or resistance level with a corrective speed and enter the trade as soon as it rejects the level with a reversal candlestick formation.

Stop Loss

Setting a stop loss is similar to the channel continuation trade setup. You can put your stop loss above or below the reversal candlestick with 10 to 15 pips buffer.

Take Profit

The primary target of the channel breakout is the immediate event level. However, you can extend the take profit by reading the price action. If the power of the breakout is strong, the price may move beyond the immediate event level.

Conclusion

The Forex market is a competitive trading market where trade management is a key element for a forex trader. No trading strategy can assure you a confirmed profit. Therefore, it is recommended to use not more than 2% risk per trade and move the stop-loss at breakeven as soon as the price creates new lows or highs.

Tags Channel Trading, Channels, Dynamic Channel Trading, Education, Forex, Higher High, Market States, Price Action, Resistance, Support, Technical Analysis, trading, Trading Channels

Forex Market Analysis

Daily F.X. Analysis, August 07 – Top Trade Setups In Forex – Big Day, NFP is Here!

Post author By Ali B.
Post date 7 August, 2020
1 Comment on Daily F.X. Analysis, August 07 – Top Trade Setups In Forex – Big Day, NFP is Here!

The Non-farm payrolls will extend clarity over the damage in the labor market last month, and traders will keenly await its release. Overall, economists expect a slight improvement in the U.S. unemployment rate from 11.1% to 10.5%, while the Average Hourly Earnings are expected to improve from -1.2% to -0.5%%. The NFP itself is expected to report 1530K (negative for a dollar) vs. 4800K figures beforehand.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD closed at 1.18640 after placing a high of 1.19048 and a low of 1.17927. The EUR/USD once again saw a bullish movement after a brief U.S. dollar recovery attempt earlier this week. Despite worsened coronavirus cases in some Eurozone nations, the bloc’s outlook remained much more optimistic than the U.S. outlook.

While the advances in the Euro have slowed, the EUR/USD pair has continued to trend higher over the past week. EUR/USD pair climbed slightly from 1.1656 to 1.1778 last week. After U.S. Dollar attempted to recover, the pair EUR/USD saw a brief dip at the beginning of this week. However, the EUR/USD pair is eventually rising again as the U.S. dollar’s weakness persists. Whereas, the potential for advances in the currency pair was limited as coronavirus concerns rose on Sunday. The Euro remained broadly appealing overall. Throughout the coronavirus pandemic, the E.U. and the European Central Bank have handled the crisis well compared to other major economies like the U.K. & U.S.

As a result, Euro’s losses in response to a rebounding U.S. dollar have been limited. The Euro and U.S. dollar has a negative correlation, and the Euro often gains from the U.S. dollar weakness. It means that the rally of the EUR/USD pair is set to continue even a rise in worsening coronavirus cases’ concerns.

The Euro appeal was also down after Spain saw a surge in coronavirus cases, and speculations arose that the Eurozone could face fresh lockdowns in Spain to support the Eurozone economy. On the U.S. dollar front, the greenback attempted recovery earlier this week; however, the gloomy outlook persisted and kept investors from mounting much of a recovery rally in the currency.

The number of coronavirus cases in the United States has increased to its highest, and the U.S. government and Federal Reserve have only taken mixed action to limit the virus spread and protect the U.S. economy. Attempts to push further stimulus have been stuck in U.S. Congress, and Federal Reserve may become more dovish.

On the data front, at 12:15 GMT, the Spanish Services PMI fell short of expectations of 52.3 and came in as 51.9. The Italian Services PMI for July came in as 51.6 against the expectations of 51.6 and supported Euro.

At 12:50 GMT, the French Final Services PMI for July dropped to 57.3 against the expected 57.8 and weighed on Euro. At 12: 55 GMT, the German Final Services PMI dropped to 55.6 against the forecasted 56.7. The Final Services PMI for the whole bloc fell to 54.7against the forecasted 55.1and weighed on EURO.

Later today, eyes will remain on the Non-farm payrolls will extend clarity over the damage in the job market last month, and traders will eagerly await its release. Overall, economists expect a slight improvement in the U.S. unemployment rate from 11.1% to 10.5%, while the Average Hourly Earnings are expected to improve from -1.2% to -0.5%%. The NFP itself is expected to report 1530K (negative for a dollar) vs. 4800K figures beforehand.

Daily Technical Levels

Support	Pivot	Resistance
1.1802	1.1854	1.1915
1.1740		1.1968
1.1688		1.2029

EUR/USD– Trading Tip

The EUR/USD pair retraced lower to complete 38.2% Fibonacci retracement at 1.1817 level. On the higher side, the EUR/USD pair may find resistance at 1.1909 level, and the closing of candles below this level can keep bearish pressure on EUR/USD. A bullish breakout of this level can extend the buying trend until 1.2050. Today, the EUR/USD is likely to find support at 1.1800 level. Let’s keep an eye on NFP as it may drive sharp price action in the EUR/USD pair.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.31133 after placing a high of 1.31614 and a low of 1.30528. The pound rose on Wednesday to remain on course for a third-straight weekly gain against the U.S. dollar and ignored weaker than expected economic data ahead of the Bank of England meeting on Thursday. Previously, the Final Services PMI in July came in as expected 56.5 points and indicated expansion in the services sector in the U.K.

This Thursday, the focus will be on the Bank of England’s monetary policy decision and Andrew bailey’s speech. England’s central bank is anticipated to keep interest rates unchanged but will roll out its forecasts on a range of economic measures, including Inflation, GDP, and unemployment. In recent weeks, debates have been under discussion about the BoE’s cutting of rates below zero, but Thursday’s meeting is unlikely to offer detailed insight.

The NIRP (Negative Interest Rate Policy) has been under active review at the Bank of England, but it seems like a little too early for the central bank to make any decisive move. Some analysts expect that the Bank of England will prefer to use a negative interest rate until the EU-UK relationship for 2021 gets cleared.

On the U.S. front, the ADP Non-Farm Employment Change dropped to 167K from the expected 1200K in July. It means that the U.S. government introduced 167K jobs only while that weighed on the U.S. dollar and added strength to the GBP/USD pair gains.

However, in July, the Final Services PMI rose to 50.0 from expected 49.6, and the ISM Non-Manufacturing PMI rose to 58.1 from expected 55.0. This showed an expansion in America’s services sector in July and supported the U.S. dollar that weighted on additional gains in GBP/USD pair.

Another reason for the rise in GBP/USD pair was the weakness of the U.S. dollar. The ever increasing numbers of coronavirus cases dampened the prospects for a swift economic recovery in the U.S. and forced investors to continue dumping the greenback. This, coupled with the delay in the U.S. fiscal stimulus package’s announcement and further pressurized the U.S. dollar.

The U.S. dollar was so under pressure that even the goodish rebound in the U.S. Treasury bond yields failed to support the U.S. dollar.

Apart from this, the rising number of coronavirus cases in the U.K. and the renewed fears of no-deal Brexit, as both sides were lagging in securing a deal, held investors to place any aggressive bullish position in the GBP/USD pair ahead of BoE monetary policy.

Daily Technical Levels

Support	Pivot	Resistance
1.3060	1.3111	1.3166
1.3005		1.3217
1.2954		1.3271

GBP/USD– Trading Tip

The GBP/USD consolidates at 1.3127 level, holding right above the double bottom support area of 1.3103 level while the bearish breakout of 1.3105 level can extend selling unto 1.3058 level. Recently as we can see in the chart above, the GBPUSD pair has violated the upward trendline, which supported the pair around 1.3130 level. At the same level, the 50 EMA was extending support, but the GBP/USD showed a bearish crossover, suggesting further odds of selling in the Cable. On the higher side, Sterling may find resistance at 1.3176. Let’s consider selling below 1.3105 level today.

USD/JPY – Daily Analysis

A day before, the USD/JPY closed at 105.592 after placing a high of 105.871 and a low of 105.318. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair extended the decay on the back of the weaker U.S. dollar across the board and bank of Japan governor Kuroda’s speech telling that Japan’s economy will improve in the second half of the year.

The Bank of Japan Governor Haruhiko Kuroda warned that in order to contain the spread of public health measures were re-introduced, then the economic activity could be significantly constrained. He also affirmed that Japan was not slipping into deflation and that the central bank would continue with its efforts to achieve the inflation target of 2%. Kuroda again assured that the Bank of Japan would be ready to ramp up the monetary stimulus without hesitation if needed to aid the economy through the pandemic crisis.

Kuroda also said that Japan’s financial system was quite safe and stable and countered the fears that the banking sector would fall out from COVID-19. He also warned that there would be risks to Japan’s financial stability if pandemic prolonged longer than expected.

He said that Japanese and overseas economies would gradually improve from the second half of this year despite extremely high uncertainties. However, the pace of growth is expected to be moderate as the preventive measures to control the virus spread has its effects on economic activity.

On the other hand, the greenback was the worst performer in the currency market. It was so under pressure that it could not benefit from the latest round of economic data that showed an improvement in the Service Sector of the U.S. The rebound in the U.S. Treasury yield also could not support the U.S. dollar. The U.S. Dollar Index (DXY) was testing the 92.60 level lowest since last week.

On the data front, the ADP Non-Farm Employment Change showed that the U.S. created 167,000 jobs in July against the estimated 1200K. This weighed on the U.S. dollar and added further in the losses of the USD/JPY pair.

The Trade Balance from the U.S. fell in line with the expectations of -50.7B. The Final Services PMI rose to 50.0 points in July than the expectations of 49.6 and supported the U.S. dollar. At the same time, the ISM Non-Manufacturing PMI also rose to 58.1 points from the forecasted 55.0 and came in favor of the U.S. dollar.

However, USD bulls did not cheer the positive data, and the U.S. dollar remained under stress to post losses on the day. On the US-China front, China’s ambassador to Washington said that China did not want to see a Cold War break out between China and the U.S. He suggested that both countries need to work to repair their relations that were under extraordinary stress.

Daily Technical Levels

Support	Pivot	Resistance
105.3100	105.6000	105.8800
105.0300		106.1700
104.7400		106.4500

USD/JPY – Trading Tips

Technically, the USD/JPY hasn’t changed much as USD/JPY continues to consolidate at 105.680 with bearish sentiment, especially after violating the 38.2% Fibonacci support level of 105.650. On the lower side, the USD/JPY may find support at 105.078 level, which is extended by the 61.8% Fibonacci retracement level. A bearish breakout of 61.8% level can drive more selling until the next support area f 104.200. The current market price of USDJPY is staying below 50 EMA, which extends resistance at 105.650 level. Let’s consider selling below 105.650 level today. Good luck!

Tags Daily Brief, EUR-USD, Forex, Forex Trading, Fundamental Analysis, GBP-USD, Support and Resistance, Technical Analysis, Trade Setup, trading, USD-JPY, USDJPY

Forex Market Analysis

Dow Jones – Long-Term Technical Overview

Post author By Eduardo Vargas
Post date 7 August, 2020
No Comments on Dow Jones – Long-Term Technical Overview

This year, The Dow Jones Industrial Average performance went down more than 36% during the first quarter collapse that dragged to the global stock market. Although the recovery experienced by the Industrial Average after March 23th keeps its performance on the negative side, the DJ-30 index could still reach a new all-time high.

Market Sentiment Overview

During the first quarter of 2020, the Coronavirus spread attained the status of a global pandemic, which triggered an economic crisis, originated from a worldwide lockdown. The economic context took down the stock markets. In particular, the U.S. stock market led the Industrial Average to plummet until the 18,213.5 pts, its worst level since November 2016.

Once Dow Jones found support in its lowest level of the year, after losing over 36%, the Industrial Average began to recover partially from of its losses, advancing near 49% from its March’s low to date.

Under this context, the upper figure illustrates the Dow Jones moving in the 52-week high and low range’s strong bullish sentiment zone. At the same time, we distinguish its price moving above the 26-week moving average, which leads us to anticipate more advances in the short-term.

On the other hand, the Institutional Net Positions (green curve) informed in the latest CFTC report unveils that the speculative bull traders increased their positioning on the long side. However, the institutional sentiment remains on the bearish side.

In summary, the short-term sentiment remains on the long side. In this context, a potential recovery could make it advance toward the 28,595.2 pts, which corresponds to the opening price of 2020. On the other hand, if the Dow Jones Industrial Average develops a new bearish movement, the next key supports are located at 26,749.9 pts and 23,904.4 pts.

Elliott Wave Outlook

Under an Elliott Wave perspective, the big picture of the Dow Jones Industrial Average reveals its advance on an incomplete fourth wave of Primary degree identified in black.

The current bull market began in early March 2009, when the Industrial Average found fresh buyers at 6,466.6 pts. In the next figure, we distinguish that the third wave corresponds to an extended movement, which ended in early February when the Blue Chip U.S. stock market index found resistance at 29,595.3 pts.

Currently, the Dow Jones index advances in its fourth wave of Primary degree, which progress on its wave (B) of Intermediate degree identified in blue. On the other hand, we noticed that the second wave (identified in black on the left of the chart) developed a simple correction in a brief lapse of time. In this context, and considering the alternation principle, the fourth wave should be a complex correction that should take longer than the second wave, for instance, in the form of a triangle formation, or a double three pattern. After this corrective wave formation, the price action should continue the bullish trend developing a fifth wave of Primary degree with a potential target at the psychological barrier of 30,000 pts.

Finally, with the completion of the five-wave upward sequence of Primary degree, the Industrial Average would complete a motive wave of Cycle degree. Hence, the end of the current bull market will give way to a downward corrective sequence in three waves of Primary degree.

Tags Dow Jones, Elliott Wave, Forex, Market Sentiment, Technical Analysis, Technical Outlook, trading

Crypto Market Analysis

Daily Crypto Review, August 7 – Goldman Sachs Launching its Own Stablecoin; DeFi Platforms Traffic Surging

Post author By Ilija Rankovic
Post date 7 August, 2020
1 Comment on Daily Crypto Review, August 7 – Goldman Sachs Launching its Own Stablecoin; DeFi Platforms Traffic Surging

The cryptocurrency market ended up mostly in the green, with Bitcoin continuing its path towards $12,000. Bitcoin is currently trading for $11,831, which represents an increase of 1.34% on the day. Meanwhile, Ethereum lost 0.18% on the day, while XRP gained 1.4%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Balancer gained 23.90% on the day, making it the most prominent daily gainer. Aave (20.29%) and Decentraland (15.99%) also did great. On the other hand, Aurora lost 12.10%, making it the most prominent daily loser. It is followed by Ampleforth’s loss of 7.98% and The Midas Touch’s loss of 5.50%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has increased slightly since we last reported, with its value currently at 61.50%. This value represents a 0.02% difference to the upside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization has increased since we last reported. Its current value is $358.90 billion, which represents an increase of $5.42 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization kept increasing in price slowly throughout the day as sentiment turned even more bullish. However, the path towards $12,000 will not be easy, as the sell wall at the resistance is not small. On the other hand, if Bitcoin fails to break $12,000, it will create a double top and most likely fall down towards $11,630 and then $11,460 as well.

BTC traders should look for an opportunity to make a trade when BTC breaks $12,000 or fails to break it.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA, as well as its 21-period EMA
Price is near its top B.B.
RSI is elevated (65.50)
Volume elevated (stable)

Key levels to the upside Key levels to the downside

1: $11,630 1: $11,460

2: $12,000 2: $11,090

3: $10,855

Ethereum

Ethereum spent the day flattening out its movement and mostly trading sideways. The second-largest cryptocurrency by market capitalization stayed below the $400 mark and couldn’t get past it. However, with volume dying down and such low volatility, we may expect an attempt to break the $400 (and then $415) level soon.

Traders should look for a trade opportunity when Ethereum increases its volume.

ETH/USD 4-hour Chart

Technical Factors:

Price is above its 21-period EMA and its 50-period EMA
Price is slightly above its middle B.B. (20-period SMA)
RSI is elevated (58.42)
Descending volume

Key levels to the upside Key levels to the downside

1: $400 1: $362

2: $415 2: $340

3: $496 3: $302

Ripple

XRP broke out from its triangle formation to the upside, but couldn’t reach past $0.31 mark. However, the pullback from a failed move didn’t discredit XRP’s break from the triangle formation, as the cryptocurrency managed to stay above the triangle. With the confirmed break, traders can expect XRP to either stay near $0.31 or push above it in the short-term unless some other catalyst sparks a movement to the downside.

Traders can look for an opportunity to trade when XRP breaks $0.31.

XRP/USD 4-hour Chart

Technical factors:

Price is above its 21-period and 50-period EMA
Price is below its middle B.B. (20-period SMA)
RSI is neutral (55.99)
Low volume

Key levels to the upside Key levels to the downside

1: $0.31 1: $0.285

2: $0.32 2: $0.266

3: $0.3328 3: $0.245

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Basic Strategies

You Must Know This ‘7-Day Period’ Forex Trading Strategy!

Post author By Reddy Shyam Shankar
Post date 6 August, 2020
No Comments on You Must Know This ‘7-Day Period’ Forex Trading Strategy!

Introduction

Trying to pick the top or bottom is one of the favorite things a trader likes to do. We tried to do that using the ‘Dolphin Strategy.’ We did that with no indicator support. We are again going to unveil a strategy that does pick a top or bottom with no indicator support. This strategy is called the 7-Day period strategy. Let us take a step back and think, indicators are nothing but a mathematical representation of prices, which are calculated in different ways.

Therefore, sometimes it is important to look at prices alone. The 7-day period strategy is based on the idea that after every seven days of consecutive strength, a currency pair’s move is due for a retracement. The question arises, why seven days? This number is derived after constantly watching the market for years. Often, a new trend emerges at the beginning of the week, and if the trend is strong, it can last for several days with no retracement.

Many psychologists believe that human beings have the best retention rates on numbers that are in groups of seven or less. This is one of the reasons why phone numbers in the U.S. only have seven digits, aside from the area code. We have seen that the seven-day reversal pattern is more accurate in a trending market. We gave occasionally seen those periods when the market continues to move in the same direction after seven days of the exhaustive movement, i.e., from the 8th day onwards. Even though the setup is rare, when it does occur, it is significant.

Time Frame

As the name of the strategy suggests, it can be traded only in the daily time frame.

Indicators

In this strategy, no indicators are used. Simple Moving Average (SMA) can put on the chart to get a clear idea of the trend.

Currency Pairs

This strategy can be applied to all the currencies in the forex market. Exotic pairs should be avoided.

Strategy Concept

The basic idea of the strategy is that when the market is strongly trending on the hourly chart, the retracement does not last more than seven days and changes its direction at the sixth or seventh day. This retracement is considered to over-extended, which leads to a strong reversal in the pair.

If the sixth or seventh candle coincides with a key technical level, the ‘move’ may very well stall at that level and continue its major trend. To implement the strategy effectively, we need to know trends and trend retracement. Since this strategy is based on fixed rules and price action, it is not necessary to know about technical indicators. However, SMA and ATR can be used for trend identification and measuring the momentum of the market.

Trade Setup

In order to understand how the strategy works, we will apply it on the USD/CAD currency pair and execute a ‘short’ trade using the strategy.

Step 1

The first step is to identify the direction of the market. As this is a trend trading strategy, we should be able to identify the major direction of the market. If the market is making higher highs and higher lows, it is an uptrend, or if the market is making lower lows and lower highs, it is a downtrend. A trend can also be determined using the Simple Moving Average (SMA) indicator. Very simply, if the price is below SMA, we say that the market is in a downtrend, and if the price is above the SMA, the market is said to be in an uptrend.

In the example we have considered, from the below image, it is clear that the market is in a strong downtrend.

Step 2

Next, wait for a retracement from the highest or the lowest point, which we will be evaluated based on our strategy rules. The retracement should be such that there are seven consecutive candles of the same color. One or two candles of the opposite color are okay, but we need to make sure that it does not impact the structure of the retracement. These seven candles represent an extended pullback, which can lead to reversal any moment.

In the below image, we can see seven days of the up movement, which is exactly the kind of retracement which we need for the strategy.

Step 3

In this step, we need to check the position of the price after seven straight days of the movement. The strategy works best if the price coincides with a key technical level of support and resistance. This is because, in these areas, the price action is very strong, and market moves as per expectations. But it is important to make sure that no step of the strategy is used individually. All of them need to be used collectively.

We enter the market once we get confirmation after the 7-day period. The confirmation is nothing but a bullish candle in case of a ‘long’ setup and a bearish candle in case of a ‘short’ setup.

In our example, we see that the price has approached the previous ‘lower high’ of the downtrend. This is an area where we can expect sellers to get active and take the price lower.

Step 4

Finally, we need to determine the ‘stop-loss’ and ‘take-profit‘ for the strategy. We place the stop-loss a little higher than the bullish candle when entering for a ‘long’ and little lower the bearish candle if entering for a ‘short.’ We take profit at two places in this strategy. The first take-profit is set at the previous higher high or lower low, while the second take-profit is set at 1:2 risk to reward.

Strategy Roundup

As there are many conditions associated with the strategy, the setup might be rare, but when it does occur, it is significant. We have seen trends where the retracement occurs for just a few days before it starts moving in the direction of the major trend. But these setups are not reliable. The most important condition of this setup is the continuous appearance of bullish or bearish candles for seven days.

Tags 7-Day Period Strategy, Basic Trading Strategies, Education, Forex, Forex Strategies, Forex Trading, Simple Moving Average, SMA, Technical Analysis, trading

Forex Basic Strategies

Divergence Trading – MACD Regular Divergence Forex Strategy

Post author By Reddy Shyam Shankar
Post date 6 August, 2020
No Comments on Divergence Trading – MACD Regular Divergence Forex Strategy

Introduction

MACD regular divergence is a trading strategy that considers the relationship between Moving Average Convergence Divergence and the price.

MACD, a technical indicator, invented by Gerald Appel in 1979. It is very famous among professional and institutional traders; therefore, it can provide a reliable trading opportunity. On the other hand, divergence is a significant concept in trading that happens between the price and oscillator.

In most of the cases, oscillators like MACD or RSI move with the price. However, there is some condition where MACD does not follow the same direction of the price and creates divergence.

What is the MACD Divergence Strategy?

MACD is a Momentum based indicator that shows the correlation between two moving averages. Traders use this indicator in stocks, bonds, and forex trading as a trend continuation and reversal indicator. If you want to become a successful forex trader, MACD would be the best indicator to follow.

If you use a momentum-based strategy, MACD is the best available technical indicator for you. If you trade using the MACD divergence strategy, it will show you the proper entry and exit points.

There are several types of divergence, but in most cases, investors use the following types of divergences:

Hidden Divergence

It happens when the MACD histogram creates divergence with the price. It indicates a minor market reversal and significant trend continuation.

Regular Divergence

It happens when MACD EMA moves to the opposite direction of the price. Regular divergence from a significant support or resistance level indicates a potential market reversal.

In the example below, we can see a naked chart with a MACD indicator.

If you look at the image, you can see several lower lows, and higher highs in the price and MACD EMA also followed the same direction. However, there is some point where the price and MACD did not follow the same direction as indicated in the image below.

This is how divergence forms in the price. It indicates a potential market reversal if it happens from significant support or resistance levels.

Bullish MACD Regular Divergence Trading Strategy

Bullish MACD regular divergence happens when the price of a currency pair moves to the opposite direction of the MACD histogram from a significant support level. Therefore, bullish MACD divergence strategy is considered as the positive divergence signal.

Timeframe

In this trading strategy, there is no specification of the timeframe. However, this trading strategy works well in H1 and H4 timeframe.

Currency Pair

The MACD divergence trading strategy works well in most major and minor currency pairs, including EURUSD, GBPUSD, USDJPY, and AUDUSD.

Location of the Divergence

It is essential to identify the location of the price. In this bullish divergence trading strategy, the price should form the divergence in a critical support level. Any divergence from a random place rather than a vital level would not provide good profitability. Before moving to the entry point, we should find Negative Positive and Negative (NPN) MACD histogram to form.

Entry

After forming the divergence, we should wait for a bearish reversal candlestick to enter the trade. Make sure to enter the trade as soon as the candle closes.

Stop Loss and Take Profit

In the bullish divergence trading strategy, stop loss would be below the reversal candlestick candle with 10-15 pips buffer.

The first take profit level would be based on 1:1 risk: reward, where you should close 50% of the trade and move the stop loss at breakeven. Later on, the 2nd take profit level would be based on near term event level from where the market is expected to show some correction.

However, as part of the trade management, you can extend the take profit level based on the market momentum. If the price shows an impulsive bullish pressure near the resistance level, it may break the level by creating a new high. In that case, you can extend the take profit level if your trade management system allows.

Bearish MACD Regular Divergence Trading Strategy

Bearish MACD regular divergence happens when the price of a currency pair moves to the opposite direction of the MACD histogram from a prominent resistance level. It is also considered as a negative divergence signal.

Timeframe

Similar to the bullish divergence, this trading strategy works well in H1 and H4 timeframe. You can use this trading strategy in all timeframes, but the higher timeframe provides a reliable result. On the other hand, traders often find it challenging to observe the price in daily and weekly timeframes. Therefore, H1 and H4 are ideal for swing traders.

Currency Pair

The bearish MACD divergence trading strategy works well in most major and minor currency pairs, including EURUSD, GBPUSD, USDJPY, and AUDUSD.

Location of the Divergence

It is essential to identify the location of the price. In this bearish regular divergence trading strategy, the divergence should format a significant resistance level. Any divergence from a random place would not provide good profitability.

Before moving to the entry point, we should find Positive Negative Positive (PNP) MACD histogram to form.

Entry

After forming the divergence, we should wait for a bullish reversal candlestick to enter the trade. Make sure to enter the trade as soon as the candle closes.

Stop Loss and Take Profit

In the bullish divergence trading strategy, stop loss would be above the reversal candlestick candle with 10-15 pips buffer.

Summary

Let’s summaries the MACD regular divergence trading strategy:

Find the divergence based on NPN and PNP from a significant level.
Enter the trade after a reversal candlestick formation.
Stop-loss should be below or above the reversal candlestick with 10 to 15 pips buffer.
The first take profit would be based on 1:1 risk: reward ratio, and the second take profit would be based on the price action on the next event level.

There are more ways to use divergence as a trading strategy. Besides the divergence formation, you should focus on how the price is approaching a critical level. Any weakness at a significant level would indicate the first impression of market reversal. Later on, the divergence would indicate the final try of the opposite party. Happy Trading!

Tags Education, Forex, Hidden Divergence, Indicator Based Trading, MACD, MACD Divergence, Moving Average, Regular Divergence, Technical Analysis, Technical Trading, trading

Crypto Market Analysis

Daily Crypto Review, August 6 – ‘Ethereum Is a Ponzi Scheme’ – Adam Back; ETC Suffers Yet Another 51% Attack

Post author By Ilija Rankovic
Post date 6 August, 2020
1 Comment on Daily Crypto Review, August 6 – ‘Ethereum Is a Ponzi Scheme’ – Adam Back; ETC Suffers Yet Another 51% Attack

The cryptocurrency market ended up mostly in the green, with (of course) a few exceptions. Bitcoin is currently trading for $11,665, which represents an increase of 3,46% on the day. Meanwhile, Ethereum gained 1.6% on the day, while XRP gained 1.41%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Band Protocol gained 36.21% on the day, making it the most prominent daily gainer. Travala.com (24%) and Bancor (22.19%) also did great. On the other hand, Nexohas lost 21.32%, making it the most prominent daily loser. It is followed by The Midas Touch’s loss of 8.47% and THORChain’s loss of 7.70%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has increased since we last reported, with its value currently at 61.48%. This value represents a 0.31% difference to the upside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization has increased since we last reported. Its current value is $353.48 billion, which represents an increase of $12.09 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization continued its move towards the upside after a few days of indecisiveness and consolidation. Bitcoin saw a slight increase in volume, which brought the price above the $11,460 resistance level and up to $11,820. However, the move stopped there (for now), and Bitcoin is currently consolidating above the $11,460 level, testing it as support.

BTC traders should look for an opportunity to make a trade when BTC confirms or fails to confirm its position with $11,460.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA, as well as its 21-period EMA
Price is near its top B.B
RSI is elevated (62.37)
Volume is increasing

Key levels to the upside Key levels to the downside

1: $11,460 1: $11,090

2: $11,630 2: $10,855

3: $12,000 3: $10,505

Ethereum

Ethereum seems to be back on its steady upwards path, which began on July 21. The second-largest cryptocurrency by market cap rose steadily throughout the day, trying to reach past the $415 resistance. While the price did not yet reach this mark, it did increase slightly, supported by the 21 and 50-period moving averages.

Traders should look for a trade opportunity within the range ETH is currently in.

ETH/USD 4-hour Chart

Technical Factors:

Price is above its 21-period EMA and its 50-period EMA
Price is slightly above its middle B.B. (20-period SMA)
RSI is elevated (60.26)
Descending volume

Key levels to the upside Key levels to the downside

1: $415 1: $362

2: $496 2: $340

3: $302

Ripple

XRP experienced sideways movement on low volume throughout the day. The third-largest cryptocurrency by market capitalization was trading near the top of its triangle formation, unable to break it yet. However, the decreasing volume, as well as the price approaching the 80% mark of the formation, indicate a move which will take XRP out of the triangle formation. While it is too early to speculate, XRP seems to have a better chance of breaking to the upside.

Traders can look for an opportunity to trade when XRP breaks its triangle formation.

XRP/USD 4-hour Chart

Technical factors:

Price is above its 21-period and 50-period EMA
Price is below the middle B.B. (20-period SMA)
RSI is neutral (55.62)
Low volume

Key levels to the upside Key levels to the downside

1: $0.32 1: $0.285

2: $0.3328 2: $0.266

3: $0.245

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, August 06 – Top Trade Setups In Forex – A Day Before NFP!

Post author By Ali B.
Post date 6 August, 2020
1 Comment on Daily F.X. Analysis, August 06 – Top Trade Setups In Forex – A Day Before NFP!

It’s going to be a busy day from a news perspective, especially for the GBP pairs. The Bank of England is scheduled to publish its Monetary policy with bank rates. Although economists are not expecting BOE to change interest rates, the MPC Asset Purchase Facility Votes is expected to change. Nine out of nine members have voted to increase the asset purchase program to accommodate the economy.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The Euro remained broadly appealing overall. Throughout the coronavirus pandemic, the E.U. and the European Central Bank have handled the crisis well compared to other major economies like the U.K. & U.S.

From US Side, the ISM Non-Manufacturing PMI rose in July to 58.1 from the expected 55.0 and supported the U.S. dollar. Though the data was against the movement of EUR/USD pair, however, pair still moved in the upward direction.

Daily Technical Levels

Support	Pivot	Resistance
1.1802	1.1854	1.1915
1.1740		1.1968
1.1688		1.2029

EUR/USD– Trading Tip

The technical side of the EUR/USD remains mostly the same as it’s trading with a bullish bias around 1.1880 level. On the higher side, the EUR/USD pair may find resistance at 1.1909 level, and the closing of candles below this level can keep bearish pressure on EUR/USD. A bullish breakout of this level can extend the buying trend until 1.2050. Today, the EUR/USD is likely to find support at 1.1800 level.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.31133 after placing a high of 1.31614 and a low of 1.30528. The pound rose on Wednesday to remain on course for a third-straight weekly gain against the U.S. dollar and ignored weaker than expected economic data ahead of the Bank of England meeting on Thursday. On Wednesday, the Final Services PMI in July came in as expected 56.5 points and indicated expansion in the services sector in the U.K.

This Thursday, the focus will be on the Bank of England’s monetary policy decision and Andrew bailey’s speech. The central bank of England is anticipated to keep interest rates unchanged but will roll out its forecasts on a range of economic measures, including Inflation, GDP, and unemployment. In recent weeks, debates have been under discussion about the BoE’s cutting of rates below zero, but Thursday’s meeting is unlikely to offer detailed insight.

The NIRP (Negative Interest Rate Policy) has been under active review at the Bank of England, but it seems like a little too early for the central bank to make any decisive move. Some analysts expect that the Bank of England will prefer to hold off on using a negative interest rate until the EU-UK relationship for 2021 gets cleared.

However, in July, the Final Services PMI rose to 50.0 from expected 49.6, and the ISM Non-Manufacturing PMI rose to 58.1 from expected 55.0. This showed an expansion in America’s services sector in July and gave support to the U.S. dollar that weighted on additional gains in GBP/USD pair.

The U.S. dollar was so under pressure that even the goodish rebound in the U.S. Treasury bond yields failed to support the U.S. dollar.

Apart from this, the rising number of coronavirus cases in the U.K. and the renewed fears of no-deal Brexit as both sides were lagging in the progress of securing a deal, held investors to place any aggressive bullish position in the GBP/USD pair ahead of BoE monetary policy.

Daily Technical Levels

Support	Pivot	Resistance
1.3060	1.3111	1.3166
1.3005		1.3217
1.2954		1.3271

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3085 level, holding right below the triple top resistance area of 1.3101 level while the bullish breakout of 1.3105 can drive more buying in the GBP/USD pair. On the higher side, the GBP/USD may find resistance at 1.3175, while support can be found around 1.3056 and 1.3022 level. Let’s keep an eye on 1.3125 to extract a bearish bias in the GBP/USD pair today. A bearish breakout of 1.3050 can drive more selling until 1.3005.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.592 after placing a high of 105.871 and a low of 105.318. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair extended the decline on the back of the weaker U.S. dollar across the board and bank of Japan governor Kuroda’s speech telling that Japan’s economy will improve in the second half of the year.

The Bank of Japan Governor Haruhiko Kuroda warned that in order to contain the spread of public health measures were re-introduced, then the economic activity could be significantly constrained. He also affirmed that Japan was not slipping into deflation and that the central bank would continue with its efforts to achieve the inflation target of 2%. Kuroda again assured that the Bank of Japan will be ready to ramp up the monetary stimulus without hesitation if needed to aid the economy through the pandemic crisis.

Kuroda also said that Japan’s financial system was quite safe and stable and countered the fears that the banking sector would fall out from COVID-19. He also warned that if pandemic prolonged longer than expected, there will be risks to Japan’s financial stability.

He said that Japanese and overseas economies would gradually improve from the second half of this year despite extremely high uncertainties. But the pace of improvement is likely to be moderate as the preventive measures to control the virus spread has its effects on economic activity.

On the other hand, the greenback was the worst performer in the currency market on Wednesday. It was so under pressure that it could not benefit from the latest round of economic data that showed an improvement in the Service Sector of the U.S. The rebound in the U.S. Treasury yield also could not support the U.S. dollar. The U.S. Dollar Index (DXY) was testing the 92.60 level lowest since last week.

On Wednesday, U.S. President Donald Trump said that big jobs were coming on Friday. However, private payroll data by ADP reported on Wednesday that just 167,000 jobs were created in July.

However, USD bulls did not cheer the positive data, and the U.S. dollar remained under stress on Wednesday to post losses on the day.

On the US-China front, China’s ambassador to Washington said that China did not want to see a Cold War break out between China and the U.S. He suggested that both countries need to work to repair their relations that were under extraordinary stress.

Daily Technical Levels

Support	Pivot	Resistance
105.3100	105.6000	105.8800
105.0300		106.1700
104.7400		106.4500

USD/JPY – Trading Tips

The USD/JPY is trading with the bearish sentiment, especially after violating the 38.2% Fibonacci support level of 105.650. On the lower side, the USD/JPY may find support at 105.078 level, which is extended by the 61.8% Fibonacci retracement level. A bearish breakout of 61.8% level can drive more selling until the next support area f 104.200. The current market price of USDJPY is staying below 50 EMA, which extends resistance at 105.650 level. Let’s consider selling below 105.650 level today. Good luck!

Tags Daily Brief, EURUSD, Forex, forex review, Forex Trading, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, Trade Setup, trading, USDJPY

Forex Basic Strategies

Everything About The ‘RSI Rollercoaster’ Forex Trading Strategy

Post author By Reddy Shyam Shankar
Post date 5 August, 2020
No Comments on Everything About The ‘RSI Rollercoaster’ Forex Trading Strategy

Introduction Sometimes it is best to choose the simplest path of trading. The Relative Strength Index (RSI), invented by Welles Wilder, is one of the oldest and most popular technical analysis tools. If best traders in the world were asked to rank the technical indicators, RSI would certainly be accorded in the top five. It […]

Introduction

Sometimes it is best to choose the simplest path of trading. The Relative Strength Index (RSI), invented by Welles Wilder, is one of the oldest and most popular technical analysis tools. If best traders in the world were asked to rank the technical indicators, RSI would certainly be accorded in the top five. It has the unique ability to measure turns in price by measuring the momentum of the turn, which is impossible by any other technical tool in technical analysis.

The standard RSI setting of 70 and 30 serves as a clear sign of overbought and oversold, respectively. The RSI rollercoaster is a strategy that we have developed to take advantage of these turns in the market. The purpose of RSI rollercoaster is to make money from range-bound currency pairs.

Time Frame

This strategy is suitable for trading on the ‘daily’ time frame. It can also be used on the smaller time frames, but the success rate is not very encouraging.

Indicators

As the name suggests, we will be using the RSI indicator for the strategy. No other indicators will be used. Sime knowledge of price action will be helpful.

Currency Pairs

This strategy applies to all the currency pairs listed on the broker’s platform. If trading on the lower time frame, we need to look for highly liquid currency pairs.

Strategy Concept

The key to the RSI rollercoaster strategy versus the traditional RSI strategy is the way of trading the overbought and oversold levels. Here we look for a reversal candle, which provides a sign of exhaustion before taking the trade. This way, we prevent ourselves from picking the top or bottom of a ‘range’ by waiting for an indicator confirmation.

This strategy works best in a ‘ranging’ market where overbought and oversold signals are far more true indications of change in direction. Furthermore, from experience, we have observed that the setup is much more accurate on the ‘daily’ charts than on the smaller time frames such as the 4 hours or 1 hour.

The primary reason for this difference is that ‘daily’ charts include far more data points into their subset and, therefore, change in momentum tends to be more meaningful on longer time frames. Nevertheless, the disproportionate risk to reward ratio in this setup makes even the shorter time frame trades worth considering. We keep in mind that although the setup will fail more frequently on the shorter time frames, the losses will generally be smaller, keeping the overall risk manageable.

Trade Setup

In order to explain the strategy, we have considered an example of such a trade that was carried out on the USD/CAD pair. As the strategy produces a better result on the ‘daily’ time frame, we will be applying it to the ‘daily’ time frame chart. Let us see the steps to execute the strategy.

Step 1

The first step of the strategy is to open the ‘daily’ (preferable) time frame chart of the desired currency pair. Identify key levels of ‘support’ and ‘resistance.’ A ‘support’ or ‘resistance’ is only valid if the price has reacted off from this area at least twice. If the price has reacted only once, that means a ‘range’ has not yet been established.

The below image shows the clear formation of a ‘range’ where the price has reacted multiple times from the ‘ends.’

Step 2

In this step, we wait for the RSI indicator to cross above the 70 ‘mark ‘when the price is near ‘resistance’ or cross below the 30 marks when the price is near ‘support.’ During this time, the price action of the chart is not of much importance. Once the RSI shows a reading below 70 after crossing it, we will look for ‘sell’ opportunities depending on the price action. Similarly, when the RSI shows a reading above 30 after crossing below it, we will look for ‘buy’ opportunities depending on the price action.

In this case, we can see that the price breaks down below ‘support,’ which is an indication of ‘sell’ as per the theory of support and resistance. But as per our strategy, we will not be looking at the price action in this step, and we will focus only on the RSI indicator.

A few days later, we see that the RSI goes below the 30 ‘mark’ for a moment and starts moving higher. This is our first indication of going ‘long’ in the market.

Step 3

We ‘enter’ for a ‘sell’ when the price moves back into the ‘range’ after the indication from RSI. Similarly, we enter for a ‘buy’ when the price moves back into the ‘range’ after the indication from RSI. This price action indicates a false breakout or breakdown, which is identified rightly with the help of an indicator.

In our case, we are entering ‘long’ in the currency pair after we get a confirmation in the form of a bullish candle, as we can see in the below image.

Step 4

In this step, we determine the ‘stop-loss’ and ‘take-profit‘ levels for the strategy. When executing a ‘long’ trade, the stop-loss will be placed just above the ‘high’ where the price created a false breakout. And when executing a ‘sell’ trade, the ‘stop-loss’ will be placed just below the ‘low’ from where the price created a false breakdown. The ‘take-profit’ depends on the major trend of the market. If we are trading against the trend, it should be kept at 1:1 risk to reward or even a little lesser than that. If the ‘trade’ is taking place with the trend, it can be kept at 1:2 risk to reward.

Strategy Roundup

The RSI rollercoaster strategy is designed to squeeze as much profit as possible out of the turns at ‘support’ and ‘resistance.’ Instead of immediately entering into a position when the market moves into an overbought or oversold zone, the RSI, along with a little bit of price action, keeps us away from the market until we get a confirmation sign of the exhaustion. The RSI rollercoaster is almost always in the market, as long as we see wild moves on either side of the ‘range’ to stop-out traders.

Tags Education, Forex, Forex Trading, Indicator Based Trading, Relative Strength Index, RSI, RSI Rollercoaster Strategy, Technical Analysis, trading, Trading Strategies

Forex Market Analysis

Daily F.X. Analysis, August 05 – Top Trade Setups In Forex – Advanced NFP In Focus!

Post author By Ali B.
Post date 5 August, 2020
No Comments on Daily F.X. Analysis, August 05 – Top Trade Setups In Forex – Advanced NFP In Focus!

We have a series of low and medium impact events coming ahead, and the focus will be on the Eurozone’s Services PMI, U.S. Advance NFP, and U.S. ISM non-manufacturing events. The U.S. events are forecasted to be negative but positive data may drive selling trend in gold; let’s brace for it.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18024 after placing a high of 1.18057and a low of 1.17211. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair climbed to 1.1800 level from 1.17200 level on Tuesday after the U.S. Dollar Index fell by 0.1% to 93.45 level. However, the U.S. dollar index spent most of the day in positive territory but failed to keep its gains. The U.S. Treasury yields were lower on Tuesday, and the equity prices were high that weighed on the U.S. dollar. The 10-year U.S. Treasury bond yield was down to 0.513% level, the lowest level since March.

The weakness in the U.S. dollar was the main driver of the EUR/USD pair on Tuesday. On the data front, the IBD/TIPP Economic Optimism rose to 46.8 from the expected 45.3 and supported the U.S. dollar. The Factory Orders from June were also increased to 6.2% from the forecasted 5.1% and supported the U.S. dollar.

From the European side, the French Government Budget Balance showed a deficit of 124.9 B in June as compared to the deficit of 117.9 B in May. At 12:00 GMT, the Spanish Unemployment Change came in as -89.8K against the forecasted 19.5K and supported EUR. At 14:00 GMT, the Producer Price Index for June surged to 0.7% against the expected 0.6% and supported EUR.

The European side’s macroeconomic data came in favor of the EUR/USD pair and took its prices above the 1.1800 level. Meanwhile, on Tuesday, the U.S. Congress Senate Democratic leader Chuck Schumer said that talks with the White House were finally moving in the right direction. However, they still were far apart on some issues. The gap between the two parties was about priorities and scale. Even though the difference was also mentioned, investors cheered the news that the talks were heading in the right direction and boosted their mood.

The equity prices rose, and the U.S. dollar suffered as the issuance of new stimulus weighed on the U.S. dollar. The weakness of the U.S. dollar ad rise in equity prices gave a push to EUR/USD pair. This Wednesday, the market will release the final versions of its July Services PMI for most major economies that are mostly expected to suffer upward revisions from preliminary estimates. E.U. will also reveal Retail Sales data for June. While the U.S. will release the ADP survey on private employment for July and the Non-ISM Manufacturing PMI. Traders will keep a close watch on both releases.

Daily Technical Levels

Support	Pivot	Resistance
1.1707	1.1752	1.1808
1.1651		1.1853
1.1605		1.1909

EUR/USD– Trading Tip

The EUR/USD shows another round of buying to trade at 1.1810 level. A recent breakout of the 1.1800 level is likely to lead EUR/USD prices further higher until 1.1849 and 1.1910 level. However, the support may be found around 1.1795 and 1.1760 area. Bullish bias will be stronger over the 1.1820 breakouts. The RSI and MACD are holding in the bullish zone while the 50 periods EMA is also suggesting potential for a bullish trend continuation today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30701 after placing a high of 1.31079 and a low of 1.29810. Overall the movement of GBP/USD pair remained flat throughout the day. The pair GBP/USD reached a lower level of 1.2980, but it recovered from that level to settle once again around 1.3070 level in the late session. The decline and the later recovery was once again about the U.S. dollar as investors continued to ignore U.K. news and focused on USD news.

The U.S.’s macroeconomic data about factory orders in June rose to 6.2% from the anticipated 5.1% and supported the U.S. dollar that kept the GBP/USD pair under pressure.

However, the U.S. Senate Democratic leader’s latest statement that both Republicans & Democrats were moving in the right direction regarding the U.S. stimulus package weighed on the U.S. dollar. The U.S. Dollar Index dropped to 93.4 level, and the U.S. Treasury yield for a 10-year bond also dropped. Whereas, the equity prices rose that weighed further on the U.S. dollar.

On the other hand, the lack of progress in trade talks between the E.U. & the U.K. has shifted the attention to other economies. As the kingdom has started talks with the United States, that has shown little progress.

Furthermore, Toshimitsu said on Tuesday that Japan’s foreign minister would visit the U.K. this week to meet his counterpart to wrap up talks over a free-trade agreement between both countries.

However, earlier on the day, UK PM Boris Johnson announced another round of stimulus focused on the home construction and infrastructure to boost the economy. The suggested investment of around 900 million pounds out of 360 million pounds will be allocated towards delivering 26,000 new homes on brownfield land.

The demand for Sterling was also cooled down after the latest lockdown was imposed in the London area amid the resurgent coronavirus cases.

Meanwhile, considering the possible delay at the customs union’s border after leaving the E.U.’s single market, the U.K. government issued a letter in writing to pharmaceutical companies urging them to stockpile medicine for next year.

The health department advised firms to stockpile six weeks’ worth of supplies for the end of the Brexit transition period. However, the pharmaceutical industry has already warned earlier this year that COVID-19 had used up entirely some supplies.

Besides, the Boris Johnson’s government was resurrecting a plan to turn a 15 mile stretch of motorway into a contraflow system to be prepared for delays at Britain’s border with the European Union in early next year.

Moreover, China’s ambassador to the United Kingdom said that China wanted the UK to be a friend, but if the U.K. wants to make China a hostile country, then it will have to bear the consequences. This statement was followed by the move from PM Boris Johnson in which he announced plans to ban equipment purchases from the Chinese telecommunication group Huawei on espionage concerns. There was no reason for a directional move in the GBP/USD pair, and that is why the currency pair remained flat throughout the day on Tuesday.

Daily Technical Levels

Support	Pivot	Resistance
1.2863	1.2908	1.2978
1.2792		1.3024
1.2747		1.3094

GBP/USD– Trading Tip

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.716 after placing a high of 106.193 and a low of 105.635. Overall the movement of the USD/JPY pair remained bearish throughout the day.

The pair USD/JPY dropped on Tuesday amid the progress in a new stimulus package from the U.S. Congress. The U.S. Dollar Index was down by 0.20% on Tuesday at 93.4 level, and the U.S. treasury yield was also down to its multi-month low of 0.51%.

The U.S. Senate Democratic leader Chuck Schumer said that negotiations with the White House were finally moving in the right direction, but they still were far apart on some issues. He said that the difference between the two parties on the U.S. Stimulus package was about priorities and scale.

Investors ignored the differences part of the statement and focused more on the progress in talks part, and hence, the U.S. dollar suffered. The USD/JPY dropped below 106 level as the cost of supporting the U.S. economy through its struggles to contain the pandemic was under discussion.

At the beginning of the day, Japan published Tokyo Inflation data for July, which rose to 0.4% from the estimated 0.2% and supported the Japanese Yen. The Monetary Base from japan also rose to 9.8% from the forecasted 7.1% and supported the Japanese Yen. Japan’s stronger than expected data weighed on the USD/JPY pair and dragged it below 106 level on Tuesday.

On the US-China front, to assess China’s efforts to fulfill the promises made in the bilateral trade agreement signed in January, the U.S. & China have agreed to conduct high-level talks on August 15. The relations between the U.S. 7 China have been deteriorated because of many issues, including the coronavirus outbreak, Hong Kong, and human rights abuses in western China. The only matter for mutual concern between both countries seems to be like the trade deal and assessed in mid-August.

Moreover, Satya Nadella, the Chief Executive of Microsoft Corp., has signed an agreement to take over the U.S. operations of the TikTok app. The Microsoft Corp. and the Chinese parent company of TikTok, named ByteDance Ltd., had a deal on Tuesday that would allow Microsoft to run TikTok operations in Canada, US, Australia, and New Zealand. This agreement satisfied both companies & their shareholders and the two governments that are under bitter competition for technological clout.

On the other hand, this Wednesday, Japan will release the final July Bank Services PMI, and the Bank of Japan’s Governor Kuroda will give a speech about central banking in the coronavirus era. From the U.S., the ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI will be key to watch.

Daily Technical Levels

Support	Pivot	Resistance
104.80	105.25	105.55
104.50		106.00
104.05		106.30

USD/JPY – Trading Tips

The USD/JPY trades with a bullish sentiment around 105.950 level, having completed 61.8% Fibonacci retracement at 106.063. The pair is forming a bearish engulfing candle below 106.406 level, the level that worked as a support for USD/JPY in now it’s working as a resistance. On the higher side, next USD/JPY may find resistance at 106.650, while support stays at 105.250. The MACD and RSI both are suggesting bullish bias in USD/JPY pair today. Let’s consider staying bullish over 105.550 level today. Good luck!

Tags Daily Brief, EURUSD, Forex, forex review, Fundamental Analysis, GBPUSD, Technical Analysis, Technical Outlook, trading, USD-JPY, USDJPY

Crypto Market Analysis

Daily Crypto Review, August 5 – XRP Drops by 6% Despite Fundamentals Booming

Post author By Ilija Rankovic
Post date 5 August, 2020
No Comments on Daily Crypto Review, August 5 – XRP Drops by 6% Despite Fundamentals Booming

The cryptocurrency market had a day without much movement. Bitcoin is currently trading for $11,166, which represents a decrease of 1.52% on the day. Meanwhile, Ethereum lost 2.66% on the day, while XRP lost 6%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Band Protocol gained 15.33% on the day, making it the most prominent daily gainer. The Midas Touch (13.97%) and Kava.io (12.79%) also did great. On the other hand, Quant has lost 15.75%, making it the most prominent daily loser. It is followed by Ampleforth’s loss of 14.84% and MCO’s loss of 11.32%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has increased since we last reported, with its value currently at 61.17%. This value represents a 0.37% difference to the upside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization has decreased slightly since we last reported. Its current value is $341.39 billion, which represents a decrease of $6.78 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap had a slow day, with its price being locked in a range bound by The $11,460 resistance and $11,090 support. Bitcoin continuously retested its immediate support, but the lack of volume and pressure towards the downside brought nothing to the BTC bears. Bitcoin’s downside is also guarded by the 50-period moving average, which is sitting right under $11,090.

BTC traders should look for an opportunity to make a trade when BTC breaks $11,460 or falls below $11,090.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA, but below its 21-period EMA
Price is near its middle B.B (20-period SMA)
RSI is neutral (47.67)
Volume decreasing

Key levels to the upside Key levels to the downside

1: $11,460 1: $11,090

2: $11,630 2: $10,855

3: $12,000 3: $10,505

Ethereum

Ethereum has a slow day as well, with its volume normalizing and volatility fading. The second-largest cryptocurrency by market capitalization oscillated between $401 and $380 over the course of the day. The cryptocurrency seems like it will be trading within the range bound by $415 and $362 for some time now.

Traders should look for a trade opportunity within the range ETH is currently in.

ETH/USD 4-hour Chart

Technical Factors:

Price is above its 21-period EMA and its 50-period EMA
Price is currently at its middle B.B. (20-period SMA)
RSI is elevated (57.69)
Descending volume

Key levels to the upside Key levels to the downside

1: $415 1: $362

2: $496 2: $340

3: $302

Ripple

XRP experience a day with a bit more volatility than Bitcoin and Ethereum, with its price dropping down to below $0.3 levels. While the move to the downside seems to be stopped by the 21-period moving average for now, XRP will certainly move somewhere (more likely to the downside. On top of that, XRP has formed a triangle formation, which gives us a possible time estimate of its next move.

Traders can look for an opportunity to trade when XRP breaks the triangle formation.

XRP/USD 4-hour Chart

Technical factors:

Price above 21-period and the 50-period EMA
Price is below the middle B.B. (20-period SMA)
RSI is neutral (54.18)
Average volume

Key levels to the upside Key levels to the downside

1: $0.32 1: $0.285

2: $0.3328 2: $0.266

3: $0.245

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, August 04 – Top Trade Setups In Forex – Profit Taking In USD Continues!

Post author By Ali B.
Post date 4 August, 2020
No Comments on Daily F.X. Analysis, August 04 – Top Trade Setups In Forex – Profit Taking In USD Continues!

The fundamental side of the market continues to be muted due to a lack of economic events. Therefore, we still need to keep an eye on COVID19 updates, U.S. China trade war issues, and today’s technical levels.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17626 after placing a high of 1.17966 and a low of 1.16956. Overall the movement of the EUR/USD pair remained flat yet bearish throughout the day. The EUR/USD exchange rate fell by -0.2% on Monday as Euro failed to gain against the U.S. dollar despite stronger than expected Eurozone Manufacturing PMI for July but did not remain there and reverted to the same level it started its day with. Investors have become more hopeful that the Eurozone’s economy could be on the road to recovery as Manufacturing PMI showed an expansion in the industry throughout Europe.

The Eurozone economy showed a positive start to the third quarter, with production growing at the fastest rate for over two years fueled by an encouraging surge in demand. The growth of new orders outperformed the production and hinted that August would see further output gains. The business confidence has also been restored due to the improvement in the order book. However, Euro traders were cautious on Monday as the number of coronavirus cases continues to grow throughout Europe. Consequently, markets became cautious that the second wave of the virus could severely compromise the bloc’s economy.

On the data front, at 12:15 GMT, the Spanish Manufacturing PMI for July exceeded the expectations of 52.6 and came in as 53.5 to support single currency Euro. At 12:45 GMT, the Italian Manufacturing PMI for July rose to 51.9 from the expected 51.3 and supported Euro. At 12:55 GMT, The French Final Manufacturing PMI also exceeded the expectations of 52.0 and rose to 52.4 and supported Euro. At 12:55 GMT, the German Final Manufacturing PMI for July was expected to release as 50.0 but came in as 51.0 and supported Euro. At 13:00 GMT, the Final Manufacturing PMI from the whole bloc also rose to 51.8 points against the forecasted 51.1 and supported single currency Euro.

All data related to PMI from main European countries came in favor of EUR/USD and pushed it to the high near 1.1770 but failed to reverse the pair’s direction as the market sentiment was against EUR/USD pair.

On the other hand, from the U.S. side, the final Manufacturing PMI came in short of expectations of 51.3 as 50.9 and weighed on the U.S. dollar. It indicated that manufacturing activity in the U.S. in July was not very impressive as it was expected.

However, at 19:00 GMT, the ISM Manufacturing PMI came in favor of the U.S. dollar when it exceeded the expectations of 53.6 and came in as 54.2. It showed that manufacturing activity in the U.S. was expanded in July. As the ISM Manufacturing PMI was the highlighted data of the day, and as it came in favor of the U.S. dollar, the U.S. dollar gained traction and caused a decline in the prices of EUR/USD pair.

Daily Technical Levels

Support	Pivot	Resistance
1.1686	1.1730	1.1762
1.1654		1.1806
1.1610		1.1837

EUR/USD– Trading Tip

The EUR/USD has bounced off the previously suggested support level of 1.1708 level, and now it’s trading at 1.1765 area. On the hourly timeframe, the EUR/USD continues to form bullish candles, which suggest a slight bullish bias among investors despite profit-taking in the U.S. dollar. Now strong support stays at 1.1705. On the higher side, the EUR/USD may find support at 1.1796 level.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30756 after placing a high of 1.31125 and a low of 1.30044. Overall the movement of GBP/USD pair remained flat yet slightly bearish throughout the day. The pair GBP/USD pair was dropped in the earlier session on Monday on the back of profit-taking in the U.S. dollar, but the pair reverted back to its same level in the late closing session.

On Monday, the European Union showed a willingness to compromise to rescue troubled Brexit talks by softening its demand that Britain heeds E.U. rules on state aid. Brussels said that it could go for a compromise entailing a dispute-settling mechanism on any state aid granted by the U.K. to its companies. It means Brussels will no longer oblige London to follow bloc’s own rules from the outset.

The E.U. countries have long demanded so-called “Level Playing Field” guarantees from the U.K. if it requires the free selling of goods in the bloc’s lucrative single market of 450 million people after Brexit’s transition period ends. However, PM Boris Johnson and his government have refused to be bound by E.U. state aid rules, labor laws, or environmental standards as Brexit’s essence was to let Britain decide alone on its regulations.

The other significant sticking point of the negotiations was fishing rights in sea channels between the E.U. and Britain. The bloc has previously signaled that it was willing to compromise in that field if London shifted as well from its demands. Though the negotiations have not proven fruitful yet they have brought the sides closer in some other aspects and have made the E.U. cautiously optimistic about chances for an overall deal.

Meanwhile, the U.K. Prime Minister Boris Johnson said that the trade negotiations were in good progress with Japan. However, tensions with the bloc remain the same. The fishing industry urged the government to guide as the Brexit transition period was near to end without the sector’s definitions.

On the data front, at 13:30 GMT, the Final Manufacturing PMI for July came in line with the expectations of 53.3 and showed an expansion in the manufacturing sector of the U.K. At 18: 45 GMT, the Final Manufacturing PMI for July dropped to 50.9 points from the forecasted 51.3 and weighed on the U.S. dollar. At 19:00 GMT, the ISM Manufacturing PMI in July advanced to 54.2 from the forecasted 53.6 and supported the U.S. dollar. In June, the Construction Spending also dropped by -0.7% from the projected 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices in July rose to 53.2 against the anticipated 52.2 and supported the U.S. dollar.

The primary highlighted data ISM Manufacturing PMI came in favor of the U.S. dollar and weighed heavily on the GBP/USD pair that it started posting losses. The Pound traders will look forward to releasing the monetary policy decision by the Bank of England this week on Thursday. The bank’s statement about the negative interest rate decision and plans to help the economy through the pandemic will be observed to find fresh clues of the GBP/USD pair’s movement.

Meanwhile, the pair will follow the U.S. dollar and related events, including the ISM Non-Manufacturing PMI, that is scheduled to release on Wednesday. Apart from that, any progress in Brexit trade deal talks would also benefit/weigh the GBP/USD pair this week.

Daily Technical Levels

Support	Pivot	Resistance
1.2863	1.2908	1.2978
1.2792		1.3024
1.2747		1.3094

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3065 level, having completed the 50% Fibonacci retracement at 1.3060 level. On the higher side, the Sterling can find resistance at 1.3105. In the daily timeframe, the Cable has formed a Doji pattern, which is followed by a solid bullish trend at 1.3100 level, and it has the potential to drive bearish bias in the pair. Let’s keep an eye on 1.3125 to extract a bearish bias in the GBP/USD pair today. A bearish breakout of 1.3050 can drive more selling until 1.3005.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.947 after placing a high of 106.470 and a low of 105.578. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair rose to its highest level since July 24 at 106.47 Monday, but it started to decline afterward and presented a hammer-like candle.

The broad-based U.S. dollar strength at the starting day of the week provided a boost to USD/JPY pair. The rising U.S. Treasury bond yields helped the greenback continue to outperform its rivals, and the U.S. Dollar Index advanced to 94.00. The U.S. Treasury bond yield gained almost 5% on the day.

On the data front, at 4:50 GMT, the Prelim GDP for the second quarter from Japan came in as -0.6% against the expected -0.7% and supported Japanese Yen. At 4:55 GMT, the Prelim GDP Price Index for the year remained flat with the expectations of 0.9%. At 5:30 GMT, the Final Manufacturing PMI from Japan rose to 45.2 points against the forecasted 42.6. Better than expected macroeconomic data from Japan gave strength to the Japanese Yen that ultimately weighed on the USD/JPY pair in the earlier session.

From the U.S. side, the ISM data at 19:00 GMT showed that the economic activity in the U.S. manufacturing sector expanded at a stronger pace than expected in July. The ISM Manufacturing PMI rose from 52.6 to 54.2 and surpassed the forecast of 53.6.

The ISM Manufacturing Prices for July also increased to 53.2 against the forecasted 52.2 and the previous 51.3 and supported the U.S. dollar. The Wards Total Vehicle Sales from the U.S. surged to 14.5M in July from the previous 13.1M and the expected 14.0M. It also supported the U.S. dollar that ultimately pushed the USD/JPY pair on the upside.

On the other hand, the U.S. lawmakers are finding it difficult to reach a consensus for the U.S. coronavirus aid package. The Republicans are in favor of $ 1 trillion, while Democrats want to offer a package worth $3 trillion. This difference of opinion has caused a delay in the announcement of the U.S. recovery package. The delayed package announcement has made investors cautious, and they are keenly waiting for it to place bets on it.

However, on coronavirus front, the worldwide cases reached 18 million so far with major cities on renewed lockdown restrictions to control the spread. It raised the safe-haven appeal that pushed the Japanese Yen and kept checking on additional gains of the pair USD/JPY.

The coronavirus expert in White House said that the U.S. was in a new phase of the outbreak with infections extraordinarily widespread in both rural & urban areas. On the vaccine front, a mass vaccination campaign from the Russian health authorities was under preparation stage against the virus, and it will start in October. The media of Russia has quoted that doctors and teachers will be the first to receive the vaccine.

In response to this, the U.S. Dr. Anthony Fauci gave critic comments and said that he hoped that Russia and China were testing the vaccine before directing them to anyone. He said that the U.S. should have a safe and effective vaccine by the end of the year. He added that there would be no vaccine so far ahead of the U.S. that the U.S. will have to depend on other countries to get the vaccine. On the US-China front, President Trump threatened to ban the TikTok app in the United States that raised the fears for a halt of a phase-one trade deal and kept the market sentiment soar.

Daily Technical Levels

Support	Pivot	Resistance
104.80	105.25	105.55
104.50		106.00
104.05		106.30

USD/JPY – Trading Tips

Tags Daily Brief, EURUSD, Forex, Fundamental Analysis, GBPUSD, Technical Analysis, Technical Outlook, trading, USDJPY

Forex Course

143. Trading Breakouts Using Trend lines

Post author By Reddy Shyam Shankar
Post date 4 August, 2020
No Comments on 143. Trading Breakouts Using Trend lines

Introduction In our previous course lessons, we saw how to trade breakouts in an effective manner. As we know, Breakout trading is one of the most common ways of trading the financial markets. Most of the other trading tools tend to fail in accurately identifying a trading signal, or they lag a lot in doing […]

Introduction

In our previous course lessons, we saw how to trade breakouts in an effective manner. As we know, Breakout trading is one of the most common ways of trading the financial markets. Most of the other trading tools tend to fail in accurately identifying a trading signal, or they lag a lot in doing so. But that’s not the case with breakout trading. If done accurately, it helps traders in making consistent cash from the market.

In this lesson, let’s learn how to trade breakouts using trendlines. Trendlines are one of the simplest tools you can use to trade the breakouts on both lower and higher timeframes.

Trendline and it’s working!

A trend line highlights the ongoing trend by connecting the swing lower highs in an uptrend and swing higher lows in a downtrend. Just like S&R levels, trendlines also signify the appropriate areas to enter the market. The only difference is that support and resistance levels are horizontal areas while trendlines are sloping. Now let’s get to the topic.

Trading Breakouts Using Trendlines

Upward Trendline

An upward trend line connects a swing high to swing low from the lowest point to the highest point in an ongoing trend.

Buy Trade 1

The price chart below represents a trendline Breakout on the daily chart.

By looking at the market, it is clear that the sellers had a hard time going down as the buyers continue to give a strong fight. After a couple of months, sellers gave up, and buyers took the show to break above the trend line. The hold above the trendline confirms the buying entry in this pair. After riding the uptrend for a bit, we understood that the buyers got weak. Hence we decided to close our positions at the most recent higher high.

Buy Trade 2

The image below represents a trendline breakout in the CAD/JPY forex pair.

The pair was in a strong uptrend, and during the pullback phase, when the price action broke above the trend line, it indicates that the buyers are ready to lead the market again. The hold above the trendline confirms our buy entry. The original trend was quite strong, so the stop below the trend line was good enough to ride a new trend.

Downward Trendline

Downward trend line connects a swing low to swing high from the highest point in a trend to the lowest point in a trend.

Sell Trade 1

The chart below represents a trendline breakout in the GBP/USD Forex pair.

As we can see, the buying trend was quite strong, and the price action closely followed the trendline. A breakout below the trendline is a clear indication for us to go short in this pair.

Sell Trade 2

The price chart below represents the breakout of a trend line in the GBP/USD Forex pair.

We can see the pullback on a weekly chart, and during the pullback, the price broke below the trendline. This shows that the sellers are desperate to take the price down. After our entry, the price went down and turned sideways. After a few weeks, it again goes down, and we choose to close our trade at the most recent lower low.

This attempt is to give you an understanding of how to trade trendline breakouts in most of the scenarios. In our upcoming lessons, let’s delve deeper into this concept. Cheers!

[wp_quiz id=”83527″]

Tags Breakouts, Downward Trendline, Education, Forex, Forex Course, Forex Trading, Price Action, Technical Analysis, Technical Trading, trading, trendlines, Upward Trendline

Forex Basic Strategies

Trading The Most Simple Yet Profitable ‘MACD Combo Strategy’!

Post author By Reddy Shyam Shankar
Post date 4 August, 2020
No Comments on Trading The Most Simple Yet Profitable ‘MACD Combo Strategy’!

Introduction Theoretically, trend trading is easy. All we need to do is keep buying as long as we see the price rising and keep selling as long as we see the price breaking lower. In practice, it is far more difficult to do it. When looking for such opportunities, many questions arise in our minds, […]

Introduction

Theoretically, trend trading is easy. All we need to do is keep buying as long as we see the price rising and keep selling as long as we see the price breaking lower. In practice, it is far more difficult to do it. When looking for such opportunities, many questions arise in our minds, such as:

What is the direction of the market?
After spotting the trend, how long is the retracement going to last?
When is the trend going to end?

The greatest fear for traders is getting into a trend too late. That is, when the trend is coming to an end. Despite these difficulties yet, trend trading is considered to be the least risky and most popular styles of trading. When a trend develops, it can last for hours, days, and even months, depending on the time-frame.

Time Frame

The MACD Combo strategy works well on the 1-hour time frame. After gaining enough experience on the 1-hour time frame, we can also try the strategy on lower time frames.

Indicators

In this strategy, we will be using the following indicators

50 SMA
100 SMA
MACD with default settings

Currency Pairs

This strategy applies only to major currency pairs. Some of the preferred pairs are EUR/USD, USD.JPY, GBP/USD, GBP/JPY, and few others. We need to make sure that whichever currency pair we are selecting, it should be fairly liquid.

Strategy Concept

The strategy we have developed answers all of the above questions. It also gives us clear entry and exit signals. This strategy is called the MACD combo. We use two forms of moving averages for the strategy: the 50 simple moving average (SMA) and the 100 SMA. The 50 and 100 input of SMA is suitable for trading on the 1-hour time frame chart. The input will change depending on the time-frame we choose to trade.

The 50 SMA provides a signal for entering a trade, while 100 SMA ensures that we are working in a clear trending market. The main idea of the strategy is that we buy or sell only when the prices cross the moving average in the direction of the trend. The basic concept of the strategy may appear similar to the “momo” strategy but is far more patient and uses longer-term moving averages on hourly charts to capture larger profits.

When this strategy is used on the daily (D) time frame wit the same indicator settings, it gives a larger risk to reward. Hence, this strategy is appropriate for long-term investors and swing traders.

Trade Setup

In order to explain the strategy, we have considered the chart of GBP/USD, where we will be using the strategy on the 1-hour time frame. Here are the steps to execute the MACD combo strategy.

Step 1

The first step of the strategy is to determine the market direction. This means we need to establish the trend of the market. As this is a trend trading strategy, the market must trend in a single direction before we can apply it. In an uptrend, the price should adequately trade above the 50 SMA and 100 SMA for a long period of time. Similarly, for a downtrend, the price should trade below both the SMAs.

In the below image, we see that the market is in a strong uptrend. Hence, we will look for ‘buy’ opportunities.

Step 2

The next step is to wait for a price retracement or a ‘pullback’ to join the trend at this discounted price. We say that the pullback is valid if the price crosses the closest SMA and stays below that SMA at least for a period of4-5 candles. But we need to make sure that the price does not cross below the next SMA. If that happens, the trend gets invalidated, and it may signal a reversal of the trend.

The below image shows that the pullback has crossed the first SMA (50 Period) and has stayed there for more than 5 hours.

Step 3

In this step, we will use the MACD indicator to enter the market. In case of an uptrend, we enter the market for a ‘buy’ as soon as the MACD indicator turns positive. Similarly, in a downtrend, we enter the market for a ‘sell’ when the MACD indicator turns negative. A conservative trader may enter the market after it moves above the SMA.

We can see in the below image that we are going ‘long’ soon after the MACD shows up a green bar. This is an aggressive form of ‘entry’ which requires experience to be able to spot them.

Step 4

In this step, we determine the stop-loss and take-profit for the strategy. Stop-loss is placed below the swing ‘low’ in case of a ‘long’ trade and above the swing’ high’ in case of a ‘short’ trade. Since we are trading with the trend, we will take our profits at the new ‘higher high‘ or ‘lower low’ depending on the momentum of the market. This is the reason behind high risk to reward of trades done using this strategy.

In this case, the risk to reward of the trade is 1:2, which is above the normal range.

Strategy Roundup

Traders implementing the MACD combo strategy should make sure that they only apply the strategy on currency pairs that are typically trending. Also, it is smart to check the crossover’s strength below or above the first moving average. We can also make use of the ADX indicator to check the momentum of the pullback. It is important to check the momentum of the trend and the pullback when trend trading.

Tags Basic Strategies, convergence, divergence, Education, Forex, Forex Trading, Forex Trading Strategy, MACD, MACD Combo Strategy, Moving Average, Technical Analysis, trading

Forex Market Analysis

Gold Hits a New Record High

Post author By Eduardo Vargas
Post date 4 August, 2020
No Comments on Gold Hits a New Record High

The Gold price opened the current trading week to reach a new all-time high at $1,987.95 per ounce, approaching the psychological barrier of $2,000 per ounce.

Market Sentiment Overview

During this year, the precious metal reports an advance over 31% (YTD), boosted by global recession concerns. The safe-haven metal has increased its value at a similar pace of the descents on the worldwide growth rate. A fact that reduces the possibility of an economic recovery in the near term.

In its weekly chart, the yellow metal exposes the bullish momentum that sent the price over September’s 2011 high at $1,920.24 per ounce, climbing to $1,987.95 per ounce this week.

On the first chart, we distinguish the price moving in the strong bullish sentiment zone of the 52-week high and low range, where we observe the precious metal reaching fresh highs. Simultaneously, the price action continues moving above the 26-week moving average, showing that the bullish bias remains intact. The separation between the moving average and price leads us to conclude that Gold is in an overbought stage. This condition may carry the precious metal to begin a corrective movement.

On the other hand, the Institutional Net Positioning – green curve at the bottom of the previous image- shown by its latest CFTC report, reveals a decrease in the speculative positioning, decreasing by 11.12% (WoW) compared with the previous reading. This decrease exposed in the following figure illustrates the institutional net positioning moving bellow the 13-week moving average.

Summarizing, although the price action continues reaching fresh all-time highs, the big participants’ actions reveal a take-profit activity on their long-side positioning, which could be being helped by an extreme bullish sentiment on news media.

Elliott Wave Outlook

The short-term Elliott wave Gold’s perspective unveiled in its 2-hour chart reveals the price moving in a terminal structural series corresponding to an ending diagonal pattern. This technical formation comes after the price rallied, developing a third extended wave of Minuette degree identified in blue.

The bullish cycle that remains intact began on June 05th when the yellow metal found fresh buyers at $1,668.30 per ounce. The impulsive sequence observed in the previous chart, reveals its advance in a third extended wave, which topped at $1981.20 per ounce on July 28th, where the price retraced from, completing its wave (iv) of Minuette degree identified in blue.

Once the fourth wave in blue was completed, the price of Gold advanced in the current fifth wave of Minuette degree, showing an internal structure that looks like an ending diagonal pattern. This Elliott wave formation warns us about the potential reversion of the bullish trend. Although it will likely decline short-term, Gold’s bias remains on the bullish side as long as the price stays above $1,907.20. However, if the price breaks and closes below the base-line ii-iv of the ending diagonal, the yellow metal could visit the $1,907 level as its first relevant support.

Tags Elliott Wave, Forex, Gold, Market Sentiment, Technical Analysis, Technical Outlook, trading, XAUUSD

Crypto Market Analysis

Daily Crypto Review, August 4 – BTC Establishes Itself Above $11,000; Altcoins Taking Over The Market

Post author By Ilija Rankovic
Post date 4 August, 2020
No Comments on Daily Crypto Review, August 4 – BTC Establishes Itself Above $11,000; Altcoins Taking Over The Market

The cryptocurrency market ended up in the green today, with Bitcoin establishing its place above $11,000 and most altcoins gaining substantial value. Bitcoin is currently trading for $11,350, which represents an increase of 1.86% on the day. Meanwhile, Ethereum gained 4.8% on the day, while XRP gained 6.87%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, MCO gained 41.91% on the day, making it the most prominent daily gainer. Ocean Protocol (28.92%) and Energy Web Token (22.88%) also did great. On the other hand, Ampleforth has lost 12.73%, making it the most prominent daily loser. It is followed by Aave’s loss of 6.32% and Celsius’ loss of 3.80%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has decreased since we last reported, with its value currently at 60.80%. This value represents a 0.82% difference to the downside when compared to Friday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization has increased since we last reported. Its current value is $347.17 billion, which represents an increase of $9.74 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization confirmed its position above $11,000 in the past 24 hours (at least in the short term) Its price kept slowly going up until it hit a (possibly) new resistance level of $11,460. The price then took a small dive but returned to sideways movements. Bitcoin is in a good spot to create a move that will lead it towards (or above) $12,000 in the near future.

BTC traders should look for an opportunity to make a trade when BTC breaks $11,460 or falls below $11,090.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA, but below its 21-period EMA
Price is between its bottom B.B. and its middle B.B (20-period SMA)
RSI is neutral (51.35)
Volume increased

Key levels to the upside Key levels to the downside

1: $11,630 1: $11,090

2: $12,000 2: $10,855

3: $10,505

Ethereum

Ethereum continued pushing towards the upside, pretty much unaffected by the “flash crash” that brought its price down from $415 to $320. The second-largest cryptocurrency by market capitalization is moving upwards and having the 21-period and 50-period moving averages as support. The price is currently just below $400.

Ethereum traders should look for an opportunity in a pullback, which will most likely happen after the current move towards the upside.

ETH/USD 4-hour Chart

Technical Factors:

Price is above its 21-period EMA and its 50-period EMA
Price is currently between its top B.B. and its middle B.B. (20-period SMA)
RSI is elevated (63.95)
Above-average volume

Key levels to the upside Key levels to the downside

1: $340 1: $302

2: $362 2: $289

3: $278

Ripple

XRP was also one of the altcoins that made significant progress towards the upside in the past 24 hours. The third-largest cryptocurrency by market cap recovered from the “flash crash” quickly and hurled upwards, reaching past the $0.31 resistance level (now support) once again.

XRP traders can look for an opportunity in the range between $0.31 and $0.32.

XRP/USD 4-hour Chart

Technical factors:

Price above 21-period and the 50-period EMA
Price is between the top B.B. and the middle B.B. (20-period SMA)
RSI is elevated (66.85)
Elevated volume

Key levels to the upside Key levels to the downside

1: $0.32 1: $0.285

2: $0.3328 2: $0.266

3: $0.245

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Basic Strategies

Heard Of The CCI (Commodity Channel Index) Trading Strategy?

Post author By Reddy Shyam Shankar
Post date 3 August, 2020
No Comments on Heard Of The CCI (Commodity Channel Index) Trading Strategy?

Introduction

Often in life, taking the right action is the hardest decision to make. The same thing happens in trading as well. Most traders find it extremely difficult to buy at ‘bottom’ and sell at ‘top’ even though from a very early age, we are taught to look for value and buy “cheap.” That is why most traders who proclaim their love for trading with the trend fail to pick tops or bottoms.

While these types of ‘turn’ trades can be very profitable, they sometimes seem like tough tasks as the price can relentlessly trend in one direction, constantly stopping out the bottom and top pickers. Sometimes it is far easier and more comfortable to go with the flow. Yet, most traders are reluctant to buy breakouts for fear of being the last one to the party before prices reverse with a reprisal.

In today’s topic, we will solve the question of “how to trade breakouts confidently and successfully.” The Commodity Channel Index (CCI) Strategy is a setup designed to deal with just such a predicament.

Time Frame

One of the best parts of this strategy is that it works well on all time frames. That means we can use this strategy from very short time frames like 5-minutes to longer time frames such as the 4-hours or daily (D).

Indicators

In this strategy, we will use an indicator that is rarely used in forex. That is the Commodity Channel Index (CCI) indicator, devised by Donald Lambert in 1980 and originally designed to solve engineering problems. The primary focus of CCI is to measure the deviation of the currency pair’s price from its statistical average. As such, CCI is an extremely good measure of momentum that helps us to optimize only the highest probability entries for our setup.

Currency Pairs

This strategy applies to most of the currency pairs listed on the broker’s platform. We need to make that the pair we are choosing is fairly liquid.

Strategy Concept

The CCI is an unbounded oscillator with a reading of 100+ is typically considered to be overbought, and any reading of 100- indicates oversold. For this strategy, we will use these levels as our trigger points and change the CCI interpretation. We will look to buy the currency pair if it makes a new high above 100 and sell if it makes a new low below 100.

In this strategy, we are looking for new peaks or spikes that are likely to take the currency pair higher or lower due to its momentum. The thesis behind this setup is much like a body that will continue to remain in motion until it is hurtled by an external force or slowed down by counter forces. Similarly, new highs and lows in CCI will propel the currency in the further direction of the move until new prices halt the ongoing move.

Trade Setup

In order to illustrate the strategy, we have considered the EUR/JPY currency pair, where we will be applying the strategy on the 1-hour time frame chart.

Step 1

Firstly, open the chart of the desired currency pair and plot the Commodity Channel Index (CCI). Keep the input of the CCI index as 20. Then, mark key technical levels of support and resistance on the chart. For a ‘long’ trade, look for the last ‘high’ made by the CCI indicator and mark it out. That means its value should have crossed +100 during an upward price movement. Similarly, for a ‘short’ trade, look for the last ‘low’ made by the CCI indicator during the downward price movement.

In the below example, we have identified a ‘resistance’ and a ‘high’ that was made by the CCI indicator. Since the ‘high’ is more prominent on the chart, we will look for ‘long’ trades in the currency pair.

Step 2

This step is the most important part of the strategy. Here, we need to wait for the CCI indicator to market a new ‘high’ or new ‘low,’ which is higher than the previously identified ‘high’ or ‘low.’ This indicates a build-up of momentum in the market with the high chance that the market will continue moving strongly in the same direction. In the next step, we will see how to take an ‘entry’ after carrying the previous steps.

In the below image, we can see that the CCI index makes a new ‘high’ at the appearance of a bullish candle. At this moment, the price is exactly at resistance, which means we need to ‘sell’ from here. This is where the strategy comes into the picture.

Step 3

Once the market starts moving in our favor by about five pips, we enter with the appropriate position size. This is an aggressive form of ‘entry’ where we take advantage of the existing momentum. A conservative ‘entry’ would be to wait for a price retracement and enter after receiving a confirmation from the market.

In our example, we are taking an aggressive entry, i.e., at the breakout of the resistance. All traders who will be selling here thinking it as resistance would get trapped. This is the application of the CCI indicator.

Step 4

In this step, we determine the stop-loss and take-profit for the strategy. Stop-loss is placed below the previous ‘low’ in case of a ‘buy’ and above the previous ‘high’ for a ‘sell’ trade. If the ‘high’ or ‘low’ is too far away, it could reduce the risk to reward ratio. In such cases, the stop-loss can be placed 20-25 pips from the entry point. The ‘take-profit’ is set at 1:1 risk to reward.

Strategy Roundup

If the rules are strictly followed, we may not experience any serious drawdown as we are trading based on market momentum. The key is a high probability, and this is exactly what the ‘CCI strategy’ provides. This strategy exploits the application of the CCI indicator, which is highly underrated in the forex market.

Tags Basic Trading Strategies, CCI, Commodity Channel Index, Commodity Forex pair, Forex Technical Trading, Forex Trading, Technical Analysis

Forex Market Analysis

Daily F.X. Analysis, August 03 – Top Trade Setups In Forex – Manufacturing PMI In Highlights

Post author By Ali B.
Post date 3 August, 2020
No Comments on Daily F.X. Analysis, August 03 – Top Trade Setups In Forex – Manufacturing PMI In Highlights

On the news front, the eyes will be on the series of low impact economic events from Europe and the U.S., but they are hardly likely to drive any major price action today. We should be focusing on the technical side of the market.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.17756 after placing a high of 1.19085 and a low of 1.17613. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair rose above 1.1900 level on Friday, highest since September 2018, after progress in a new European stimulus package. However, the upward rally was reversed after the oversold condition, and profit-taking helped the U.S. dollar recover some ground.

The Euro has enjoyed 11% jump against the U.S. dollar since ay benefiting from the U.S. currency’s weakness and Europe’s decisive joint stimulus package to combat the coronavirus. EUR/USD pair ended July with its best monthly performance in a decade.

Euro hit 1.1900 level on Friday, and on May 18, the day just before the game-changing E.U. Stimulus plan was proposed, it was traded at 1.0800 level. The gains were also because of the more successful pandemic response by the European Union than the United States.

However, on Friday’s data front, the French Consumer Spending for June increased to 9.0% from the expected 6.9% and supported the Euro. At 11:45 GMT, the French Prelim CPI for July raised to 0.4% from the projected -0.1% and supported Euro. At 12:00 GMT, the Spanish Flash GDP for the quarter came in as -18.5% against the expected -16.0%. At 13:00 GMT, The Italian Prelim GDP for the quarter came in as -12.4% against the expected -15.0%.

The CPI Flash Estimate for the year was raised to 0.4% from the expected 0.3% and supported Euro. For July, the Italian Prelim CPI dropped to -0.1% from the expected 0.1% and weighed on Euro. The Prelim Flash GDP for the whole bloc in the second quarter was dropped to -12.1%from the expected -12.0%. The Italian Retail Sales for the whole bloc rose to 12.1% against the expected 0.8% in June. Most data from the European side favored local currency, which is why the EUR/USD pair crossed the 1.1900 level. However, the pair could not remain there for long as investors started to take profits off their positions, and the pair began to decline.

On the other hand, the U.S. dollar was a little strong because its oversold condition was priced at the month-end, and traders took profits out of it. On the data front, the U.S.’s economic docket remained depressive and mixed that made traders confused.

The Personal Spending for June raised to 5.6% from the expected 5.3%, and the Chicago PMI in July also raised to 51.9 from the expected 44.0 and gave a boost to the U.S. dollar. However, the Personal Income in July dropped to -1.1% against the expected -0.8%and weighed on the U.S. dollar.

The improved confidence in the bloc’s prospects due to its handling of pandemic and issuance of the massive E.U. stimulus package has limited the negative effects of euro strength. Some analysts believe that the Euro will attract “significant” safe-haven flows in the coming months. The Euro has become a stronger currency recently due to fundamental improvement in the structure of Europe. Politically and financially. However, the fall in EUR/USD pair on Friday was all because of profit-taking and correction.

Daily Technical Levels

Support	Pivot	Resistance
1.1768	1.1782	1.1795
1.1755		1.1809
1.1740		1.1822

EUR/USD– Trading Tip

The EUR/USD fell sharply from 1.1908 level to test the double bottom support level of 1.1745 level. On the hourly timeframe, the EUR/USD extends to form neutral candles, which suggests indecision among investors despite a strong support level of 1.1745. On the higher side, the EUR.USD may find support at 1.1796 level.

GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.30847 after placing a high of 1.31701 and a low of 1.30702. The movement of the GBP/USD pair remained flat but slightly bearish throughout the day.

After posting gains for ten consecutive days, the GBP/USD pair declined for the first time in 10 days on Friday. The pair rose above 1.31700 level, the highest since March 2020, at the ending day of the month. However, the pair GBP/USD did not stay there for long and dropped to post losses on the day after technical buying in the U.S. dollar started.

The surge in GBP/USD in the earlier session was due to the worries that the ever-increasing number of coronavirus cases could undermine the U.S. economic recovery. The concerns were escalated after the advanced US GDP report on Thursday that showed that the U.S. economy was collapsed by 32.9% during the second quarter.

This made greenback weak, and the more dovish statement further pressurized it on Wednesday from FOMC. Besides, the difference of opinion of Republicans & Democrats to reach a deal ahead of the expiry of some earlier provision on Friday weighed on the U.S. dollar.

In an earlier trading session on Friday, the U.S. dollar’s weakness gave a push to the GBP/USD pair above 1.31700 level; however, the oversold condition of the U.S. dollar and the profit taking by investors in late session dragged down the pair and turned gains into losses.

On the data front, the Nationwide House Price Index from Great Britain for July rose to1.7% from the expected -0.2% and supported the GBP/USD pair. On the U.S. front, the Core PCE Price Index for June came in line with the expectations of 0.2%. Personal Spending in June rose by 5.6% from 5.3% of expectations and supported the U.S. dollar. The Chicago PMI also rose to 51.9 from the expected 44.0 and supported the U.S. dollar. The better than expected PMI and Personal Spending data from the U.S. gave strength to the U.S. dollar that dragged the GBP/USD pair on the lower side.

On coronavirus front, the COVID-19 situation in the U.K. remained under control as the increasing number of cases made the government impose restrictions on around 4.3M people in northern England. On Brexit front, On Friday, Britain and E.U. have planned more trade negotiations until October 02, less than a fortnight before a summit where the E.U. hopes to approve Britain’s agreement.

It’s been more than four years since Britain voted to leave E.U., and after torturous divorce talks, both sides are negotiating all aspects of their future relations, from trade to security to transport from 2021 onwards.

On the Sino-UK front, both countries’ relation has not improved after the U.K. canceled the extradition treaty with Hong Kong.

Next week’s main event will be the Super Thursday as the Bank of England is set to release its monetary policy statement and leave the interest rates on hold at 0.1% and the quantitative easing program at 745 billion pounds. The focus will be on the statement released by the bank and any unexpected announcement that will make it “Super.”

The Governor of Bank of England, Andrew Bailey, will give a press conference speech ad provide details on the current economic situation and growth prospects. Any BOE help to the government in lowering the borrowing cost and support the recovery will be beneficial for GBP/USD pair. Furthermore, the views about the concept of negative interest rates by Bank of England will also hold importance in investors on the coming Thursday.

Daily Technical Levels

Support	Pivot	Resistance
1.3078	1.3092	1.3114
1.3056		1.3128
1.3042		1.3149

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3088 level, having completed the 50% Fibonacci retracement at 1.3060 level. On the higher side, the Sterling can find resistance at 1.3105. In the daily timeframe, the Cable has formed a Doji pattern, which is followed by a solid bullish trend at 1.3100 level, and it has the potential to drive bearish bias in the pair. Let’s keep an eye on 1.3125 to extract a bearish bias in the GBP/USD pair today. A bearish breakout of 1.3050 can drive more selling until 1.3005.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.876 after placing a high of 106.053 and a low of 104.184. Overall the movement of the USD/JPY pair remained bullish throughout the day. After falling for six consecutive days, the USD/JPY pair dropped on Friday and broke its 6-days bearish streak amid mixed U.S. data.

In an earlier trading session on Friday, the USD/JPY pair dropped to its lowest since March 2020 near 104.00 level amid the better than expected Japanese macroeconomic data.

At 4:30 GMT, the Unemployment Rate from Japan for June dropped to 2.8%from the expected 3.0% and supported the Japanese Yen. At 4:50 GMT, the Prelim Industrial Production for June increased to 2.7% from the anticipated 0.9% and gave strength to Japanese Yen.

At 10:00 GMT, the Consumer Confidence from Japan came in line with the expectations of 29.5 for the month of July. The Housing Starts for the year in June dropped as expected to -12.8%. The strong Japanese Yen weighed on the USD/JPY pair and dragged the pair near the 104.00 level. However, the USD/JPY pair’s losses faded away after the release of U.S. economic data.

The macroeconomic data released by the U.S. on Friday was although mixed, but traders cheered the positive data and gave strength to the U.S. dollar. Another reason behind the U.S. dollar surge was profit-taking and correctness as the U.S. dollar was oversold in the market from the previous ten days.

At 17:30 GMT, the Core PCE Price Index for June from the U.S. came as projected by 0.2%. In June, personal spending exceeded the expectations of 5.3% and came in as 5.6% and supported the U.S. dollar. The Employment Cost Index for the quarter dropped to 0.5% from the forecasted 0.6%. The Personal Income for June also dropped to -1.1% from the forecasted -0.8%.

At 18:45 GMT, the Chicago PMI rose to 51.9from the anticipated 44.0 and gave strength to the U.S. dollar. However, at 19:00 GMT, the Revised UoM Consumer Sentiment remained flat with expectations of 72.5, and the UoM Revised Inflation Expectations dropped in July to 3.0% from May’s 3.1%.

Investors followed the U.S.’s positive data and gave a push to the U.S. dollar on Friday that leads to the upward trend of the USD/JPY pair.

The U.S. Dollar Index stretched higher with the initial reaction to the mixed U.S. data and helped the pair to move further on the upside. The DXY posted small gains near 92.97 levels on Friday. The U.S. Treasury bond yield for ten years was down by 1% on the day.

On the US-China front, the United States strengthened its economic pressure on China’s Xinjiang province on Friday, after imposing sanctions on a powerful Chinese company, and two officials for human rights abuses against Uighurs/ Muslims and other ethnic minorities.

U.S. Secretary of State Mike Pompeo called the said human rights abuses by the Chinese Communist Party in Xinjiang province, China, against Muslim minorities as the stain of the century.

This move came in a week after U.S. President Donald Trump shut the Chinese consulate in Houston on the back of allegations that it was a spy hub. In response, the U.S. consulate in the south-western city of Chengdu in China was also closed in revenge on similar grounds of the fast spread of the virus in the U.S. Early on Thursday, Japan will publish Retail Trade data that is expected to fell by 6.5% compared to the earlier year. The U.S. investors will look forward to GDP data for the second quarter.

Daily Technical Levels

Support	Pivot	Resistance
104.80	105.85	105.55
104.50		106.00
104.05		106.00

USD/JPY – Trading Tips

Tags Daily Brief, EURUSD, Forex, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, August 3 – More than $1 Billion Positions Liquidated; Crypto Market Booming Despite the “Flash-Crash”

The cryptocurrency market had quite a weird weekend in terms of price performance. The market and most of its cryptocurrencies had a “flash crash,” but quickly recovered to a price slightly below the previous highs. Bitcoin is currently trading for $11,160, which represents a decrease of 6.59% on the day. Meanwhile, Ethereum lost 4.04% on the day, while XRP gained 1.03%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Loopring gained 17.24% on the day, making it the most prominent daily gainer. Terra (14.69%) and Synthetix Network (13.73%) also did great. On the other hand, Ampleforth has lost 20.21%, making it the most prominent daily loser. It is followed by The Midas Touch’s loss of 18.78% and Quant’s loss of 15.89%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level decreased since we last reported, with its value currently at 61.62%. This value represents a 1.29% difference to the downside when compared to Friday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization increased since we last reported. Its current value is $337.43 billion, which represents an increase of $9.65 billion when compared to the value it had on Friday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization spent the weekend crashing down to $10,555 and then recovering from the drop. After the price going up all the way up to $12,000, Bitcoin suddenly dropped to $10,555, which liquidated $1 billion of positions. However, the price quickly recovered and went over $11,000. It is still unsure if the price will end up being above this support level, but it is more likely that BTC will remain above, rather than fall below it.

BTC traders should look for a trade opportunity when BTC bounces from $11,000 or falls below it.

BTC/USD 4-hour Chart

Technical factors:

Price is currently below its 50-period EMA and its 21-period EMA
Price is between its bottom B.B. and its middle B.B (20-period SMA)
RSI is neutral (47.02)
Volume increased (descending)

Key levels to the upside Key levels to the downside

1: $11,630 1: $11,090

2: $12,000 2: $10,855

3: $10,505

Ethereum

Ethereum acted pretty much the same as Bitcoin over the weekend, with its price reaching a major high of $415, and then plummeting down to $320 before recovering to $380 levels. While the current price is considerably lower than the $415 high, but Ethereum made insane gains over the course of the week and month.

Ethereum traders should look for a trade opportunity after the cryptocurrency decides its price direction.

ETH/USD 4-hour Chart

Technical Factors:

Price is above the 50-period EMA and the 21-period EMA
Price is between its top B.B. and its middle B.B (20-period SMA)
RSI is elevated (61.44)
Above-average volume (descending)

Key levels to the upside Key levels to the downside

1: $340 1: $302

2: $362 2: $289

3: $278

Ripple

XRP spent the weekend reaching the resistance level of $0.32, which it could not pass over, and then dropping towards the downside. The third-largest cryptocurrency reached a low of $0.241 before bouncing back to above $0.285 level, where it currently is consolidating (and rising slowly).

XRP traders can look for an opportunity in the range between $0.285 and $0.31.

XRP/USD 4-hour Chart

Technical factors:

Price above 21-period and the 50-period EMA
Price is between the top B.B. and the middle B.B. (20-period SMA)
RSI is elevated (63.79)
Elevated volume (descending)

Key levels to the upside Key levels to the downside

1: $0.32 1: $0.285

2: $0.3328 2: $0.266

3: $0.245

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Basic Strategies

Learning To Trade The Forex Market Using ‘Pure Die-Out’ Strategy

Post author By Reddy Shyam Shankar
Post date 2 August, 2020
No Comments on Learning To Trade The Forex Market Using ‘Pure Die-Out’ Strategy

Introduction

Everyone wants to be the hero in the market and claim that they have picked the top or bottom of a currency pair. However, apart from boasting, there is no gain from repetitive selling at every new ‘high’ in hopes that this one would be the final ‘high.’ One of the biggest dangers encountered by novice traders is picking a top or bottom with no logic. The pure die-out is an intraday strategy that picks a top or bottom based upon a strong recovery after an extended move.

Time Frame

As it is an intraday strategy, the highly suitable time frames are 1 hour and 15 minutes.

Indicators

In this strategy, we will be using two indicators. The two indicators are RSI and Bollinger Bands.

Currency Pairs

This strategy works best on major currency pairs only. Among these, the preferred ones are EUR/USD, USD/JPY, GBP/USD, GBP/JPY, and USD/CAD.

Strategy Concept

The strategy looks for intraday fake-outs using three sets of Bollinger bands and the relative strength index (RSI) on the hourly and 15-minute charts. The trade setup is formed when RSI hits either an overbought or oversold level. The market is considered to be overbought when RSI moves above 70, while the market is considered oversold when RSI goes below 30.

This signals a possible reversal in the market and that we can start looking for a trade in the opposite direction. However, rather than just immediately buying or selling in hopes for a trend reversal based solely upon RSI, we add in three sets of Bollinger Bands, to help us identify the point of over-extension. We use three sets of Bollinger Bands because it helps us assess the extremity of the move along with the extent of possible U-turn.

The conventional theory of Bollinger bands suggests buying or selling when prices hit the two bands. In our strategy, we will totally be using three Bollinger bands, and when prices hit the third band on any side, we say that the move is within the 5% small group, which characterizes the move as extreme.

When prices move away from the third standard deviation Bollinger band and move into the zone of first and second Bollinger band, we are confident that the currency pair has hit its extreme point and is moving into a reversal phase.

Finally, we look for one last thing before making an entry: a candle to close fully between the second and first Bollinger Bands. This last step helps us screen out false moves and assures that the previous move was really exhaustion. This is a low-risk and low-return strategy that is suitable for traders who like to scalp the market.

Trade Setup

To illustrate the strategy, we have considered the USD/JPY currency pair, where we will be applying the 1-hour chart strategy. Here are the steps to execute the strategy.

Step 1

Firstly, open the 1 hour or 15 minutes chart of the desired currency pair. Then plot the Bollinger band and RSI indicator on the chart. We need to plot 3 Bollinger bands with the same ‘period’ but different standard deviations. The first Bollinger band (BB) should have a standard deviation (SD) of 1, the second BB will have SD of 2, and finally, the third BB will have SD of 3. RSI will carry the default settings.

The below image shows the Bollinger band indicator plotted on the USD/JPY currency pair and the RSI on it.

Step 2

If we are looking for an overextended move on the downside, wait for the price to cross below the lower band of the 3SD BB or if we are looking for an overextended move on the upside, wait for the price cross above the upper band of the 3SD BB. Along with this, we need to see that the RSI goes below the 30 ‘mark’ in a down move and moves above the 70 mark in an up move. Both conditions need to be satisfied simultaneously.

In the example since we are looking for a ‘buy’ trade, we have to wait for the price to cross below the lower band of the 3SD BB along with the RSI reading of below 30. The below image shows that the conditions mentioned above are fulfilled.

Step 3

In this step, we wait for a candle to open and close between the 2SD BB and 1SD BB zone. It is important to check that the entire body of the candle is within this zone, and it closes near the lower band of the 1SD BB. This was for a ‘long’ setup. In the case of a ‘short’ trade, the only difference is that the candle should close between the upper band of the 2SD BB and 1SD BB.

In the below image, we can notice a bullish candle that closes well within the required zone, which is a sign of reversal.

Step 4

In this step, we determine the ‘stop-loss’ and ‘take-profit‘ for the strategy. Stop-loss is placed below or above the ‘low’ or ‘high,’ respectively, from where the reversal began. As we are trading against the trend, the ‘take-profit’ is set at 1:1 risk to reward. We will also lock-in some profits when the market starts moving in our favour, to ensure that we don’t lose money if it turns midway.

Strategy Roundup

In this strategy, we combine two technical indicators to identify the market’s top and bottom, without making wild guesses. This means we are determining overextended moves logically and technically. After practising well on the 1-hour chart, we can spot trade setups on the 15 minutes time frame. Since these are counter-trend trades, the probability of success will be less. This strategy is very simple to understand if we have basic knowledge of indicators.

Tags Basic Strategies, Bollinger Band, Forex Strategies, Forex Strategy, Pure Die-Out, Technical Analysis, Technical Trading, timeframes

Forex Basic Strategies

Learning To Trade The ‘Order Block’ Forex Strategy

Post author By Reddy Shyam Shankar
Post date 31 July, 2020
6 Comments on Learning To Trade The ‘Order Block’ Forex Strategy

Introduction Order block is a market behavior that indicates order collection from financial institutions and banks. Prominent financial institutes and central banks drive the forex market. Therefore, traders must know what they are doing in the market. When the market builds the order block, it moves like a range where most of the investing decisions happen. […]

Introduction

Order block is a market behavior that indicates order collection from financial institutions and banks. Prominent financial institutes and central banks drive the forex market. Therefore, traders must know what they are doing in the market. When the market builds the order block, it moves like a range where most of the investing decisions happen.

The market makes a sharp move towards both upside and downsize once the order building is completed. The key term of the order block trading strategy is that it includes what the institutional traders are doing. As they are the key price driver, any strategy that includes institutional trading might

What is the Order Block?

Financial institutes do not make a sudden investment in any trading instrument. They spend a lot of money on analysis to get the best trading result. Furthermore, they play with the money that is often impossible to arrange by retail traders.

Smart money makes several steps in their trading based on the availability of the price. For example, if a bank wants to buy $100M EURUSD, it will take trade-in three or four steps. In the first step, they will take $20M, in the second step, $50M, and in the third step $30M. The price usually makes a movement when the full quota of $100M completes.

Order block seems like a range, but every range is not an order block. Moreover, we don’t know when and where the smart money moves. Therefore, we will rely on the best location and price action to identify a suitable order block.

Besides the order block, we have to know what the order flow is. Once the price starts a movement from an order block, it provides an order flow towards any direction. Order flow from a higher timeframe indicates a market direction, and we have to find the order block towards the direction of it.

Order Block Trading Strategy

From the above section, we have seen what the institutional order block and order flow is. In this trading strategy, we will use 1 hour- 4 hours or the daily timeframe to enter the trade and weekly timeframe to identify the order flow. Furthermore, we will use the Fibonacci to identify the potential location from where the market is expected to move.

Timeframe

One hour to 4 hours to identify the entry-level.
Weekly timeframe to measure the order flow.

Currency Pair

The best part of this trading strategy is that it can provide profitable trades in all currency pairs. However, we have done extensive research and found that it works well in all major currency pairs, including EURUSD, GBPUSD, and USDJPY.

Identify the Order Flow

In the weekly timeframe, we will look for the price that tested an order block and moving higher or lower. Once it completes the test and starts the movement will find the direction.

In the image above, we can see that the price moved higher and came back sharply towards the order block with an impulsive bearish pressure but did not break the lowest. After the rejection candle, we will wait for the price to move higher with a candle close. Once the candle closes, we found our weekly order flow.

Later on, we will move to the H4 or daily timeframe and identify the order block to trade towards the direction of the order flow.

Location of the Order Block

Move to the H4 timeframe and draw the Fibonacci retracement from upside to downside. While you draw the Fibonacci level, make sure to draw from the last available price, not more than 200 candles. Furthermore, for a buy trade, draw the Fibonacci from the highest price to the lowest price.

After drawing the Fibonacci level, you should consider order blocks residing below the 50% Fibonacci retracement levels. Any price below the 50% Fibonacci retracement level is the discount price and any price above the 50% retracement level is the premium price.

In the bullish order block trading strategy, you should consider the discount price and, in a bearish order block trading strategy, consider the premium price only.

Entry

Wait for the price to break above or below the order block, win an impulsive bullish or bearish pressure. Later on, the price will make new highs or lows, but you should wait when it comes back to the order block. In most cases, the price will come back to the order block and test the 50% level before making the final movement.

Therefore, if you don’t want to monitor the price, you can take a pending order at a 50% level of the order block. However, the best practice is to enter the trade once it starts moving from the order block with a candle close above or below it.

Stop Loss and Take Profit Level

The stop loss level should be below or above the order block with some buffer. In most of the cases, use 10 or 15 pips buffer to avoid unexpected market behavior.

On the other hand, the ordinary take profit level would be towards the order flow with 1:1 risk: reward ratio. However, the final take profit level is Fibonacci 0%, which is usually the top of the available price in a bullish condition and the bottom of the price in a bearish condition.

Summary

Let’s summaries the order block trading strategy:

Identify the weekly order flow and consider the direction.
Identify the premium and discount zone level with the Fibonacci retracement levels.
Move to H1 to H4 timeframe and find the order block within Fibonacci 50% to 100% levels.
The price should move towards the order flow directly from the order block, but it should come down to test the order block again.
Enter the trade as soon as the price rejects the order block with a reversal candlestick.

The order block trading strategy is profitable in most of the currency pairs. However, it is essential to keep in mind that the forex market is very uncertain. We, as a trader, anticipate the price, and that’s why we use stop loss. No trading strategy can assure a 100% profit. Although the Order block is a very profitable trading strategy, you should use appropriate trade management and money management rules to avoid unexpected market conditions.

Tags Basic Strategy, Education, Forex, Forex Trading Strategy, Order Block, Price Action, Range Trading, Rejection, Technical Analysis, trading strategy

Forex Market Analysis

US Dollar Index – Technical Overview

Post author By Eduardo Vargas
Post date 31 July, 2020
No Comments on US Dollar Index – Technical Overview

The US Dollar Index (DXY) jumps on Thursday trading session after the FED’s policymakers decided to keep unchanged the rate at 0.25%

Market Sentiment Overview

In its weekly chart, the US Dollar Index exposes a downward movement with an accelerated bearish momentum that brought it to decline for the sixth week in a row, falling to its lowest level since mid-June 2018 when the DXY found support at 93.19.

The price action observed in the 52-week high and low range places DXY in the strong bearish zone. This market context leads us to expect more declines in the long-term. Simultaneously, in the short-term, we could see a limited recovery, which could find resistance at the 95.67 zone.

From an institutional activity perspective, the net positioning informed by the COT report released by the CFTC last Friday, reveals that speculative traders (green line) continue favoring a bearish-side positioning.

In consequence, the long-term market sentiment for the US Dollar index remains bearish. At the same time, a short-term recovery could signify only a retracement of the primary bearish trend.

Elliott Wave Outlook

The short-term Elliott wave perspective for DXY illustrated in its 4-hour chart reveals the advance in a bearish trend that began on the last March 19th high at 102.99. Once the Greenback found fresh sellers, the bearish market participants took the price down in an incomplete descending sequence.

In the figure, we observe the US Dollar index moving in an incomplete wave ((c)) or ((iii)) of Minute degree labeled in black. At the same time, the price advances in its wave iii of Subminuette degree identified in green, this move belongs to the fifth wave of Minuette degree labeled in blue, which began on June 30th when the price made a lower high at 97.80.

Although the third wave in green touched the bearish target area located in the blue box and started to bounce, there is no evidence to support the end of the bearish cycle. Neither does the bullish divergence observed on the RSI oscillator bring us a signal of exhaustion or reversal trend. On the other hand, considering the alternation principle and that the current bearish movement has strong downward momentum, the fourth wave in green should likely evolve as a sideways sequence, possibly as a triangle pattern. This technical formation could find resistance at 94.65, corresponding to the last March 09th low. Even, the move could extend until the 95.72 level, where the price might reverse towards the primary bearish trend.

In summary, the US Dollar index currently runs in a bearish five-wave sequence, which seems incomplete. There exist a possibility that the Greenback starts to develop its fourth wave of Subminuette degree identified in green, which could find resistance in the area between 94.65 and 95.72. The current bearish scenario will be valid as long as the price stays moving below 96.37.

Tags DXY, Elliott Wave, Forex, forex review, Forex Trading, Market Sentiment, Price Action, Technical Analysis, trading

Crypto Market Analysis

Daily Crypto Review, July 31 – Binance Debit Cards Now in Europe; XRP Whales Started Buying?

Post author By Ilija Rankovic
Post date 31 July, 2020
1 Comment on Daily Crypto Review, July 31 – Binance Debit Cards Now in Europe; XRP Whales Started Buying?

The cryptocurrency market mostly traded sideways as Bitcoin still continues its fight for $11,000. Bitcoin is currently trading for $11,065, which represents a decrease of 0.43% on the day. Meanwhile, Ethereum gained 4.76% on the day, while XRP gained 2.04%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Chilliz gained 29.75% on the day, making it the most prominent daily gainer. Bancor (14%) and VeChain (12.22%) also did great. On the other hand, Ampleforth has lost 45.57%, making it the most prominent daily loser. It is followed by Flexacoin’s loss of 8.58% and Quant’s loss of 8.06%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level decreased slightly since we last reported, with its value currently at 62.91%. This value represents a 0.75% difference to the downside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization increased slightly since we last reported. Its current value is $328.13 billion, which represents an increase of $3.04 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization spent the day fighting for $11,000 yet again. The sideways movement ranged from the support of $10,855 to a little above $11,090 resistance level. While it is still unsure of whether Bitcoin will end up above or below $11,000, the rally from the $9,000 levels has been extremely successful. As for the short-term future of Bitcoin, it is still unsure, as some analysts call for an immediate correction while others predict a price increase to $11,500 levels.

BTC traders should look for a trade opportunity when BTC bounces off of $10,855 or falls below it.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA and its 21-period EMA
Price is between its top B.B. and its middle B.B (20-period SMA)
RSI is elevated (60.82)
Volume increased (descending)

Key levels to the upside Key levels to the downside

1: $11,090 1: $10,855

2: $11,630 2: $10,505

3: $10,015

Ethereum

Ethereum broke off from its period of stagnation and moved towards the upside. The second-largest cryptocurrency by market cap moved to $340 before being stopped. ETH is now consolidating just above the previous consolidation phase.

Ethereum traders should look for a trade opportunity after the cryptocurrency moves back below $324 or if it makes another move towards the upside.

ETH/USD 4-hour Chart

Technical Factors:

Price is above the 50-period EMA and the 21-period EMA
Price is at the top B.B.
RSI is elevated (66.5)
Above-average volume (descending)

Key levels to the upside Key levels to the downside

1: $340 1: $302

2: $362 2: $289

3: $278

Ripple

XRP spent its day mostly trading sideways, but also gaining in value slightly. The third-largest cryptocurrency by market cap failed (so far) to break the $0.2454 level completely, but it has approached that event considerably. If, however, XRP doesn’t break the resistance level soon, it might fall back and retest the support level of $0.235.

XRP traders can look for an opportunity when the cryptocurrency breaks its ranging moves to either side.

XRP/USD 4-hour Chart

Technical factors:

XRP in a mid-term descending trend (though it broke the trend in the short-term)
Price above 21-period and the 50-period EMA
Price is between the top B.B. and the middle B.B. (20-period SMA)
RSI is elevated (61.84)
Elevated volume (descending)

Key levels to the upside Key levels to the downside

1: $0.245 1: $0.235

2: $0.227

3: $0.214

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, July 30 – Top Trade Setups In Forex – GDP Figures In Focus

Post author By Ali B.
Post date 30 July, 2020
1 Comment on Daily F.X. Analysis, July 30 – Top Trade Setups In Forex – GDP Figures In Focus

Later today, the focus will remain on the German Prelim GDP and Advance GDP figures from the U.S. both of the events are expected to perform worse than before as the data represents the lock-down period’s economic activity. So most of it is already priced in. However, the U.S. Jobless claims will remain in the highlights. Jobless Claims figures are expected to rise again, perhaps due to the second wave of COVID19 in the U.S.

Economic Events to Watch Today

EUR/USD – Daily Analysis

TheEUR/USD pair was closed at 1.17897 after placing a high of 1.18061 and a low of 1.17124. Overall the movement of the EUR/USD pair remained bullish throughout the day. EUR/USD pair rose above the 1.180 level on Wednesday amid the Federal Reserve’s decision to keep the rates unchanged at 0.0%-0.25%.

The concerning picture painted by the Federal Reserve about the resurgence of COVID-19 that was already hurting consumption and jobs weighed more on the U.S. dollar. According to Fed Chair Jerome Powell, Fed showed full commitment to use all of its powers and tools to support the economy. He also said that economic development was highly dependent on the coronavirus, and the rates will remain near zero until the economy improves towards recovery.

The Fed’s decision and a statement from Fed’s Chair Powell further weighed on the U.S. dollar that was already under pressure from the past few days. The U.S. Dollar Index fell 0.44% to 93.17, the lowest level since June 2018. The fall of the U.S. dollar below two years lowest level helped the EUR/USD pair to post gains.

The greenback has suffered on expectations that the Fed will continue its ultra-loose monetary policy for years to come and speculate that it will allow inflation to run higher than it has previously indicated before raising interest rates. This all came as the U.S. was facing a continuous rise in coronavirus cases as U.S. deaths from virus surpassed 150,000 on Wednesday, a number higher than all countries and nearly a quarter of the world’s total numbers.

The pair EUR/USD rose above 1.180 level amid the fresh weakness of the U.S. dollar. However, the European side’s macroeconomic data also helped the EUR/USD pair in sustaining its gains.

At 11:00 GMT, the German Import Prices for June rose to 0.6% against the expected 0.5% and supported Euro that added in the upward trend of currency pair.

Furthermore, the Executive of the European Union said on Wednesday that it had agreed to buy a limited supply of the COVID-19 medicine redeliver from the U.S. drugmaker Gilead to address Europe’s short-term needs patients. They also hoped to be able to order more later.

The E.U. Commission agreed to pay about 63 million euros to buy enough doses to treat about 30,000 patients. The anti-viral is the only drug so far authorized in the E.U. to treat patients with the virus’s severe symptoms. However, nearly all available supplies have already been bought by the U.S.

Daily Technical Levels

Support	Pivot	Resistance
1.17	1.18	1.18
1.17		1.19
1.16		1.19

EUR/USD– Trading Tip

The technical side of the EUR/USD remains mostly the same as it’s trading at 1.1770 level, holding above resistance become support level of 1.1755. On the hourly timeframe, the EUR/USD continues to form higher high and higher low pattern suggestings odds of bullish trend continuation. A bearish breakout of 1.1755 can drive more selling until 1.1702 level. On the higher side, the resistance can stay at 1.1788 and 1.1880.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29953 after placing a high of 1.30132 and a low of 1.29118. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair rose for the 9th consecutive day and maintained its bullish streak and crossed the 1.30 level. The currency pair rose to its multi-months’ highest level since the first week of March amid the broad-based U.S. dollar weakness.

The U.S. dollar struggled against the six major currencies and dropped to 2 year’s lowest level at 93.17 on Wednesday after the announcement of an interest rate decision by Federal Reserve. Fed kept its rates unchanged near zero and vowed to keep them at the same level until the economy shows improvement.

Furthermore, the Fed Chair Jerome Powell said that the current economic downturn was severe, and continued fiscal and monetary support will be necessary for recovery. He added that the Fed would remain committed to using its full range of tools to support the economy.

The rising number of coronavirus cases in the U.S. has weighed on America’s economy and the U.S. dollar. Traders have become more concerned that the world’s top economy could be headed for a severe contraction this year.

The death toll in the U.S. reached 150,000 on Wednesday, and it raised the concerns that the economy will take a long time to recover that weighed further on the U.S. dollar. The weak U.S. dollar gave a push to GBP/SUSD pair’s prices above 1.200 level.

On the British Pound front, the Pound rose today after U.K. Mortgage Approvals & Net Lending to Individuals. At 13:30 GMT, the M4 Money Supply by the U.K. for June dropped to 1.0% from the expected 2.2%. The Mortgage Approvals improved to 40K from the projected 35K in June, and the Net Lending to Individuals in June also rose to 1.8B from the expected -0.4B and supported Sterling.

Better than expected macroeconomic data from the U.K. gave strength to British Pound and helped GBP/USD pair to post gains on Wednesday.

Meanwhile, Brexit has remained in focus this week after the London School of Economics warned that both Brexit and the Covid-19 pandemic could severely compromise the U.K. economy.

The U.K. was close to securing a continuity trade deal with Japan that will mirror that of the E.U. pact that Britain will no longer be a part of next January. Both sides are seeking to secure a continuous trade deal once Brexit implemented on January 1.

On Thursday, U.S. dollar investors will be looking ahead for the US GDP figure for the second quarter that is expected to fall by -34.1%; any figure closer to it will be good for the U.S. dollar. The investors will also await the release of the latest U.S. Initial Jobless Claims for July.

However, most people will likely prefer not to invest in the U.S. dollar because of increased external and domestic pressure on American’s economy.

Daily Technical Levels

Support	Pivot	Resistance
1.2863	1.2908	1.2978
1.2792		1.3024
1.2747		1.3094

GBP/USD– Trading Tip

The GBP/USD is also forming a higher high and higher low pattern, which suggests odds of a bullish trend in the GBP/USD pair. The Cable is likely to find support at 1.2970, which is extended by the upward trendline on the hourly timeframe. Above this, the next resistance can be found around 1.30095, along with support at 1.2970 and 1.2945.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.920 after placing a high of 105.241 and a low of 104.771. Overall the movement of the USD/JPY pair remained bearish throughout the day. On Wednesday, USD/JPY pair continued its bearish streak for the 5th day and fell below 105.00 level amid Fed’s decision to keep interest rates near zero.

Federal Reserve Chairman Jerome Powell warned the U.S. faced the most severe economic downturn and said that the economy’s path was extraordinarily uncertain. He said that the increased number of virus cases and the renewed measures to control it have started to weigh on recent weeks’ economic activity. Powell also said that recovery would need help from both fiscal and monetary policy.

The Federal Reserve vowed to keep the rates unchanged as the pandemic still persists and poses considerable economic outlook risks. The rates will remain near zero until the economy was on track to achieve its maximum employment and price stability goals. The U.S. dollar came under renewed pressure after releasing the monetary policy statement and interest rate decision and caused the USD/JPY pair to drop below 105.00 level.

Despite better than expected U.S. macro-economic data, the U.S. dollar remained under pressure and continues to post losses on the day.

At 17:30 GMT, the Goods Trade Balance for June showed a deficit of 70.6B against the expected deficit of 75.5B and supported the U.S. dollar. The Prelim Wholesale Inventories came in as -2.0% against the expected -0.4% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for June increased to 16.6% against the expected 15.6%and supported the U.S. dollar. The U.S. Dollar index fell to its two years lowest level on 93.17, and the U.S. Treasury yields were little changed with a 10-year note holding below 0.60%.

Meanwhile, President Trump said on Wednesday that his administration was allowing for banning the Chinese-owned social media giant TikTok on the back of fears that it could be weaponized to spy Americans.

The U.S. Treasury Secretary Steven Mnuchin also backed this comment and said that Committee on Foreign Investment in the U.S. was also studying the app’s national security risk. He added that TikTok was under serious evaluation, and by this week, a recommendation will be made to the president regarding the app.

On coronavirus front, the U.S. coronavirus fatalities exceeded 150,000 as seven states, including California and Florida, broke new daily death records. Fears for the potential growth of the infections increased in the Midwest area, including Indiana, Colorado, Ohio, and Wisconsin, because of the fast spread of the virus in the U.S.

Early on Thursday, Japan will publish Retail Trade data that is expected to fell by 6.5% compared to the earlier year. The U.S. investors will look forward to GDP data for the second quarter.

Daily Technical Levels

Support	Pivot	Resistance
104.80	105.25	105.55
104.50		106.00
104.05		106.30

USD/JPY – Trading Tips

The USD/JPY trades with a selling bias around 105.526 level, trading within a downward channel that immediately generates resistance at 106.120. On the lower side, the USD/JPY may find support at 105.375 level, and closing of candles below 105.375 can open further selling bias until 104.850. Overall the pair is forming lowers low and lowers high pattern, which signifies selling sentiment among traders. The RSI and MACD suggest selling signals; for instance, the RSI is holding below 50, and the MACD is staying below 0. Today, let’s look for buying trade above 105.200. Good luck!

Tags Daily Brief, EUR-USD, Forex, forex review, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, trading, USD-JPY

Forex Basic Strategies

We Have Simplified The ‘Dolphin Trading Strategy’ For You!

Post author By Reddy Shyam Shankar
Post date 30 July, 2020
No Comments on We Have Simplified The ‘Dolphin Trading Strategy’ For You!

Introduction

One of the most annoying things for a trader is getting stopped out of a ‘long’ trade on the lowest possible tick, after which the prices reverse and move higher. Likewise, nothing can get more annoying than getting out of a ‘short’ trade on the highest possible tick of the move, after which prices reverse and ultimately move in our direction for profit.

All of us would have experienced this unpleasant reality more than once. We have designed a strategy specifically to take advantage of these spike moves in currencies by carefully getting into a trade by anticipating a reversal.

Traders who like to bank on consistent and small profits might feel this strategy appealing despite experiencing frequent stop-outs. Before going through the strategy and the trade setup, we must understand that while it misses infrequently, but when it misses, the losses can be very large.

Therefore, it is absolutely crucial to honor the stop-loss in these setups because when it fails, it can mutate into a relentless runaway move than could blow up our entire account if we continue to hold on to our trades.

Time Frame

This strategy works well on all time frames above the 1 hour. This strategy cannot be used for scalping as the risk is higher.

Indicators

In this strategy, we will not be using any indicators as it is based on pre-determined rules and price action.

Currency Pairs

This strategy applies to almost all the currencies listed on the broker’s platform. However, illiquid pair should be completely avoided.

Strategy Concept

The trade setup that is formed using this strategy lies on the assumption that support and resistance points of tops and bottoms exert an influence on price action after they are breached. They act like a magnetic field attracting prices back to these points after a majority of the stops have been triggered. The thesis behind this strategy is that it takes an enormous amount of power to breakout or breakdown from tops or bottoms that are created after an extended move.

In the case of a top, for example, making a new ‘high’ requires not only huge capital and power but also enough momentum to fuel the rally further. By the time it makes a ‘new’ high, much of the momentum has passed, and it is unlikely that we will see a new ‘high.’ Dolphins have a very strong memory, and since this strategy is based on the memory of the price, we have named this strategy as ‘The Dolphin Strategy.’

Trade Setup

In order to explain the strategy, we have considered the EUR/USD pair, where we will be applying the strategy on the 1-hour time frame. Here is the step-by-step approach to executing the strategy effectively.

Step 1

First, we need to identify a sequence of ‘higher highs’ and ‘higher lows’ on the chart when looking for a ‘short’ trade setup. Similarly, we need to identify a sequence of ‘lower lows’ and ‘lower highs’ when looking for a ‘long’ trade. Then we are required to mark the highest point (‘short’ setup) or the lowest point on the chart (‘long’ setup).

In our case, as will be executing a ‘short’ trade, we have identified a swing ‘high’ on the chart shown in the below image.

Step 2

Assuming that we have calculated our position size, we will ‘sell’ half of our position size at the ‘high,’ which was identified in the previous step. In a ‘long’ setup, we will ‘buy’ half of our position size at the ‘low’ identified previously. If the market is strongly trending upwards or downwards, we have to take a position of size lesser than ‘half.’

We are taking half of our ‘short’ positions at the previous ‘high’ once the market starts moving upwards after a retracement.

Step 3

In this step, we have to measure the distance of the ‘retracement’ or ‘pullback,’ which takes place after the price makes the ‘high’ or ‘low’ that was identified in the first step. Measuring this distance with the help of a measuring tool is crucial as further steps of the strategy are based on this distance.

The below image shows the distance of the ‘pullback’, measured with the help of a vertical pink line.

Step 4

In this step, we need to measure the exact same distance that was measured in the previous step above the ‘high’ in an up move or below the ‘low’ in a down move. In a ‘short’ setup, when the price starts moving above the ‘high,’ we will execute the remaining half of the positions at the half-way mark of this distance. Likewise, in a ‘long’ setup, we will execute the remaining half of our positions at the half-way mark of this distance, when the price starts moving lower.

The below image shows the point on the chart where we have executed the remaining positions.

Step 5

Now that we have entered the market with full position size, we have to set an appropriate stop-loss and take-profit for the trade. The ‘stop-loss’ is placed at the price corresponding to the distance of the ‘pullback’ that was measured in ‘Step-3.’ We take profits at two places in this strategy.

The first ‘take-profit’ is at support turned resistance or resistance turned support line. And the second ‘take-profit’ is at the ‘higher low’ from where the market goes back to the ‘high’ identified in the first step. In a ‘long’ trade, it will be at the ‘lower high’ from where the market goes back to the ‘low’ identified in the first step.

Strategy Roundup

One of the concerns for some traders might have with the ‘Dolphin Strategy’ is its asymmetrical structure and complex rules. Readers with good maths skills and trading experience notice the best of the trade setups using this strategy and harvest high risk-to-reward ratios. Traders need to be very strict with their stop-loss as the market might move in one direction only. However, the strategy works in our favor as it is a high probability setup.

Tags Basic Strategies, Dolphin, Education, Forex, Forex Brokers, Indicator Based Trading, price action trading, Technical Analysis, Technical Trading, The Dolphin Strategy, trading

Crypto Market Analysis

Daily Crypto Review, July 30 – Bitcoin Confirmed as Better Hedge than Gold? BTC fighting for $11,000

Post author By Ilija Rankovic
Post date 30 July, 2020
2 Comments on Daily Crypto Review, July 30 – Bitcoin Confirmed as Better Hedge than Gold? BTC fighting for $11,000

The cryptocurrency market mostly traded sideways as Bitcoin was fighting to regain $11,000. Bitcoin is currently trading for $11,065, which represents an increase of 1.2% on the day. Meanwhile, Ethereum gained 0.33% on the day, while XRP gained 0.45%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Travala.com gained 21.78% on the day, making it the most prominent daily gainer. Digitex Futures (16.68%) and Aave (11.94%) also did great. On the other hand, Ampleforth has lost 35.64%, making it the most prominent daily loser. It is followed by Aurora’s loss of 10% and iExec RLC’s loss of 8.31%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level increased slightly since we last reported, with its value currently at 63.66%. This value represents a 0.35% difference to the upside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization increased since we last reported. Its current value is $325.17 billion, which represents an increase of $4.246 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization had another slow day, where it tried to pass $11,000 and consolidate above it. However, while it has passed the threshold, BTC hasn’t confirmed its position above it, making the $11,000 mark uncertain. The $10,855 support level is, on the other hand, a strong support that has been confirmed.

BTC traders should look for a trade opportunity when BTC bounces off of $10,855 or falls below it.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA and its 21-period EMA
Price is between its top B.B. and its middle B.B (20-period SMA)
RSI is elevated (62.24)
Volume increased (descending)

Key levels to the upside Key levels to the downside

1: $10,855 1: $10,505

2: $11,090 2: $10,015

3: $11,630 3: $9,870

Ethereum

Ethereum spent its day consolidating above the $315 level, finding support at the 21-period moving average. The second-largest cryptocurrency by market cap ensured its position above $302 (at least in the short-term). Its future movement will most likely be determined by Bitcoin’s next move.

Ethereum traders should look for a trade opportunity after the cryptocurrency breaks its consolidation phase.

ETH/USD 4-hour Chart

Technical Factors:

Price is above the 50-period EMA and the 21-period EMA
Price is under the middle B.B. (20-period SMA)
RSI has normalized (56.41)
Above-average volume (descending)

Key levels to the upside Key levels to the downside

1: $340 1: $302

2: $362 2: $289

3: $278

Ripple

Unlike Bitcoin and Ethereum, the third-largest cryptocurrency by market cap maintained high volume and tried to make a move that would break its current ranging position. XRP first moved to the upside, trying to break $0.2454, but failed to do so, which triggered a reaction from XRP bears. The cryptocurrency then made an attempt to break $0.235 to the downside but failed in doing that as well, therefore “locking” XRP in a range between the two resistances.

XRP traders can look for an opportunity when the cryptocurrency breaks its ranging moves to either side.

XRP/USD 4-hour Chart

Technical factors:

XRP in a mid-term descending trend (though it broke the trend in the short-term)
Price above 21-period and the 50-period EMA
Price is between the top B.B. and the middle B.B. (20-period SMA)
RSI is elevated (65.63)
Elevated volume

Key levels to the upside Key levels to the downside

1: $0.235 1: $0.227

2: $0.245 2: $0.214

3: $0.205

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Signals

USDJPY Bearish Bias Below Downward Trendline – Update On Signal!

Post author By Ali B.
Post date 29 July, 2020
No Comments on USDJPY Bearish Bias Below Downward Trendline – Update On Signal!

Today in the early European trading session, the USD/JPY currency pair extended its previous day bearish moves and dropped further below 105.00 level, mainly due to the broad-based U.S. dollar weakness. The worries triggered U.S. selling bias that the second wave of COVID-19 cases in the United States could ruin the recovery in the world’s biggest economy.

The U.S. Treasury bond yields also declined and weighed on the U.S. dollar. On the other hand, the concerns about intensifying US-China relations extended some additional support to the safe-haven Japanese yen, which exerted an additional burden on the currency pair. Apart from this, the (BOJ) Deputy Governor Masayoshi Amamiya commented that the central bank was prepared to ease its monetary policy exerted some pressure on JPY and extended support to the pair. At this particular time, the USD/JPY currency pair is currently trading at 104.94 and consolidating in the range between 104.81 and 105.25.

The fears that the second wave of COVID-19 cases could undermine the U.S. economic recovery still hovering all over the market and kept the U.S. dollar bulls on the defensive. As per the latest report, the number of confirmed coronavirus cases in the Arizona state increased by 2,107 to a total of 165,934, while the death toll increased to 3,408, and the current hospitalization dropped to 2,564. Apart from this state, the number of confirmed coronavirus cases in the Florida state rose to a total of 441,977, while the deaths toll rose to 6,240, and the hospitalization decreased to 9,023 according to Florida’s Department of Health statement. Almost 4 U.S. states reported records high for one-day coronavirus deaths on Tuesday. The cases in Texas passed the 400,000 marks. However, these fears have exerted significant pressure on the market trading sentiment and made the U.S. dollar weak as well.

As in result, the broad-based U.S. dollar failed to gain any positive traction on the day and reported losses as the United States crisis of virus could break hopes for a quick economic recovery, which kept the investors cautious. However, the losses in the U.S. dollar kept the currency pair bearish. Whereas, the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.2% at 93.507.

Across the Pound, the currency pair’s losses could also be associated with Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya comments that the central bank was prepared to ease its monetary policy further without hesitation if necessary, in the face of the coronavirus pandemic. It also added, “Global economy expected to recover only if wave 2.0 stops slowly.” As well as, they cleared that Japan’s business sentiment has started to show signs of recovery after dropping to a worse level.

However, the risk-off market sentiment was further bolstered by the latest disappointment over the much-awaited fiscal package’s lack of progress. The House Speaker Nancy Pelosi and the White House Chief of Staff Mark Meadows recently ruined expectations of U.S. policymakers delivering a much-awaited fiscal package soon. He said that the Republicans and Democrats still had a difference over the stimulus. However, these uncertainties extended some additional support to the Japanese yen’s as safe-haven status.

Apart from this, the recent escalation of diplomatic tensions between the U.S. and China also exerted some downside pressure on the risk sentiment and contributed to the currency pair’s declines. Although, traders are expected to avoid placing any strong bets ahead of the highly-anticipated FOMC decision.

The USD/JPY trades with a selling bias around 104.926 level, trading within a downward channel that provides an immediate resistance at 105.120. On the lower side, the USD/JPY may find support at 104.575 level, and closing of candles below 104.575 can open further selling bias until 104. Overall the pair is forming lowers low and lowers high pattern, which signifies selling sentiment among traders. The RSI and MACD suggest selling signals; for instance, the RSI is holding below 50, and the MACD is staying below 0. Today, let’s look for selling trade below 104.858.

Entry Price – Sell 104.858
Stop Loss – 105.258
Take Profit – 104.458
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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Tags Forex, Forex Trading, Fundamental Analysis, Technical Analysis, Trading Signals, USD-JPY

Forex Basic Strategies

Forex Momentum Trading Using The ‘Momo Strategy’

Post author By Reddy Shyam Shankar
Post date 29 July, 2020
No Comments on Forex Momentum Trading Using The ‘Momo Strategy’

Introduction Some traders are extremely patient and wait for the perfect setup while others are extremely impatient and need to see a move in the next few minutes or hours or else, they are quick to hit the button for a ‘sell’ or a ‘buy.’ Most of the time, these impatient traders are chasing the […]

Introduction

Some traders are extremely patient and wait for the perfect setup while others are extremely impatient and need to see a move in the next few minutes or hours or else, they are quick to hit the button for a ‘sell’ or a ‘buy.’ Most of the time, these impatient traders are chasing the market and necessarily take action when the market has already moved in one direction.

In other words, if they see that momentum builds in one direction, they piggyback on the momentum in hopes for an extension move as momentum continues to build. Once the ‘move’ starts showing signs of losing strength, these impatient momentum traders will also be the first to jump the ship.

So, if our strategy is based on momentum, we need to have solid rules for ‘entry’ and ‘exit’ to protect profits. At the same time, we should be able to do trade management to ride as much of the extension move as possible.

In this regard, we have developed a great momentum strategy that we call the ‘Momo’ trading strategy because we look for momentum or momo burst on very short term price charts.

Time Frame

The ‘momo’ trading strategy works well on the 5-minute time frame. This means each candle represents 5 minutes of price movement.

Indicators

We lay two indicators on the chart, the first one of which is 20-period EMA. The second indicator that we use is the MACD histogram. The settings for the MACD histogram is the default, where the first EMA = 12, second EMA = 26, and signal EMA = 9. All of these are based on the closing price of the candle.

Currency Pairs

This strategy applies only to the major currency pairs. Some of these include EUR/USD, USD/JPY, GBP/USD, GBP/JPY, USD/CAD, etc.

Strategy Concept

We use the Exponential Moving Average (EMA) to help us determine the trend of the market. Once the trend has been established, we use the second indicator to gauge the momentum of the move. We essentially wait for a reversal in the market, and then we try to take position only if the momentum supports the reversal move enough to create a large extension burst.

The position is exited in two segments, and the first half helps us lock some gains and ensures that a winner does not turn into a loser. The second ‘take-profit‘ attempts to catch what could become very large with less risk since we have already booked some profits earlier.

Trade Setup

In order to illustrate the strategy, we have considered the chart of EUR/USD, where we shall be applying the strategy to initiate a trade. All the steps will be performed on the 5-minutes time frame.

Step 1

Open a 5-minutes time frame chart of the desired currency pair and plot the 20-period EMA on the chart. Along with this also plot the MACD indicator on the chart. After plotting both the indicators, look for the currency pair to be trading below the 20-period EMA. The MACD histogram should be negative during this time period.

In the below image, we can see that the market is in a strong downtrend, and currently, the price may be overextended to the downside as indicated by the two indicators.

Step 2

Next, we need to wait for the price to cross above the 20-period EMA. When the price crosses the EMA, we need to make sure that the MACD is in the process of crossing from negative to positive or is in the positive territory no longer than 5 bars ago (in case of a downtrend reversal). The fulling of both these criteria together is a very strong sign of a reversal in the market. The two indicators combined together are very useful for identifying reversal in the market.

The below image shows the crossing of the price above the EMA with a single bullish candle, and, at the same time, the histogram also turns positive.

Step 3

We enter the market for a ‘buy’ or ‘sell’ after the market moves at least ten pips above or below the EMA. This is an aggressive form of ‘entry’ which may not be suitable for everyone. The conservative way of taking an ‘entry’ is by waiting for the market to re-test the EMA and then enter at the retracement. But if the momentum is strong, the market might just continue moving higher. In these times, traders who entered aggressively will only make money. It all depends on the nature of the trader.

As we can see in the below image, we have taken an aggressive ‘entry’ in the pair, i.e., exactly at ten pips from the point of crossing of the EMA. The histogram also shows that the momentum is building on the upside.

Step 4

In this step, we will determine the stop-loss and take-profit for the strategy. As mentioned before, the first take-profit is set at 1:1 risk to reward, which ensures we don’t lose money if the market turns around from the middle. The second and final take-profit is set at 1:2 risk to reward, to take advantage of the market momentum, which leads to an extended reversal. The stop-loss is set just a little below or above the EMA, which will be about 10-15 pips. A conservative trader can place the stop-loss below the ‘low’ or above the ‘high’ from where the market reverses.

We can see in the below image that the momentum continues to build on the upside (indicate by histogram), which is why the market moves smoothly to our final take-profit after we enter.

Strategy Roundup

As this is a momentum-based strategy, we can also use trailing stop-loss to capture gains of the new trend. Since liquidity is the basic requirement of the strategy, we recommended using this strategy in pairs like EUR/USD, GBP/USD, USD/JPY, and some other major pairs only. The ‘momo’ trading strategy is a powerful strategy to capture momentum-based reversal moves. However, sometimes it may not work, and it is important to figure out why it failed.

Tags Forex Trading, Momentum Trading, Momo Trading Strategy, Risk To Reward, RRR, Technical Analysis, Technical Trading

Forex Market Analysis

Russell 2000 Technical Overview

Post author By Eduardo Vargas
Post date 29 July, 2020
No Comments on Russell 2000 Technical Overview

The U.S. stock index Russell 2,000 and the S&P 500 shows a divergence in its long-term trend. While the S&P 500 reaches fresh highs recovering from its 2020’s losses, the Russell 2000 index remains negative.

The U.S. stock index Russell 2,000 and the S&P 500 shows a divergence in its long-term trend. While the S&P 500 reaches fresh highs recovering from its 2020’s losses, the Russell 2000 index remains negative.

As the previous chart illustrates, Russell 2000 continues moving below its 24-month moving average while the S&P 500 already moves on the bullish side. This market context could lead Russell 2000 to see more declines in the coming weeks, although, currently the short-term bias is still hinting to further advances.

Market Sentiment Overview

This year, the index that groups the 2,000 most prominent small-cap U.S. companies sheds near 11.5% (YTD), dragged by the pandemic lockdown.

The following chart exposes to Russell 2000 in its daily timeframe. On the figure, we distinguish the price moving above the 60-day moving average, which leads us to conclude that the short-term bias still remains on the bullish side.

At the same time, from the 52-week high and low range, we note the price action continues moving bellow the 1,523.65 pts, which makes us hold our bullish bias. In this context, the possibility of a strike over the 1,523.65 pts could reveal an extreme bullish sentiment on the Russell 2000 index.

On the other hand, the absence of a bearish reversal pattern discards, for now, the probability of a plummet in the U.S. stock market.

Elliott Wave Outlook

The short-term Elliott wave perspective of the Russell 2000 index exposed in its 4-hour chart reveals the recovery experienced by the U.S. stock market from last March 23rd when the price found fresh buyers at 963.62 pts.

In the previous chart, we observe a first five-wave structural sequence corresponding to a leading diagonal pattern identified as wave ((a)) of Minute degree labeled in black. The first five-wave sequence topped at 1,376.52 pts where the price started to develop a corrective move in three waves corresponding to wave ((b)) in black, which found support at 1,177.26 pts on May 14th.

Once the second wave ended, the price began a new rally, which remains in progress. After the third wave of Minuette degree labeled in blue, Russell 2000 developed a correction identified as a triangle pattern. After the breakout of the upper guideline b-d, the U.S. index resumed its short-term upward trend.

Currently, the price action remains consolidating in a wave ii of Subminuette degree identified in green. In this context, the RSI oscillator continues moving above the 40-level, which leads us to confirm the retracement and the bullish bias of Russell 2000.

Finally, the upward continuation could drive to Russell 2000 toward 1,590.42 and even extend its gains until 1,702.17 pts. On the other hand, the bullish scenario will remain valid while the price continues above 1,377.25 pts.

Tags divergence, Elliott Wave, Forex, Market Sentiment, Russell 2000, S&P 500, Technical Analysis, trading

Forex Market Analysis

Daily F.X. Analysis, July 29 – Top Trade Setups In Forex – FOMC in Focus!

Post author By Ali B.
Post date 29 July, 2020
1 Comment on Daily F.X. Analysis, July 29 – Top Trade Setups In Forex – FOMC in Focus!

On the news front, the focus will be on the FOMC and Fed policy decision which is expected to be 0.25%. Since no change in rate is expected, there’s is likely to be a neutral sentiment in the market. Besides, the investors will also focus on the Pending Home Sales from the U.S. which is expected to have dropped sharply. The dollar can stay weaker on this news.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17166 after placing a high of 1.17734 and a low of 1.16984. Overall the movement of the EUR/USD pair remained bearish throughout the day.

After rising for eight consecutive days, the EUR/USD pair dropped on Tuesday and posted losses for the day as the U.S. dollar rose marginally across the board but remained under pressure ahead of the Fed meeting.

The U.S. Dollar Index was also up on Tuesday and posted a high of 94.0. The recovery in the greenback could be because of correction after losing ground significantly over a few days. Or the recovery could also be because of the rising hopes of the U.S. stimulus package and the economic recovery hopes associated with it.

The Republicans made a proposal on Monday for a stimulus package worth about $1 trillion. The Senate Republicans plan to issue another round of stimulus checks of $1200 while it also cut the emergency unemployment benefit from $600 to $200 per week.

More than 100 billion dollars were allocated to reopen schools in the presented proposal of coronavirus relief fund by Republicans. The proposal is yet to be approved by the Democrats. On the data front, the Spanish Unemployment Rate was decreased to 15.3% from the expected 16.6% and supported Euro. From the American side, at 18:00 GMT, the S&P/CS Composite-20 Housing Price Index for the year was also dropped to 3.7% from the expectations of 4.1%. At 19:00 GMT, the C.B. Consumer Confidence from America dropped to 92.6 in July from 94.0and weighed on the U.S. dollar.

However, the EUR traders ignored the macroeconomic data on Tuesday, and the pair EUR/USD continued to follow the improved U.S. dollar movements.

A two-day Federal Reserve meeting started on Tuesday, during which investors expected reaffirmation on the outlook. Though no monetary policy changes were expected, traders were speculating about a change in emphasis in the Fed’s forward guidance at the meeting.

On the other hand, the bearish correction in EUR/USD pair on Tuesday was due to the rise in its prices for eight consecutive days. The trend in the EUR/USD pair was still positive, and even a sharper slide could have been normal.

On the previous day, the pair EUR/USD posted the highest daily close since June 2018 near 1.1780 level, confirmed that both single currencies had a solid momentum. And despite falling and posting losses on Tuesday, the pair EUR/USD continued to hold just below 1.18 level, which shows that it has a key multi-year trend resistance.

Daily Technical Levels

Support	Pivot	Resistance
1.1686	1.1730	1.1762
1.1654		1.1806
1.1610		1.1837

EUR/USD– Trading Tip

The EUR/USD is trading at 1.1728 level, holding above resistance to become a support level of 1.1715. On the hourly timeframe, the EUR/USD was previously forming highers high and highers low pattern, but now the recent cycle seems to change the trend. A bearish breakout of 1.1715 can drive more sales until the 1.1683 level. On the higher side, the resistance can stay at 1.1780.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29316 after placing a high of1.29526 and a low of 1.28379. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair extended its previous day’s gains and maintained its bullish streak for the 8th consecutive day on Tuesday amid improved market mood on vaccine hopes. The U.S. Dollar struggled on Tuesday after hopes of a COVID-19 vaccine boosted the risk sentiment. As in result, the greenback suffered as markets inclined towards riskier assets. The positive news about vaccine development supported the risk sentiment.

The pharma firms worldwide are working on treatment and vaccine development that provides multiple routes to success. Companies like Moderna, Pfizer, and AstraZeneca were all pushing to get their vaccines across the line.

Meanwhile, the U.S. Dollar was also supported ahead of the 2-days Federal Reserve meeting that started on Tuesday. Though no change in interest rate is expected, the traders were cautious to know about the statement of meeting to find more clues about the U.S. economy.

However, the release of S&P/Case-Shiller Home Price Indices for May fell below the forecast of 3.9% to 3.7%. It is because investors have become concerned about America’s economic recovery from the coronavirus pandemic.

The Richmond Manufacturing Index was released at 18:59 GMT as 10 for July against the expectations of 5 and supported the U.S. dollar. However, the C.B. Consumer Confidence also dropped to 92.6 from the forecasted 94.0 and weighed on the U.S. dollar that eventually added in the currency pair gains.

From the GBP side, the Pound was benefited from a stronger than expected CBI Distributive Trades Survey that rose to 4% from the expected -37% and gave hopes to investors that the British economy could be on the road to recovery.

Meanwhile, the Sterling traders were cautious after Prime Minister Boris Johnson warned of the possible signs of the pandemic’s second wave in parts of Europe. This raised concerns that the U.K. could also suffer from a second wave of coronavirus in the month ahead. The London School of Economics has also reported that Brexit could prove a double-shock to the economy. As a result, GBP traders remained cautious as UK-EU post-Brexit trade talks continue despite a lack of progress.

The GBP/USD pair traders will look forward to the Fed’s interest rate decision and the statement of the meeting. If fed in notably downbeat in s monetary policy statement, the GBP/USD pair would edge higher as concerns about the global economy grow.

The Brexit developments will also drive the GBP/USD pair in the coming days of the week as there will be a lack of macroeconomic data until next week. If the talks between the E.U. & U.K. show any progress, then Sterling would rise.

Daily Technical Levels

Support	Pivot	Resistance
1.2863	1.2908	1.2978
1.2792		1.3024
1.2747		1.3094

GBP/USD– Trading Tip

On the 4 hour chart, the GBP/USD has completed 23.6% retracement at 1.2927 level, and closing below this level has the potential to lead GBP/USD prices towards 1.2910, which marks 38.2% Fibonacci retracement level. On the lower side, the GBP/USD pair can find support at 1.2810 and 1.2765 level. Conversely, the resistance stays at 1.2975. Let’s consider taking buying trade over 1.2760 until 1.2860 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.073 after placing a high of 105.684 and a low of 104.954. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair extended its bearish trend and losses on Tuesday amid U.S. dollar weakness and struggled with 105 level. The haven was on the bid, which supported the Japanese Yen and caused a decline in the USD/JPY pair.

The rising numbers off coronavirus cases in the U.S. and the Federal Reserve Interest Rate decision event were the market’s dominating sentiment. Meanwhile, the U.S. stimulus negotiations and mixed earnings reports sent the investors to the sidelines.

The greenback managed to correct some of its oversold conditions during the past sessions; however, the USD/JPY pair remained still on the bearish path on Tuesday. The reason behind it was that background picture containing the concerns about the spread of coronavirus, and the ongoing US-China tensions did not change.

The U.S. Senate Republicans revealed the new coronavirus aid proposal that will need Democrats’ support. The package would include another round of $1200 in direct payments to individuals and a reduction in federal unemployment benefits from $600 to $200 per week and also more than $100 billion for reopening schools.

In remarks, Nancy Pelosi, a white house speaker, criticized it and called it a “pathetic” offer that was not enough to support the country.

On the data front, Japan published the June Corporate Service Price Index, which improved to 0.8% from 0.5% in May. On the U.S. side, the Richmond Manufacturing Index raised to 10 from the expected five and supported the U.S. dollar. The S&P/CS Composite-20 HPI dropped to 3.7% from the expected 4% and weighed on the U.S. dollar. The C.B. Consumer Confidence also dropped to 92.6 from the expected 94.0 and weighed on the U.S. dollar.

The poor than expected Consumer Confidence and HPI data added further losses in the USD/JPY pair on Tuesday. Furthermore, despite the prospects of a prolonged U.S. recession, the U.S. dollar will favor any breakdown in the market confidence due to its dominance in the global payment system. On JPY front, the currency is sensitive to geopolitical news in the Asian region, and with the ongoing conflict between U.S. & China, JPY is set to remain firm for the time being. JPY was the third worst-performing currency this month after the USD and Canadian Dollar.

Daily Technical Levels

Support	Pivot	Resistance
104.80	105.25	105.55
104.50		106.00
104.05		106.30

USD/JPY – Trading Tips

The USD/JPY trades with a selling bias around 105.526 level, trading within a downward channel that provides an immediate resistance at 106.120. On the lower side, the USD/JPY may find support at 105.375 level, and closing of candles below 105.375 can open further selling bias until 104.850. Overall the pair is forming lowers low and lowers high pattern, which signifies selling sentiment among traders. The RSI and MACD suggest selling signals; for instance, the RSI is holding below 50, and the MACD is staying below 0. Today, let’s look for buying trade above 105.200. Good luck!

Tags Daily Brief, EURUSD, Forex, forex review, Forex Trading, Fundamental Analysis, GBPUSD, Price Action, review, Technical Analysis, Technical Outlook, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, July 29 – BTC consolidating under $11,000; XRP Skyrocketing

Post author By Ilija Rankovic
Post date 29 July, 2020
1 Comment on Daily Crypto Review, July 29 – BTC consolidating under $11,000; XRP Skyrocketing

The cryptocurrency market mostly traded sideways after major breakthroughs in the past ten days. Bitcoin is currently trading for $10,880, which represents a decrease of 2.76% on the day. Meanwhile, Ethereum lost 3.38% on the day, while XRP gained 2.42%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Aave gained 20.59% on the day, making it the most prominent daily gainer. iExec RLC (20.52%) and THORChain (19.48%) also did great. On the other hand, Ampleforth has lost 16.44%, making it the most prominent daily loser. It is followed by Digitex Futures’ loss of 12.01% and HedgeTrade’s loss of 11.28%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level decreased since we last reported, with its value currently at 63.31%. This value represents a 1.02% difference to the downside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization skyrocketed and now confirmed its position above the $300 billion mark. Its current value is $320.93 billion, which represents a decrease of $0.06 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization had a rather slow day, unlike the past days, which passed in BTC making significant gains. The volume is slowly fading away while the price is trying to find resistance. Bitcoin fell under $11,000 and is currently consolidating above the $10,855 support level. However, it is still unsure if Bitcoin will stay above it or fall under.

BTC traders should look for a trade opportunity when BTC breaks $10,855 to the downside or $11,090 to the upside.

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA and its 21-period EMA
Price is between its top B.B. and its middle B.B (20-period SMA)
RSI is elevated (69.73
Volume greatly increased (descending)

Key levels to the upside Key levels to the downside

1: $10,855 1: $10,505

2: $11,090 2: $10,015

3: $11,630 3: $9,870

Ethereum

Ethereum also had a slow day, while its price drop reflected Bitcoin’s drop (percentage-wise). The second-largest cryptocurrency by market capitalization is trying to consolidate around the $315 mark, while its volume is fading. Ethereum has strong support at $302, which might get challenged shortly.

Ethereum traders should look for a trade opportunity after the cryptocurrency is done with consolidating.

ETH/USD 4-hour Chart

Technical Factors:

Price is above the 50-period EMA and the 21-period EMA
Price is at the middle B.B. (20-period SMA)
RSI is elevated (58.66)
Extremely high volume (descending)

Key levels to the upside Key levels to the downside

1: $340 1: $302

2: $362 2: $289

3: $278

Ripple

Unlike Bitcoin and Ethereum, the third-largest cryptocurrency by market cap had quite a good day, which brought its price above $0.227 and $0.235 resistance levels. XRP made a move, which was sparked by an influx of buyers. The move is still not over, and XRP is fighting to stay above $0.235, though that is unlikely unless the cryptocurrency pushes its price towards the $0.245 level.

XRP traders can look for an opportunity in pullbacks after the bullish move.

XRP/USD 4-hour Chart

Technical factors:

XRP in a mid-term descending trend (though it broke the trend in the short-term)
Price above 21-period and the 50-period EMA
Price is above the top B.B.
RSI is in the overbought territory (73.69)
Elevated volume

Key levels to the upside Key levels to the downside

1: $0.235 1: $0.227

2: $0.245 2: $0.214

3: $0.205

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Basic Strategies

Heard Of The ‘Good Morning Asia’ Forex Trading Strategy?

Post author By Reddy Shyam Shankar
Post date 28 July, 2020
No Comments on Heard Of The ‘Good Morning Asia’ Forex Trading Strategy?

Introduction

In the previous article, we discussed a strategy that was in the European session. However, there are a fair number of traders who prefer the U.S. session as they feel the market tends to be more exciting and thrilling. These traders consider the Asian session to be boring and quiet most of the time.

Many part-time retail traders based in the United States and Europe miss out on opportunities in European and U.S. sessions because of work and other business commitments. The only time they are left with happens to fall in the apparent boring and quiet Asian session. Therefore, it becomes necessary to come out with a strategy that is exclusively meant for the Asia session.

The strategy we will be going to discuss today is suitable for trading during the early-morning Asian hours. This time period has numerous opportunities for traders in different time zones across the world, whether they are part-time or full-time traders. We hope that the strategy will greet everyone like the bright morning sun.

Time Frame

The good-morning Asia strategy works well on the 4-hour time frame. This means each candle represents one day of price movement.

Indicators

This strategy is based on pure price action, and hence no indicators will be used during the process.

Currency Pairs

This strategy applies only to the AUD/JPY currency pair.

Strategy Concept

Opening hours of the Asian market begin a couple of hours after the U.S. market closes. The Asian market direction tends to take its cue from the previous day’s movement during the U.S. session because the U.S. market is the largest economy of the world, and most of the institutional banks are located in the U.S.

It is observed that when the U.S. market closes with the bullish sentiment, the Asian market usually starts the day bullish. If the U.S. market closes with the bearish sentiment, the Asian market remains bearish throughout the day.

During the early morning Asian hours, the best currency pair to take advantage of this phenomenon is none other than the AUD/JPY, as the Japanese Yen and the Australian dollar are the most active currency during the Asian session.

Looking at the price action, we take an entry right after the U.S. market closes at 05:00 PM. The first requirement of the strategy is that we need a ‘range’ or a ‘channel’ before the U.S. market closes. Depending on the position of the price and where the candle closes before the U.S., we take an entry. There are many rules that we need to follow before we can use the strategy profitably.

Stop-loss is placed above or below the technical levels, which is the easiest part of the strategy. The risk-to-reward ratio for this strategy is anywhere between 1.5 to 2, which is quite good.

Trade Setup

For this strategy, the closing of the 4-hour candle corresponding to 5:00 PM New York time is crucial for the strategy. Here are the steps to execute the strategy.

Step 1

Firstly, we need to identify a ‘range’ or ‘channel’ on the chart of AUD/JPY. This becomes our trading region, where we will be carrying out all the trades. A ‘range’ or ‘channel’ is confirmed only if the price has reacted and reached the other end at least twice after touching the extremes.

We have considered an example of a trade where we will be applying the rules the strategy step by step. The below image shows the 4-hour time frame chart of the AUD/JPY pair, where we identified a ‘channel’ with multiple touches on either side.

Step 2

In this step, we need to pay close attention to the position of the price and the closing of the U.S. market. The most important part of the strategy is looking out for the price action taking place at the end of the range, which should be occurring at the close of the U.S. market. Depending on the signal we get from the market, we will take an appropriate currency pair position.

At the close (U.S.) if the price closes as a bullish candle from the support, we will enter for a ‘buy’ at the opening of the subsequent candle. If the price closes as a bearish candle from the resistance, we will enter for a ‘sell’ at the opening of the subsequent candle.

Step 3

In this step, we take an ‘entry’ with a suitable size and determine the stop-loss and take-profit for the trade. As mentioned earlier, we will enter for a ‘buy’ or ‘sell’ right after the U.S. market closes, and the next candle opens. This ensures that the risk to reward will be higher.

The stop-loss for the trade is placed a few pips below or above the key technical level of support or resistance. To increase the risk to reward ratio, we can also place it just above or below the previous candle. This would require some experience of using the strategy over a long time. The ‘take-profit’ is set at the other end of support or resistance. We can have a larger ‘take-profit’ if we are trading with the trend of the market. The ‘take-profit 1’ ensures that we lock in some profits if the trade goes against us.

Strategy Roundup

This strategy is suitable for traders with little time to trade. Furthermore, it does not require complex market analysis. It does have some strict rules which might reduce the creation of the trade setups. The ‘entry’ time of the trade is fixed at every morning. Since Japan and Australia are the first countries in Asia where markets open, there will be ample liquidity in the market that will allow traders to execute ‘long’ and ‘short’ positions very easily. All the best!

Tags Asia Session, AUD/JPY, Education, Forex, Forex Strategies, Forex Trading, Good Morning Asia Strategy, Technical Analysis, Technical Trading, trading

Forex Market Analysis

Daily F.X. Analysis, July 28 – Top Trade Setups In Forex – U.S. C.B. Consumer Confidence In Focus!

Post author By Ali B.
Post date 28 July, 2020
1 Comment on Daily F.X. Analysis, July 28 – Top Trade Setups In Forex – U.S. C.B. Consumer Confidence In Focus!

On the news front, the U.S. will be releasing C.B. Consumer Confidence during the New York session. C.B. Consumer Confidence is expected to drop from 98 to 94, and it can weigh dollar prices. Simultaneously, the Spanish Unemployment Rate will be in focus during the European session to determine price action in the Euro pairs today.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17511 after placing a high of 1.17812 and a low of 1.17447. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair extended its gains and raised for the 7th consecutive session on Monday to reach 22 months’ top level. The EUR/USD [air even crossed the 1.1700 marks and touched the high of 1.17812 on Monday, the highest since September 2018.

The move was attributed to the U.S. dollar’s weakness as a combination of the sentiment in the risk complex plus the persistent selling of the U.S. dollar in favor of other safe have assets kept the greenback under heavy pressure.

The U.S. Dollar Index fell to 2 years low near 93.60 level and weighed heavily on greenback that ultimately helped EUR/USD pair to grow on the chart for the 7th consecutive session.

On data front at 13:00 GMT, the M3 Money Supply for the year dropped in June to 9.2% from the expected 9.5% and weighed on Euro. The Private Loans for the year also fell in June to 3.0% from the anticipated 3.2% and weighed on Euro. The German Ifo Business Climate, however, was improved to 90.5 points from the expected 89.2 points in July.

In July, the improvement in German Ifo Business Climate could be attributed to the new stimulus package by E.U. commission that was agreed by all E.U. states in 4 days E.U. Summit with some alterations. This improvement in Business Climate for the largest economy of Europe gave strength to local currency and added in the EUR/USD currency pair’s gains.

The sharp surge in EUR/USD pair towards levels last seen in September 2018 above 1.1700 level, confirmed that both single currencies had a solid momentum. USD has a negative momentum triggered by the strong selling bias after the fears of U.S. economic recovery and mounting coronavirus cases. At the same time, EUR has a positive momentum after the E.U. states agreed on a Europe Recovery Fund worth 750 Billion euros. On Wednesday, the Federal Reserve will announce its decision about the monetary policy. Though no change is expected, the comments about the growing concerns on U.S. economic recovery would be key.

Daily Technical Levels

Support Resistance

1.1684 1.1816

1.1601 1.1865

1.1552 1.1948

Pivot Point: 1.1733

EUR/USD– Trading Tip

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.28793 after placing a high of 1.29025 and a low of 1.27755. Overall the movement of GBP/USD remained bullish throughout the day. The GBP/USD pair extended its gains and maintained its bullish streak for the 7th day amid broad-based U.S. dollar selling bias.

The pound surged to nearly five months high level against the U.S. dollar and reached above 1.2900 marks on Monday, but the signs that Brexit negotiations have delayed could prompt bearish bias to rise further.

The decline in the U.S. dollar continuously supported the rally in the GBP/USD pair. The greenback continued to decline that started last week. It was unable to find support because of worries about the economic recovery in the U.S. and rising expectations about more stimulus from the Federal Reserve.

Furthermore, the macroeconomic data on Monday from the U.S. showed that Core Durable Goods Orders in June dropped to 3.3% from the 3.5% of expectations and weighed on the U.S. dollar. However, the Durable Goods Orders for June raised to 7.3% against the expected 7.0% and supported the U.S. dollar.

On Brexit front, the E.U. and U.K. wrapped up their last round of negotiations in London last Thursday but failed to find a solution on key sticking points, including access of E.U. vessels to fish British waters that have so far muted the progress. The E.U. chief negotiator Michel Barnier has emphasized that talks between E.U. & U.K. needed to be completed by October to ratify a potential deal would be lengthy.

On Monday, the strength in Sterling was largely driven by a sharp fall in the dollar as investors bet that an average inflation targeting mechanism will be introduced by the Federal Reserve in its next meeting this week, and that would likely keep interest rate lower for longer.

The Federal Open market Committee will kick off its 2-day meeting on Tuesday. The interest rates are expected to remain the same within the range of 0% t0 0.25%. However, the comments from FOMC members will be key to watch to take fresh clues about the economic condition of the U.S.

Daily Technical Levels

Support Resistance

1.2807 1.2930

1.2732 1.2978

1.2684 1.3053

Pivot Point: 1.2855

GBP/USD– Trading Tip

On the 4 hour chart, the GBP/USD has closed with a bearish engulfing candle, which suggests odds of more selling the in Cable. On the lower side, GBP/USD can find support at 1.2810 and 1.2765 level. Conversely, the resistance stays at 1.2900 and 1.2975. Let’s consider taking buying trade over 1.2760 until 1.2860 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.378 after placing a high of 106.105 and a low of 105.114. Overall the movement of the USD/JPY pair remained bearish throughout the day. On Monday, the USD/JPY pair fell sharply and reached 105 level as the JPY capitalized on the risk-off flows at the start of the week. The broad-based U.S. dollar weakness and Japanese Yen’s strength as safe-haven currency caused the pair to decline for the 3rd consecutive session.

The U.S. Dollar Index was down 0.83% on Monday at 93.56 level, which, combined with the decreased Core Durable Goods Orders in June data, weighed on the U.S. dollar. As in result, greenback suffered further and pushed USD/JPY currency pair towards fresh multi-month low.

At 17:30 GMT, the Core Durable Goods Orders were declined to3.3% from the 3.5% of expectations and weighed on the U.S. dollar that ultimately pulled the USD/JPY pair towards the lowest level. At 17:30 GMT, the Durable Goods Orders for June increased to 7.3% against the expected 7.0%

On Monday, the Bank of Japan released the summary of opinions at a July rate review. BOJ’s policymakers debated how the COVID-19 pandemic could reshape monetary policy and its impact on the economy. Many in the nine-member board warned any domestic recovery from the pandemic’s disturbing economic impact would be uncertain and could be delayed depending on how long it takes to contain the outbreak.

Several board members cautioned that any further economic stress would require policymakers to pay close attention to Japan’s banking system and its long-term expectations of inflation. One member suggested that further action was needed with close cooperation with the government and other central banks.

At the July rate review, the Bank of Japan kept the monetary policy steady and gradually maintained its view that the economy would gradually recover from the crisis. In short, the Bank of Japan’s July meeting summary of opinion suggested that the nation’s economy is likely to improve in the latter half of this year, but the impact of a pandemic on inflation and growth expectations must be watched.

On the other hand, US-China tensions escalated after China took over the U.S. consulate locations in the southwest city of Chengdu on Monday. The move came in after the facility was ordered to be vacated in revenge for the closure of China’s consulate in Houston last week.

U.S. Secretary of State Mike Pompeo said that Washington and its allies must use “more creative and assertive ways” to press the Chinese Communist party to change its ways.

The increased tensions between both nations kept the Japanese Yen stronger due to its safe-haven status. The strong Japanese Yen then pushed the USD/JPY pair lower towards multi month’s low level.

Daily Technical Levels

Support Resistance

104.91 106.01

104.47 106.65

103.82 107.10

Pivot Point: 105.56

USD/JPY – Trading Tips

Tags Daily Brief, EURUSD, Forex, forex review, Fundamental Analysis, GBPUSD, Technical Analysis, Technical Outlook, trading, USDJPY

Forex Course

141. Understanding The Concept Of Breakout

Post author By Reddy Shyam Shankar
Post date 28 July, 2020
1 Comment on 141. Understanding The Concept Of Breakout

Introduction

A price movement can be considered a breakout when the price clears any critical level on the price chart. These levels can be support/resistance, trend lines, Fibonacci levels, etc. Many professional traders wait for the price to hold above the breakout to take long positions. Conversely, they wait for the price to hold below the breakdown level to take short positions.

When the price confirms that the breakout is valid, volatility tends to increase as the price started to move in the direction of the breakout. The reason why breakout trading is popular among the traders is that it sets the future trend direction. This makes it easier for traders to make consistent profits from the market.

Breakout trading strategy is universal, and we can apply it to the hourly, daily, weekly, or even monthly timeframes. Investors, swing traders, and intraday traders prefer breakout trading the most compared to any other form of trading. The longer price action holds inside the breakout, the stronger breakout we must expect, and also, the longer time the price action moves in that direction.

During the consolidation phase, when the price is preparing to break out in any direction, we will notice a couple of price pattern formations such as channels, triangles, flags, etc. These patterns will give us the clues on which side the breakout may occur—using these signals to enter a trade before the breakout is crucial. But if you are a conventional trader, wait for the price to break above or below the price to take the trade.

Trading Various Breakouts

Trend Line Breakout

Ascending Trend line Breakout

The below price chart represents an ascending trendline breakout on the NZD/CHF daily Forex chart.

As you can see in the below image, when price action broke below the ascending trend line, it is an indication of sellers stepping into the game. The hold below the trend line confirms the selling entry. We have placed our stop-loss at the previous high and rode the huge downtrend.

Descending Trend line Breakout

The image below represents the breakout of a descending trend line in the GBP/CHF Forex pair.

As you can see below, we took a buy entry when price action went above the trend line and started to hold above. The hold confirms that the buyers are in control, and they are ready to make a brand new higher high. After our entry, price action blasted to the north and printed a brand new higher high. We chose to close our trade at the most recent higher high. The stop-loss order placed just below the trend line is safe enough.

Range Breakout

The price chart below represents a Ranging market in the NZD/JPY Forex pair.

Most of the time, you would have observed traders taking buy/sell trades when the market moves in a range. But in this strategy, let’s trade the market only when the price breaks the range. Just like any other breakout, Range breakout also indicates the winning of one-party over the other.

The hold above the breakout confirms that the range is broken, and it is a good idea to go long. We choose smaller stops because the hold above the range gave additional confirmation.

That’s about breakouts and how to basically trade different breakouts in the market. In the upcoming lessons, we will be going through many of the concepts related to breakouts.

Tags Breakout trading, Education, Forex, Forex Course, Forex Trading, Range Breakout, Technical Analysis, Technical Trading, Trend Line Breakout

Crypto Market Analysis

Daily Crypto Review, July 28 – Bitcoin Spikes to $11,000; Over $300 Million Liquidated

Post author By Ilija Rankovic
Post date 28 July, 2020
No Comments on Daily Crypto Review, July 28 – Bitcoin Spikes to $11,000; Over $300 Million Liquidated

The cryptocurrency market spent made yet another boom as Bitcoin passed the $11,000 benchmark. Bitcoin is currently trading for $11,024, which represents an increase of 7.7% on the day. Meanwhile, Ethereum lost 1.04% on the day, while XRP gained 2.85%.

Daily Crypto Sector Heat Map

When talking about top100 cryptocurrencies, Kava.io gained 14.29% on the day, making it the most prominent daily gainer. Divi (13.17%) and Band Protocol (12.84%) also did great. On the other hand, Ampleforth has lost 23.81%, making it the most prominent daily loser. It is followed by Flexacoin’s loss of 17.11% and Augur’s loss of 11.43%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level increased since we last reported, with its value currently at 64.33 %. This value represents a 2.78% difference to the upside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The cryptocurrency market capitalization skyrocketed and now confirmed its position above the $300 billion mark. Its current value is $320.99 billion, which represents an increase of $20.52 billion when compared to the value it had yesterday.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

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Bitcoin

It’s safe to say that the largest cryptocurrency by market capitalization had another amazing day as it broke a major benchmark of $11,000 and reaching a final price of $11,394 before cooling down. The moment Bitcoin broke $10,000, on-chain activity registered a great increase in exchange inflow, which ultimately led to this fast price increase. During the process, Bitcoin managed to liquidate over $300 million in sell orders.

BTC traders should look for a trade opportunity either with another move up (aggressive) or when the price cools down slightly and makes a top (safer).

BTC/USD 4-hour Chart

Technical factors:

Price is currently above its 50-period EMA and its 21-period EMA
Price is slightly below its top B.B.
RSI is in severely overbought territory (84.33)
Volume greatly increased

Key levels to the upside Key levels to the downside

1: $10,855 1: $10,505

2: $11,090 2: $10,015

3: $11,630 3: $9,870

Ethereum

Ethereum looks like it has found its top at $330 after rising in price for the past 6 days. The final move brought the second-largest cryptocurrency by market cap to the highs of $333 before cooling off a bit. Ethereum now seems like it will (if nothing major happens to Bitcoin) possibly head towards the nearest support level to test it.

Ethereum traders should look for a trade opportunity in Ethereum’s pullbacks and confirmations.

ETH/USD 4-hour Chart

Technical Factors:

Price is above the 50-period EMA and the 21-period EMA
Price is below the top B.B.
RSI elevated (64.32)
Extremely high volume

Key levels to the upside Key levels to the downside

1: $340 1: $302

2: $362 2: $289

3: $278

Ripple

The third-largest cryptocurrency by market cap had quite a stable day as it confirmed its path above $0.214. XRP then bounced up and tried to make a break above the $0.227. However, the move was unsuccessful due to the wall of sellers present. XRP will most likely continue to trade within a range, bound by $0.214 to the downside and $0.227 to the upside.

XRP traders can look for an opportunity within the range XRP is currently trading in.

XRP/USD 4-hour Chart

Technical factors:

XRP in a mid-term descending trend (though it broke the trend in the short-term)
Price above 21-period and the 50-period EMA
Price is below the top B.B.
RSI is elevated (61.27)
Average/slightly higher than average volume

Key levels to the upside Key levels to the downside

1: $0.227 1: $0.214

2: $0.235 2: $0.205

3: $0.245 3: $0.2

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Technical Analysis

A Fundamental Analysis Twist for the Technical Trader

Post author By Forex Academy
Post date 27 July, 2020
No Comments on A Fundamental Analysis Twist for the Technical Trader

Fundamental analysis mostly encapsulates social, economic, and political analyses of the forex market and in what ways they may affect currency pairs. It is known that in the trading strategy we have 3 types of analysis: technical, fundamental, and sentimental. How big attention we should give to this type of analysis? Could fundamental analysis be […]

There is a big difference between the forex investor and the forex trader. Forex investors have time to just sit back and let somebody else do the work. They can make trades based on pure speculation or slow-moving events. On the other hand, traders grind, they do hard work, they get dirty. They get in, make money, and get out, based on what they have right in front of them. Does fundamental analysis apply to traders? How exactly forex twitter and big multi-billion dollar financial organizations and their experts affect our trading?

Fundamentals include politics, global market conditions, and economic indicators and reports. We will try to dig deeper into these. Politics can greatly affect the price of a currency pair every once in a while especially because of media. We just never know when. So trying to follow anything politically might be the waste of time because we are never going to be able to anticipate what some of the world leaders are going to say or do. If we can’t anticipate then there’s no way we can trade it. Global market conditions like: “What is the state of the European Union right now?” or “What is the state of the United States economy?”

With questions like this people can speculate for hours and how that might affect the economy which when it trickles all the way down to us and what we want to happen with the currency pair we trading, means absolutely nothing. Finally, when we do hear a piece of news that might be beneficial for us, it is really hard to process. For example, something big happens in China. How is that going to affect the economy and interest rates? Then, how will that affect inflation? Ultimately, how is that going to affect the price of yuan? Simply, it can be too many variables in place for anybody to really decipher how any of this information is going to directly affect the currency pair that we want to trade.

With fundamentals, it’s usually big, grandiose, complicated guessing game with all these movable parts that in the end doesn’t amount to anything. When it comes to technical analysis at least we have things in front of us that we do know and we actually can use. Now in our world, what we in real-time do have to contend with are economic indicators and reports. Things like non-farm payrolls, PMI numbers, or interest rates. When news reports come out saying if those figures have changed or if they haven’t, we know when they are coming. That might be our advantage. A lot of traders are used to watching different news outlets but we need to try to distinguish the real information from the people who give us useless fundamental analysis that cannot help us. These things only divert us from what is important.

Forex Twitter channels are also sources with questionable usage. Someone can be pretty unhelpful and make a lot of money in the forex world just by tweeting out news events that already happened. As traders, we are on top of the things, and we don’t need to be told some things because we have 2 eyes and we have a chart and that tells us all we ever need to know. So we might consider clicking the unfollow button on most of these twitter feeds. Sometimes we might hear about a news event that already happened and somebody on financial news saying things like: “Building permits in the US came in at 1.24 million and this is slightly below the forecast of 1.27 million”. Well, we could be grateful for that update but the thing is this is not really an update. Like every forex trader on planet, we also have our news calendars and we are usually pretty informed, we already know that all of that just happened. If we were trading the dollar, for example, we would probably be aware of all this. If not, most of this information would be totally irrelevant for someone who is a forex trader.

Like we said forex investors might do something with this kind of information because of their slow, laid-back pace of playing the game, but we as forex traders have been moved on five different ways since that news event came out. Financial news channels and forex twitter are full of these things. Another thing that these news outlets like to do is not only do they tell us what happened in the past, they tell us what’s coming up. Again, we have a calendar, we know that. It is our responsibility to know. Things like this don’t really apply to a real trader. If someone of us is a super forgetful, irresponsible trader then paying attention to fundamental analysis is the least of his problems. Sometimes on certain web sites, we might see people try to predict where the price is going to go based on the news that just came out or the news that might be coming up.

Still, there are major issues around this. It is still information that is hard to use. A lot of times what boils down to what they’re saying is: “Price might go up or down”. Well, thank you guys for that, that’s ultra helpful. And when they do some kind of predictions they almost always point to price levels, support and resistance line, or Fibonacci level. These predictions are usually wrong according to professional traders. Traders, who is responsible for making prices go up and down? We all know this. It’s the big banks, it always has been. When it comes to news events banks don’t have a reason to move, they just don’t react. Before the news event even comes out the big banks already know where they’re going to take price. It’s just the matter if the trader’s money switches from one way to another based on the news event that comes. if that news event is so one-sided and for example, the euro gets stronger. The banks still control when that happens, so they might lose a little amount of money during this process because the news could be just great in this situation.

In the meantime, they are going to find out where all those stop losses are and they are going to knock them out so they can collect as much money as they possibly can from spot forex traders before they take price where it’s going to go. It is not the case that great news just comes out for a particular currency and price immediately starts shooting that way. We usually see a lot of up and down jagged action first, a lot of fake news, sometimes prices are going the wrong way and we wonder why. That is the banks doing what they’re doing and they will always get theirs. The sooner we realize this the better off we could be. Simply, trying to follow fundamental analysis might be a glorious waste of time. This could actually be good news because technical analysis in the end always wins. If our technical analysis is amazing we might almost forget about fundamental analysis which can be liberated because it is a huge discombobulated confusing time-eater in most cases.

Of course, we still need to be aware of big news events but that shouldn’t be a problem because we have a news calendar. That might be the reminder that we need to focus on unless there’s a major political election coming up or some financial turmoil. The news event coming out usually does not apply to any of the currencies we trade, most of the time we can just slip through it. We could pretty much widdle all of the fundament analysis down into a small handful of news events that we’re already know are happening and when they’re happening, we could adjust our levels a little bit and move on. We have this wonderful luxury as spot forex traders that people who trade stocks, bonds, and CFD’s don’t have in a sense to where we can do over 99% of our trading directly from our charts and still potentially have great success with it. Most traders never realize this. After everything discussed here, we might try to re-think how and where we should invest our time.

Tags forex analysis, forex education, Technical Analysis