Tag: Technical Analysis

Categories
Forex Market Analysis

Daily F.X. Analysis, June 22 – Top Trade Setups In Forex – Mixed Market Sentiments Plays! 

On Monday, the market continues to trade sideways due to a lack of high impact economic events. Last week, the current account balance from the U.S. showed a deficit of 104B against the expected 101B deficit and weighed on the U.S. dollar, which dragged the currency pair USD/JPY on the downside. In his speech on Friday, Fed Chair Jerome Powell suggested and demanded from Congress to ramp up the federal relief spending program. According to Powell, the government should aid the states and provide more unemployment benefits along with the public health measures to keep the economy afloat.

On Monday, the market continues to trade sideways due to a lack of high impact economic events. Last week, the current account balance from the U.S. showed a deficit of 104B against the expected 101B deficit and weighed on the U.S. dollar, which dragged the currency pair USD/JPY on the downside. In his speech on Friday, Fed Chair Jerome Powell suggested and demanded from Congress to ramp up the federal relief spending program. According to Powell, the government should aid the states and provide more unemployment benefits along with the public health measures to keep the economy afloat.

On Monday, the market continues to trade sideways due to a lack of high impact economic events. Last week, the current account balance from the U.S. showed a deficit of 104B against the expected 101B deficit and weighed on the U.S. dollar, which dragged the currency pair USD/JPY on the downside. In his speech on Friday, Fed Chair Jerome Powell suggested and demanded from Congress to ramp up the federal relief spending program. According to Powell, the government should aid the states and provide more unemployment benefits along with the public health measures to keep the economy afloat.

Economic Events to Watch Today

  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.11766 after placing a high of 1.12541 and a low of 1.11679. Overall the movement of EUR/USD remained bearish throughout the day. On Friday, the EUR/USD pair extended its losses and followed its previous day’s bearish trend for the 4th consecutive day and posted losses for the second consecutive week. The pair’s prices moved to 13th day lowest level on the back of risk-off market sentiment after the increased fears of the second wave of coronavirus and intensified US-China tussles.

The risk-off market sentiment was caused by the rising fears of renewed lockdown restrictions throughout the world after several reported infectious cases continuously increased. As well as, the US-China conflicts showed signs of cooling down and weighed on risk sentiment, which ultimately dragged the EUR/USD pair downward.

Meanwhile, E.U. leaders held a virtual summit via video conference on Friday to discuss and finalize the coronavirus recovery plan. However, the video summit failed to strike a compromise on the proposed rescue fund, and the decision remained pending until the next budgetary talks in July.

The European Commission President, Ursula von der Leyen, said that member states had severe differences on many items but agreed on the desire to strike a deal ASAP. This weighed severely on the single currency Euro; hence, the pair EUR/USD moved downward.

Friday’s summit was just the starting point for the talks on European Commission’s $2 trillion (1.85 T euros) budget proposal. The new 750 billion euros plan was also included in the budget, which was launched to help the European economy after COVID 19 crisis. The scheme was set to provide loans of worth 250 B euros and grants to E.U. member states worth 500 B euros. A credit would finance this all that the European Commission would take from international financial markets.

Furthermore, Leyen also urged rich nations to share any future coronavirus vaccine with the poorer neighbors. She said as she launched the Brussels pandemic strategy that member states would work together to find a vaccine without competition and also suggested other world powers to do the same.

On the data front, the German Purchasing Price Index (PPI) for May was released at 11:00 GMT, which showed a decline of 0.4% against the expected decline by 0.3% and weighed on Euro. At 13:00 GMT, the Current Account Balance from the European Union showed a surplus of 14.4B in April. The weaker than expected data from the Eurozone weighed on EUR and dragged the pair EUR/USD further on the down track on Friday. On the other hand, China and E.U. top leaders are set to hold an annual summit on Monday, which will be a crucial factor to look at next week.

Daily Support and Resistance

  • R3 1.1224
  • R2 1.1211
  • R1 1.1193

Pivot Point 1.1181

  • S1 1.1163
  • S2 1.1151
  • S3 1.1133

EUR/USD– Trading Tip

The EUR/USD pair is trading with a slightly bullish bias at 1.1207, but the overall trend still seems bearish. On the hourly chart, the 50 periods EMA is likely to weigh on the EUR/USD pair and may keep it in a selling zone below 1.1209 today. The support is likely to be found around the 1.1170 level. Besides, the leading indicators are mixed; for example, the RSI is suggesting a selling bias, while the MACD is indicating a bullish bias. On the higher side, a bullish breakout of the 1.1208 level can extend bullish bias until 1.1254 level today. Let us look for buying trades over 1.1170 and selling below the same today. 

GBP/USD – Daily Analysis

The GBP/USD closed at 1.23511 after placing a high of 1.24559 and a low of 1.23439. Overall the movement of GBP/USD pair continued to be bearish throughout the day. The GBP/USD pair dropped for the 4th consecutive day on Friday and posted losses on the back of the increased risk-off market sentiment, insufficient BoE support, and rising coronavirus concerns. The Pound suffered back-to-back weekly losses as the risks of no-deal Brexit and the potential second wave of coronavirus will eventually offset the monetary stimulus of BoE.

Investors start selling British Pound on the view that the recent stimulus of Bank of England might not be sufficient to overcome the economic crisis as the number of infected cases increased day by day in an environment of potential no-deal Brexit. After an uptick in the reported coronavirus cases from the U.S. & China, the U.S. dollar gained and exerted a negative impact on GBP/USD pair on Friday. However, risks to no-deal Brexit played an essential role in the downward movement of the GBP/USD pair.

The PM Boris Johnson has repeatedly ruled out the extension to the Brexit transition period despite the coronavirus crisis. The talks between Brussels & London have been compromised due to the pandemic, and this fact cannot be denied. However, Johnson has still denied calling for an extension in the transition period. This has left only two options on the table, either strike a deal with possible compromises or go for a no-deal Brexit on December 31. Both parties have been disputing over two basis points, one is fishing access, and the other is the level playing field.

Meanwhile, at 11:00 GMT, the Retail Sales in May from Great Britain surged to 12.0% from the forecasted 6.3% and supported British Pound. The Public Sector Net Borrowing was increased to 54.5B from the expected 49.3B and weighed on British Pound that also dragged the GBP/USD pair further.

Daily Support and Resistance

  • R3 1.2378
  • R2 1.2369
  • R1 1.2357

Pivot Point 1.2348

  • S1 1.2337
  • S2 1.2327
  • S3 1.2316

GBP/USD– Trading Tip

On Monday, the GBP/USD is trading is showing a slight bullish correction to trade at 1.2409 level. However, it is holding right below 50 periods EMA which is likely to extend resistance around 1.2415 level. On the downside, the GBP/USD may find support around the value of around 1.2340, and the continuation of a selling trade can lead Sterling prices to be further lower until 1.2278 level. The MACD and RSI are holding around in a buying zone right now. Therefore, we cannot simply open a sell trade here. Let us wait for taking sell trades below 1.2348 level. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.863 after placing a high of 107.056 and a low 106.764. Overall the movement of USD/JPY remained bearish throughout the day. The USD/JPY posted losses for the 3rd consecutive day of Friday Bank of Japan kept policy steady this week after increasing stimulus in March & April. The bank also issued its April’s monetary policy meeting minutes on Friday. According to the latest minutes issued by Bank of Japan, the governor Haruhiko Kuroda said that inflation would persist well below its 2% target for years to come.

At 4:30 GMT, the National Core Consumer Price Index for the year showed that nationwide CPI, which includes oil but excludes volatile fresh food prices, fell 0.2% in May from the expected fall of 0.1% and weighed on Japanese Yen. The Core Consumer prices from Japan fell for the second straight month during May, reinforced deflation expectations. It also raised challenges for policymakers who were battling the coronavirus pandemic to revive the economy.

Decreased CPI will make the job of BoJ more complicated in respect of restoring growth and inflation during the pandemic as the nation had seen the worst economic slowdown since the war. Many board members of BoJ warned that monetary support from banks in coordination with the government was needed to prevent Japan from returning to deflation. On Friday, in its meeting of April 27, BOJ eased policy further and informed a rise in buying corporate bonds and commercial paper. BoJ also promises to buy an unlimited JCBs. Japan also lifted all coronavirus related restrictions on domestic travel on Friday as the PM Shinzo Abe called people to go for sightseen and attend events to help Japan’s economy to recover.

On the other hand, the current account balance from the U.S. showed a deficit of 104B against the expected 101B deficit and weighed on the U.S. dollar, which dragged the currency pair USD/JPY on the downside.

In his speech on Friday, Fed Chair Jerome Powell suggested and demanded from Congress to ramp up the federal relief spending program. According to Powell, the government should aid the states and provide more unemployment benefits along with the public health measures to keep the economy afloat.

Powell stressed that the economic recovery from the pandemic crisis will be challenging and that there would be no quick fix. He provided a cautionary stance over the U.S. economic outlook, which exerted a negative impact on the U.S. dollar and dragged the pair further.

Daily Support and Resistance    

  • R3 107.13
  • R2 107.05
  • R1 106.94

Pivot Point 106.85

  • S1 106.74
  • S2 106.65
  • S3 106.54

USD/JPY – Trading Tips

On Monday, the USD/JPY is trading at 106.914 level as it continues trading sideways in a wide trading range of 107.620 – 106.630. It failed to break above an immediate resistance level of 107.580. This level is working as resistance for USD/JPY, and the 50 periods EMA is also prolonging strong resistance at 107.580 zones while immediate support lingers nearby 106.600. The USDJPY bearish trend can trigger a sell-off unto the next support level of the 106.017 level today. Let’s wait for the USD/JPY to test the 107.650 level before entering a sell in the USD/JPY. 

Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 22 – COVID-19 Test Results Stored on the Blockchain; Ethereum Chasing $240

The crypto market has spent the past weekend being quite stable. Bitcoin is currently trading for $9,351, which represents a decrease of 0.08% on the day. Meanwhile, Ethereum gained 1.25% on the day, while XRP lost 0.08%.

The crypto market has spent the past weekend being quite stable. Bitcoin is currently trading for $9,351, which represents a decrease of 0.08% on the day. Meanwhile, Ethereum gained 1.25% on the day, while XRP lost 0.08%.

The crypto market has spent the past weekend being quite stable. Bitcoin is currently trading for $9,351, which represents a decrease of 0.08% on the day. Meanwhile, Ethereum gained 1.25% on the day, while XRP lost 0.08%.

Compound took the position of today’s biggest daily gainer, with gains of 14.26%. Golem lost 9.21% of its daily value, making it the biggest daily loser.

Bitcoin’s dominance level stayed at the same place since our last report, with its value currently at 65.23%. This value represents a 0.04% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization stayed at almost the same place as yesterday, with the market’s current value being $266.19 billion. This value represents a decrease of $1.78 billion when compared to the value it had yesterday.

What happened in the past 24 hours

COVID-19 testing on blockchain

Blockchain tracking platform called VeChain made a Twitter announcement on June 20, saying that its blockchain-based platform that performs medical data management has gone live, and that it will store COVID-19 testing results. The platform, called E-NewHealthLife, was deployed in and for the Mediterranean Hospital in the Republic of Cyprus.

Cyprus citizens who go to this hospital’s COVID-19 laboratory will have their medical as well as test records on the blockchain.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest crypto by market capitalization spent the weekend moving within a range, bound by the support level of $9,251 and the resistance level of $9,580. The support level was tested a couple of times over the weekend, but there was no real initiative in breaking it to the downside.


Bitcoin’s volume is slowing down and reducing while its RSI level is rising slightly (52).

Key levels to the upside          Key levels to the downside

1: $9,580                                 1: $9,251

2: $9,735                                 2: $9,120

3: $9,870                                  3: $8,980

Ethereum

Unlike Bitcoin, Ethereum wasn’t so static over the weekend. While the second-largest cryptocurrency did start the weekend slowly, the most recent volume increase and price spike show its potential to possibly approach the $240 level. However, it is unlikely that Ethereum will pass the level by itself (without the help of Bitcoin), so traders can watch what Bitcoin does and trade accordingly.


Key levels to the upside          Key levels to the downside

1: $240                                    1: $228

2: $251.4                                 2: $225.4

3: $198                                    3: $217.6

Ripple

The third-largest cryptocurrency by market cap has broken its immediate support level of $0.19 on Friday, and has maintained its position over the weekend. Even though XRP managed to gain some value in the past hours, it is still extremely unlikely that it will go above the $0.19 resistance level.


XRP’s volume is extremely low, while its RSI level increased to 48.

Key levels to the upside          Key levels to the downside

1: $0.19                                      1: $0.178

2: $0.2                                  

3: $0.205

 

Categories
Forex Course

129. Learning The Concept Of Hidden Divergence

Introduction

Introduction

Introduction

In the previous lesson, we discussed regular divergence and its types. In this lesson, we shall continue with the second type of divergence – hidden divergence. The concept of divergence in this type remains the same but differs in the indication it provides.

What is the Hidden Divergence?

In a trending market, the prices make higher highs or lower lows. In addition to that, it sets in higher lows or lower highs as well. When the market prepares to reverse, the lower low or higher high turns to equal high or equal low.  The higher lows or lower highs become the other way round. And in the new leg of the trend, if there is divergence, it is referred to as hidden divergence.

In simple terms, hidden divergence is used to indicate trend continuation in the middle of a trend or typically at the beginning of a new trend.

Types of Hidden Divergence

There are two types of Hidden divergence based on the direction it indicates:

  • Hidden Bullish Divergence
  • Hidden Bearish Divergence

Let’s understand how each of them is formed with examples as well.

Hidden Bullish Divergence

In a downtrend, the market makes lower lows and lower highs. In preparation for a reversal, it leaves a higher low instead of a lower low. Also, there could be a higher high or equal high. In this price action, if there is a lower low in the oscillator, it indicates a hidden bullish divergence. It signals that the price could continue to go north.

In the above chart of AUD/USD, we can see that the market is coming from a downtrend. Later, the market does not hold at S&R to make a new lower low but makes a higher low. Looking at the indicator, it leaves a lower low. Hence, showing divergence and indicating that the market has turned into an uptrend and will possibly continue its move up.

Hidden Bearish Divergence

In the market goes into a transition from an uptrend to a downtrend, the price which was making higher highs now starts to make lower highs. In addition, the oscillator puts in a higher high for the lower high in the price chart. Thus, showing a hidden bearish divergence. It is an indication that the market is going to continue in a downtrend.

In the above chart of AUD/USD, the market was initially coming from an uptrend making higher highs. Later, it turned directions and made a higher low instead of a higher high. But the RSI made a higher high for the same move. Thus, indicating divergence and most probable continuation of the downtrend.

[wp_quiz id=”77847″]
Categories
Forex Market Analysis

Daily F.X. Analysis, June 19 – Top Trade Setups In Forex – E.U. Economic Summit Ahead! 

A day before, the U.S. dollar was also supported by the Philly Fed Manufacturing Index, which surged to 27.5 from the expected -23.0. The C.B. Leading Index for May also supported dollar when came in as 2.8% against the .4%. Today, the eyes will remain on the Canadian economic events and E.U. economic summit. Overall, the price action will be driven by the technical levels today.

A day before, the U.S. dollar was also supported by the Philly Fed Manufacturing Index, which surged to 27.5 from the expected -23.0. The C.B. Leading Index for May also supported dollar when came in as 2.8% against the .4%. Today, the eyes will remain on the Canadian economic events and E.U. economic summit. Overall, the price action will be driven by the technical levels today.

A day before, the U.S. dollar was also supported by the Philly Fed Manufacturing Index, which surged to 27.5 from the expected -23.0. The C.B. Leading Index for May also supported dollar when came in as 2.8% against the .4%. Today, the eyes will remain on the Canadian economic events and E.U. economic summit. Overall, the price action will be driven by the technical levels today.

Economic Events to Watch Today

 

  

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12045 after placing a high of 1.12611 and a low of 1.11854. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair followed its previous day’s trend and posted losses for 3rd consecutive day on Thursday amid risk-off market sentiment and bleak economic data. The pair extended its losses and dropped to its lowest level near 1.11800 since June 3.

The bearish trend of EUR/USD was supported by the increased demand for the U.S. dollar, which made it strong across the board. U.S. dollar was higher on Thursday amid its safe-haven status, which was buoyed by the multiple factors. The safe-haven market sentiment was supported by the increased fears of coronavirus second wave after the U.S. & China reported an increased number of infection cases from some parts of their country.

The U.S. dollar was also supported by the Philly Fed Manufacturing Index, which surged to 27.5 from the expected -23.0. The C.B. Leading Index for May also supported dollar when came in as 2.8% against the .4%.

However, the losses of EUR/USD were limited after the release of Unemployment Claims from the U.S. that surged to 1.508M against the 1.3M forecasts.

From the Eurozone side, at 13:03 GMT, the Italian Trade Balance in April showed a deficit of 1.16B against the expected surplus of 4.88B. Poor than expected Trade Balance from Italy weighed heavily on the single currency Euro as the difference between expected and actual value was very large.

Despite poor than expected jobless claims, the U.S. dollar index, which measures the U.S. value against a basket of six currencies, rose to 97.4 level. Increased dollar stressed the demand for EUR/USD, and hence, pair fell for 3rd consecutive day.

Furthermore, the European Central Bank issued another trillion million euros to strengthen the economies from the coronavirus pandemic. The offer made by the Central Bank to commercial banks of its ultra-cheap three years loan was taken up by 742 banks on Thursday. Bloomberg reported that a total of 1.31 trillion euros of offers were taken by the banks, which were in line with the predicted range of 1.2T – 1.5T euros.

These loans were carrying below zero interest rates, which means ECB was paying the lenders to lend to households and business people to bolster the economic recovery from the pandemic and cushion the losses.

Daily Support and Resistance

  • R3 1.1462
  • R2 1.1408
  • R1 1.1336

Pivot Point 1.1282

  • S1 1.1211
  • S2 1.1156
  • S3 1.1085

EUR/USD– Trading Tip

On Friday, the EUR/USD pair is trading with a bearish bias, holding below the descending triangle pattern, which can lead EUR/USD prices towards 1.1164 level. On the higher side, the pair may find resistance at 1.1219 level, which is extended by the downward trendline that can be seen on the hourly timeframe. Besides, the leading indicators are mixed; for example, the RSI is suggesting a selling bias, while the MACD is indicating a bullish bias. However, the 50 EMA is in support of selling. Therefore, we can look for selling trade below 1.1219 level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.2407 after placing a high of 1.25667 and a low of 1.24014. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair dropped on Thursday and extended its losses for 3rd consecutive day on the back of dovish commentary from BoE and Brexit uncertainties.

On Thursday, the BOE held its monetary policy meeting in which it left the rates unchanged at 0.10% but increased the Quantitative Easing package by100 Billion Pounds. Bank of England dropped its expectations for the U.K.’s economic contraction for Q1 and Q2. In its previous meeting, the Bank of England anticipated that the economy would shrink by 27% in Q1 and Q2. But in the latest meeting on Thursday, BoE issued its expectation for GDP to contract by 20% in the first half of 2020.

The Governor of BoE, Andrew Bailey, said on Thursday that Britain’s economy was recovering a bit faster than Bank thought in the previous month. It could be due to decreased lockdown measures; however, the labor market was mostly providing negative data.

Bailey told reporters that BoE announced an increase of 100 billion pounds around $124 billion in its bond-buying program, but it also slowed the pace of purchases. He added that BoE had plans to stretch its 745 billion pounds bond-buying program. Bailey repeated his previous comments on negative interest rates that they were an option for the Bank as the issue was complex, but given the situation, when banks could afford bond-buying and another stimulus, taking borrowing cost below zero was not going to happen.

The Bank of England also said that it would take further necessary actions to support the economy and boost inflation towards its 2% target.

On Brexit front, the European Union’s Chief executive, Ursula von der Leyen, said on late Wednesday that there would be no post-Brexit trade deal without a level playing field, including everything from state aid to labor to environmental interests. She said that the Bloc would do everything to secure a deal by the end of 2020, but it will not compromise its core values.

Daily Support and Resistance

  • R3 1.2695
  • R2 1.2632
  • R1 1.2529

Pivot Point 1.2465

  • S1 1.2362
  • S2 1.2298
  • S3 1.2195

GBP/USD– Trading Tip

On Friday, the GBP/USD is trading at a level of 1.2430, holding right below support to become a resistance level of 1.2480. The pair is in the oversold zone now, and we may see a slight bullish correction until 1.2465 and 1.2485. But below this, the odds of selling will remain high, and it can lead Sterling lower towards the next support area of 1.2350 level. The RSI and 50 periods of EMA are suggesting a selling bias today. Let’s consider taking selling trades below 1.2450 today.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.969 after placing a high of 107.127 and a low of 106.655. Overall the movement of USD/JPY pair remained flat but slight bearish throughout the day. The USD/JPY painted a fresh three day low at 106.65 after a short-lived rise toward 107.1 in the beginning session. Japanese Ye was amongst the best performer currencies on Thursday on the back of lower U.S. yields and mixed sentiment.

The U.S. dollar data showed mixed results as jobless claims exceeded the expectations and weighed on the U.S. dollar, but the Philly Fed Manufacturing Index jumped and supported the U.S. dollar.

At 17:30 GMT, the Philly Fed Manufacturing Index for June reported as 27.5 against -23.0. The Unemployment Claims for last week were reported as 1.508M against the expected 1.3M. At 19:00 GMT, the C.B. Leading Index for May surged to 2.8% against the expected 2.4% and supported the U.S. dollar. The U.S. Dollar Index (DXY) surged above 97.44 level and posted weekly high. While U.S. stocks posted losses where Dow Jones was down by 0.15%, and S&P 500 was down by 0.27%.

An FOMC member Loretta Mester gave a speech on Thursday where she said that Fed and Fed longer than expected the road to economic recovery would have to provide additional and continuous support by being very easy on the monetary policy till 2023. The dovish comments exerted downside pressure on the U.S. dollar and ultimately to USD/JPY pair on Thursday.

Some reports suggested Beijing has succeeded in containing the virus after the renewed cases emerged due to ease of lockdown restrictions. Apart from Beijing, many states of America and other countries also send reports about rebuilt virus cases.

The hopes for V shape recovery for the global economy also faded away as the development of the vaccine was needed for that which only can increase the confidence of people against the virus spread.

However, the increased tensions between China & India and North & South Korea on their disputed borders also kept the USD/JPY pair under pressure.

Daily Support and Resistance    

  • R3 108
  • R2 107.82
  • R1 107.57

Pivot Point 107.39

  • S1 107.14
  • S2 106.96
  • S3 106.71

USD/JPY – Trading Tips

The USD/JPY is trading at 106.914 level as it continues trading sideways in a wide trading range of 107.620 – 106.630. It failed to break above an immediate resistance level of 107.580. This level is working as resistance for USD/JPY, and the 50 periods EMA is also prolonging strong resistance at 107.580 zones while immediate support lingers nearby 106.600. The USDJPY bearish trend can trigger a sell-off unto the next support level of the 106.017 level today. Let’s wait for the USD/JPY to test the 107.650 level before entering a sell in the USD/JPY. 

Good luck! 

Categories
Forex Price Action

Chart Combination Trading: Even an Inside Bar Has a Lot to Offer

An Inside Bar is considered the weakest reversal candle as far as candlestick trading is concerned. However, in today’s article, we find out the significance of a daily Inside Bar in the daily-H4 chart combination trading. Let us get started.

An Inside Bar is considered the weakest reversal candle as far as candlestick trading is concerned. However, in today’s article, we find out the significance of a daily Inside Bar in the daily-H4 chart combination trading. Let us get started.

An Inside Bar is considered the weakest reversal candle as far as candlestick trading is concerned. However, in today’s article, we find out the significance of a daily Inside Bar in the daily-H4 chart combination trading. Let us get started.

This is the daily chart. The chart shows that the last candle comes out as a bearish Inside Bar. The daily chart traders may still think that the chart is bullish biased. However, the daily-H4 chart combination traders are to flip over to the H4 chart and look for short entries since it is a bearish reversal candle after all.

The H4 chart looks to be tailor-made for the sellers. The chart produces a double top, and the price breaches the neckline. The last candle comes out as a doji candle. The price may consolidate now.

The chart produces another bearish candle closing within the same resistance. Then, it creates a bullish engulfing candle. Let us draw two lines here. The level of support looks very evident. However, the level of resistance still has a lot to prove.

The level of resistance produces a bearish reversal candle. To be precise, it creates a bearish engulfing candle, closing below the level of resistance. The sellers may trigger entry right after the last candle closes by setting stop-loss above the level of resistance and by setting take profit with 1R.

The price heads towards the South in the next candle as well. It seems that the sellers may not have to wait too long to achieve their target. Let us proceed to the following chart to find out how it goes.

As expected, the next candle comes out as another bearish candle. This time it has even a longer body. Look at the last candle. The candle comes out as a bullish inside bar. Technically, the chart is still bearish biased. Do not forget that for the H4-H1 chart combination trading, they may have to flip over to the H1 chart to go long in the pair. This is what we have just demonstrated in the daily-H4 chart combination trading.

To sum up the lesson, an Inside Bar may not be a strong reversal signal in the chart. For the chart combination traders, it is a bit different. As long as it is a reversal candle does not matter how weak it is. The combination traders may flip over to the counterpart and wait for consolidation and a signal candle to trigger entry.

Categories
Forex Basic Strategies

Restrict Your Losses To Only 10-Pips a Day With This Strategy

Introduction

Introduction

Introduction

Every trader loves the idea of winning on each trade they take. After all, winning is the sole purpose of trading. Various strategies in the market promise to offer profits every day, but none of them are good enough to make you win every single trade you take. In the end, almost all of the traders wish for a method that could reap them good profit every day. But as we all know, trading is less about making money and more about saving your capital. For this same purpose, we have created the 10 Pip Loss Strategy.

The strategy suggests that we must take two to three trades a day by placing only ten pips stop-loss and go for bigger targets. For instance, let’s consider that we took three trades in a single day. If we lose two trades and end up winning one, we will be losing only 20 pips, but the gains that are earned on the third trade can be more. By following this strategy, our primary focus should be on taking three potential trades in a day.

The Strategy – Pairing Double Moving Average & Stochastic Indicator

It is highly advisable to use this strategy in a strong trending market.

To Go Long (Buy Trades)

  • Firstly, identify an uptrend in any currency pair.
  • Apply the double moving average indicator to the price chart. Go with 9 and 14 periods.
  • Wait for the pullback to happen, and the price action must hold below the double moving average.
  • Look if the Stochastic is reversing at the oversold area.
  • Go long if all the above rules are met.
  • Place the stop-loss just ten pips below the entry. Take profit placement depends on the market state. If the buyer movement is strong, expect a brand new higher high; if the momentum is a slow, exit at the most recent higher high.

The image below represents our losing trade in the AUD/CHF forex pair. As you can see, both the indicators gave us a trading signal at around 08:45 AM. We activated our trade when the price of the asset is 0.6129. It went a bit up and suddenly dropped down to hit our stop loss. As a result, we ended up losing the trade.

The best thing is that we lost only ten pips. Hence, these smaller losses won’t influence our decision-making abilities.

The image below represents our winning trade in the AUD/NZD Forex pair. We took this trade on 22nd April at around 08:45 AM. When the moving average went below the price, the Stochastic gave a reversal at the oversold area, indicating us to go long in this pair. Right after we went long, the price action blasted to the north and printed a brand new higher high. We end up making 90 pips in this trade.

Overall, we lost ten pips till now, and hence we stand at 80 pips profit.

The below price chart represents our third trade on 22nd April. We took this trade at around 6:45 PM. Following our strategy, we made entry, and the price action has printed a brand new higher high. This trade gave us a profit of 80 pips.

To sum it up, we took three trades out of which we made 170+ pips profit and a loss of only ten pips. By following this strategy, we can make profits on every single trading day. Note: Use this strategy only when you see the potential of having at least three trades in a single day. Otherwise, there is no point in using this strategy.

To Go Short (Sell Trades)

  1. Firstly, identify a downtrend in any currency pair.
  2. Apply the double moving average indicator to the price chart. Go with 9 and 14 periods.
  3. Wait for the pullback to happen, and the price action must hold above the double moving average.
  4. Look if the Stochastic is reversing at the overbought area.
  5. Go short if all the above rules are met.
  6. Place the stop-loss just ten pips above the entry. Take profit placement depends on the market state. If the seller movement is strong, expect a brand new lower low; if the momentum is a slow, exit at the most recent lower low.

The image below represents a sell signal in the CHF/JPY Forex pair. This is the first trade we activated on 13th April at around 08:45 AM. Overall, the market was in a strong downtrend, and when it pulled back, both the indicators gave us a sell signal. After we went short, the price sharply goes down and prints a brand new lower low. This trade gave us 60+ pip profit.

We took the second trade relatively at the same time in the USD/JPY Forex pair. Overall, this pair was also in a strong downtrend, and we activated the trade when both the indicators gave us a sell signal. In this pair, the seller momentum was strong enough, and we ended up making 82+ pips. 

This is the third trade we took in the EUR/JPY Forex pair. When price action pulled back to the moving average, the Stochastic also gave us a reversal at the overbought area, indicating us to go short. By the time we have exited, we booked 64+ pips of profit.

In total, we took three trades, and all of them hit our take-profit. If you observe, even if we would have lost two trades and won only one, we would still have ended up on the winning side. In a strong trending market, it is easy to win all the trades we take. All you need to do is to follow the rules of the strategy very well. To sum it up, with minimum risk, we gained a profit of 206 pips from the market.

We hope you understood the strategy well. Please try and trade this strategy in a demo account before applying it to the live market. Cheers!

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 19 – Bitcoin Mid-Term Bullish vs. Bearish Outlook – Explained

The crypto market has spent the past 24 hours being on a slow downward-facing path. Bitcoin is currently trading for $9,336, which represents a decrease of 0.69% on the day. Meanwhile, Ethereum lost 1.46% on the day, while XRP lost 1.37%.

The crypto market has spent the past 24 hours being on a slow downward-facing path. Bitcoin is currently trading for $9,336, which represents a decrease of 0.69% on the day. Meanwhile, Ethereum lost 1.46% on the day, while XRP lost 1.37%.

The crypto market has spent the past 24 hours being on a slow downward-facing path. Bitcoin is currently trading for $9,336, which represents a decrease of 0.69% on the day. Meanwhile, Ethereum lost 1.46% on the day, while XRP lost 1.37%.

Aave took the position of today’s biggest daily gainer, with gains of 26.09%. SwissBorg lost 16.61% of its daily value, making it the biggest daily loser.

Bitcoin’s dominance level stayed at the same place since our last report, with its value currently at 65.27%. This value represents a 0.01% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization stayed at almost the same place as yesterday, with the market’s current value being $266.19 billion. This value represents a decrease of $1.78 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Russia lifting ban on Telegram

After many years of unsuccessful efforts to ban Telegram in Russia, the local authorities have finally decided to fully cancel the ban. Russia’s Federal Service for Supervision of Communications, IT, and Mass Media, better-known as Roskomnadzor, has lifted the two-year-long ban imposed on Telegram.

The authority has removed requirements that restrict the access to the Telegram messenger in an agreement with the Prosecutor General of Russia.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest crypto by market capitalization spent the past 24 hours slowly moving towards the downside, ultimately testing its support level of $9,251. The bullish trend that Bitcoin was in (on the 1-day chart) was broken to the downside with the most recent Bitcoin drop. In order for BTC movements to still be considered bullish in the long run, its price needs to be above 9,120 on June 30. On the other hand, even though the outlook is not exactly bullish at the moment, Bitcoin seems to have some good support in its $9,251 level as well as the 1-day 50-period moving average.


If, on the other hand, Bitcoin makes a higher high at above $10,500, bull run will be almost certain, and people should consider pulling more of their portfolio into crypto.

Key levels to the upside          Key levels to the downside

1: $9,580                                 1: $9,251

2: $9,735                                 2: $9,120

3: $9,870                                  3: $8,980

Ethereum

Ethereum keeps creating lower highs and slowly moving lower throughout the day. The second-largest cryptocurrency by market cap is on its way to test the $228 once again. As this support level is a new one, it might not hold as well, and the price is likely to fall towards $225.4 level.


Ethereum’s long-term outlook will greatly depend on how Bitcoin moves, so there is no reason to discuss it at the moment.

Key levels to the upside          Key levels to the downside

1: $240                                    1: $228

2: $251.4                                 2: $225.4

3: $198                                    3: $217.6

Ripple

XRP has also spent the day slowly moving to the downside, but with one major difference. The third-largest cryptocurrency by market cap has, unlike Bitcoin and Ethereum, broken its immediate support level. While the $0.19 support level isn’t completely beaten and there is still time for the price to recover, it is likely that the price will remain below it due to the lack of volume and initiative when it comes to either buying or selling XRP at the moment.


Key levels to the upside          Key levels to the downside

1: $0.2                                      1: $0.19

2: $0.205                                  2: $0.178

3: $0.214

 

Categories
Forex Course

128. Interpreting Regular Divergence

What is Regular Divergence?

What is Regular Divergence?

What is Regular Divergence?

Markets move in trend, channels, and ranges. For any market to undergo a change in the direction, it must happen as a transition. For example, a market that has to transit from an uptrend to a downtrend, it has to go from an uptrend to a channel, to a range, and then begin the downtrend. That is, at one point in time, the market does not hold at support & resistance, and stops making higher highs. And this market reversal is indicated by the regular divergence.

Types of Regular Divergence

There are two types of regular divergence:

  • Regular Bullish Divergence
  • Regular Bearish Divergence

Let’s understand each of them with the help of live charts

Regular Bullish Divergence

This type of divergence is used to give a bullish signal in the market. When the market is in a downtrend, making lower lows and lower highs, the oscillator follows the same path. At one point, the price chat makes a lower low, but the oscillator makes a lower high. The oscillator does the opposite of what the price did. And this referred to as bullish divergence. Here is an example of the same.

In the above chart of EUR/AUD, reading the market from the left, we see that it was in a downtrend. As the prices were making lower lows, the indicator followed the same. But later, when it made another lower low, the MACD made a higher low, indicating divergence in the market. When it left higher low, we see that the price did not make any lower low from the S&R level. And finally, the market reversed and began to move north.

Regular Bearish Divergence

Regular bearish divergence is used to forecast bearishness in the market. In an uptrend, the market makes higher highs and higher lows. The oscillator indicators follow the same trajectory as well. But, if the price makes a higher high and oscillator does the opposite (lower high), then it is referred to as a bearish divergence. It is an indication that something is not right with the uptrend, and there are possibilities of a trend reversal.

In the above chart of AUD/CAD, we see that the market made a higher high, and the MACD indicator made a higher high as well, indicating that the uptrend is still intact. But the second time when the market made a higher high, the indicator put a lower high—indicating that there is something wrong with the uptrend and could be a possible reversal. In hindsight, we infer that the market failed to make higher highs and then reversed.

Note that divergence provides an indication that there could be a possible reversal in the market. It does not give a signal to buy or sell. The reversal must be solely based on your strategy. Divergence is only used to confirm the strategy and increase odds in your favor.

[wp_quiz id=”77668″]
Categories
Crypto Market Analysis

Daily Crypto Review, Jun 18 – Binance Pool the Biggest Miner of Craig Wright’s Bitcoin SV – What’s Actually Happening?

The crypto market has spent the past 24 hours testing its support levels after failing to break the resistance levels during yesterday’s price increase. Bitcoin is currently trading for $9,412, which represents a decrease of 0.62% on the day. Meanwhile, Ethereum lost 0.71% on the day, while XRP lost 1.37%.

The crypto market has spent the past 24 hours testing its support levels after failing to break the resistance levels during yesterday’s price increase. Bitcoin is currently trading for $9,412, which represents a decrease of 0.62% on the day. Meanwhile, Ethereum lost 0.71% on the day, while XRP lost 1.37%.

The crypto market has spent the past 24 hours testing its support levels after failing to break the resistance levels during yesterday’s price increase. Bitcoin is currently trading for $9,412, which represents a decrease of 0.62% on the day. Meanwhile, Ethereum lost 0.71% on the day, while XRP lost 1.37%.

SwissBorg took the position of today’s biggest daily gainer, with gains of 31.95%. DigiByte lost 7.95% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance stayed at the same place since our last report, with its value currently at 65.28%. This value represents a 0.04% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization stayed at the same place as yesterday, with the market’s current value being $267.97 billion. This value represents a decrease of $0.02 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Binance Pool mining the most Bitcoin SV – Why?

Only a year after removing Bitcoin SV from its exchange, news came out that Binance (through its Binance Pool) produces more Bitcoin SV blocks through mining than any other pool. Many people would jump to the conclusion that Binance knows something we don’t, but that really isn’t the case.

Even though Binance Pool is undoubtedly the largest miner of Bitcoin Satoshi’s Vision blocks at the moment (with 26.39% of total Bitcoin SV mining on June 17), it is not Binance who is mining them, but rather the users of the Pool. However, Binance is profiting from the mining operations by imposing a 2.5% pool fee. That being said, it is highly unlikely that Binance will return Bitcoin SV to its exchange, or that its stance on the controversial coin changed.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization spent the past 24 hours testing its support levels, right after failing to break the $9,580 resistance. While the $9,251 level showed strength, bouncing the price back immediately, Bitcoin is still moving down slightly. If nothing changes in terms of volume and market sentiment in general, Bitcoin might have another go at testing this support level.


Bitcoin’s volume has decreased slightly when compared to the previous days, while its RSI level is at 50.

Key levels to the upside          Key levels to the downside

1: $9,580                                 1: $9,251

2: $9,735                                 2: $9,120

3: $9,870                                  3: $8,980

Ethereum

Ethereum made the same move as Bitcoin and had no initiative when it came to a non-correlated movement today. After failing to reach its resistance level of $240, ETH started moving towards the downside. It, however, got stopped by the (possibly) new support level of $228, bouncing the price slightly up towards $235. The price stopped after reaching $235 and started moving sideways, possibly threatening the downside once again.


Key levels to the upside          Key levels to the downside

1: $240                                    1: $228

2: $251.4                                 2: $225.4

3: $198                                    3: $217.6

Ripple

XRP had a slightly different movement when compared to BTC and ETH, but with the same sentiment. The third-largest cryptocurrency by market cap failed to reach $0.2 successfully, therefore making the possibility of breaking the resistance almost none-existent in the short-term. This triggered the bears to test the support level of $0.19, which (after some fighting) managed to hold its position. XRP is now trading just above the support line, preparing for the next move.


Key levels to the upside          Key levels to the downside

1: $0.2                                      1: $0.19

2: $0.205                                  2: $0.178

3: $0.214

 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 18 – Top Trade Setups In Forex – BOE Rate Decision In Focus!

Let’s keep an eye on the U.K. Monitory Policy meeting, especially on the MPC members voting for the Asset Purchase facility. Overall, the bank isn’t expected to change it’s interest rate today. Besides, the U.S. Jobless Claims and Manufacturing Index will remain in focus.

Let’s keep an eye on the U.K. Monitory Policy meeting, especially on the MPC members voting for the Asset Purchase facility. Overall, the bank isn’t expected to change it’s interest rate today. Besides, the U.S. Jobless Claims and Manufacturing Index will remain in focus.

Let’s keep an eye on the U.K. Monitory Policy meeting, especially on the MPC members voting for the Asset Purchase facility. Overall, the bank isn’t expected to change it’s interest rate today. Besides, the U.S. Jobless Claims and Manufacturing Index will remain in focus.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.12425 after placing a high of 1.12938 and a low of 1.12068. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair extended its losses for the second consecutive day on Wednesday on the back of the risk-off market sentiment.

The escalating geopolitical tensions in the disputed border between India & China and North Korea and South Kore weighed on the risk-on market sentiment on Wednesday. The risk-off market sentiment was then bolstered by the fears of a fresh second wave of coronavirus after an increased number of infection cases from Beijing and some states of the United States.

To stop the virus from further spread and second wave to emerge, China ordered to impose strict restrictions in 29 communities of Beijing on Wednesday, and hence, risk sentiment dropped. Riskier currency Euro suffered and moved in a downward direction.

Meanwhile, the European Commission presented a “European Strategy” to accelerate the development, manufacturing, and deployment of vaccines against COVID-19. According to the European Commission, the pandemic’s permanent solution was an effective and safe vaccine development.

The announced European Strategy proposed a joint E.U. approach and was built on the mandate received from E.U. health ministers. The latest strategy gave some support to the falling Euro currency and kept a lid on any additional losses.

On the other hand, the chief of Eurogroup meeting, Mario Centeno on Wednesday, said that his decision to step down from his post had no specific political reason but was simply the end of the cycle. He claimed that his tenure was due to the period, and he just did not apply for a second chance. E.U. leaders are due to meet later this week to discuss the trillion-euro fund that will finance the European coronavirus recovery plan.

On the data front, the Consumer price index (CPI) for the year remained in line with the expectations of 0.1%, and the Final Core CPI from the Eurozone also came as expected 0.9% and had a null effect on Euro currency.

On the U.S. front, the Building permits remained flat with the expectations of 1.22M however, the Housing Starts in May were recorded as 0.97 M against the expected 1.1M and weighed on the U.S. dollar.

In his second testimony of Federal Reserve Chairman Jerome Powell, he stressed that Fed would use all of its tools to curb the damage caused by coronavirus pandemic. He also showed that no hike in interest rate was any near in the future. This decision helped the U.S. dollar to find demand in the market, and hence, the EUR/USD pair suffered more on the day.

Daily Support and Resistance

  • R3 1.1462
  • R2 1.1408
  • R1 1.1336

Pivot Point 1.1282

  • S1 1.1211
  • S2 1.1156
  • S3 1.1085

EUR/USD– Trading Tip

The EUR/USD pair is testing the double bottom support level at 1.1210 level in the 4-hour timeframe, and now it’s bouncing off towards 1.12730 level. Continuation of a bullish trend can extend bullish bias until the next resistance level of 1.1340. Elsewhere, a bearish breakout of 1.1210 can trigger selling until 1.1170. Let’s look for selling below 1.1298 and buying above the same level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at1.25548 after placing a high of 1.25885 and a low of 1.25106. Overall the movement of GBP/USD remained bearish throughout the day. The pair GBP/USD posted losses for the second consecutive day on Wednesday amid the sudden pick up in the U.S. dollar demand.

The greenback’s relative safe-haven status was continuously benefitted by the growing fears of the second wave of coronavirus and geopolitical tensions in Asia. However, the bearish trend for the GBP/USD pair remained under stress due to the latest optimism related to the Brexit progress.

The market expectations of no-deal Brexit have faded away after the U.K. & E.U. agreed to intensify post –Brexit talks. Besides, UK PM Boris Johnson said that the end of July could reach an outline of a deal. This helped to limit the additional losses in the GBP/USD pair.

Investors are keenly awaiting the update from Bank of England, which will hold its monetary policy meeting on Thursday. Although the moves from BoE in upcoming monetary policy meeting are highly anticipated, market participants still await the monetary policy update.

On the data front, the CPI from the U.K. at 11:00 GMT was released, which showed that during May, CPI remained as expected to be 0.5%. The Core CPI from the U.K. dropped to 1.2% from the expected 1.3% and weighed n GBP.

The P.I. Input for May also dropped to 0.3% against the expected 4.1% and weighed on British Pound. The PPI Output for May reached -0.3% from the anticipated 0.0% and weighed on British Pound. At 11:02 GMT, the RPI for the year in May decreased to 1.0%from the forecasted 1.2% and weighed on GBP. Poor than expected economic data dragged the pair near 1.2500 level on Wednesday. In the meantime, risk-off market sentiment also weighed on GBP/USD risky currency pair.

Daily Support and Resistance

  • R3 1.2794
  • R2 1.2741
  • R1 1.2659

Pivot Point 1.2606

  • S1 1.2524
  • S2 1.2471
  • S3 1.2388

GBP/USD– Trading Tip

On Thursday, the GBP/USD is trading at a level of 1.2580, holding right above a next support level of 1.2550. Continuation of a bullish trend requires the cable to break above 1.2585 level first. The 50 periods EMA is weighting on Sterlin gat 1.2585 level while the RSI and MACD are holding in the bearish zone. Although they are very close to crossover into the bullish zone, so we should wait for a bullish breakout before taking a buy trades. By the way, a bullish breakout of 1.2585 level can extend to buying until the next target level of the level of 1.2685, while bearish breakout of 1.2545 level can lead Sterling to be lower towards 1.2475. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.004 after placing a high of 107.439 and a low of 106.950. Overall the movement of the USD/JPY pair remained bearish throughout the day. After moving in a consolidation phase for the previous two days, the USD/JPY pair finally found a trend to follow on Wednesday and dropped below 107.06 level. The bearish trend of USD/JPY was because of the risk-off market sentiment.

At 4:50 GMT, the Trade Balance of Japan for May showed a deficit of 0.6T against the expected 0.68T and supported the Japanese Yen. The strength of the Japanese Yen dragged the pair USD/JPY lower on Wednesday.

The downward trend was then supported by the U.S. economic docket, which released negative or flat results. At 17:30 GMT, the Building permits for May from the U.S. came flat with the expectations of 1.22M. The Housing Starts in May dropped to 0.97Mfrom the expected 1.10M and weighed on the U.S. dollar.

The decreased housing starts weighed on the U.S. dollar and dragged the USD/JPY prices further. In his second round of testimony to Congress, the Fed Chair, Jerome Powell, told the lawmakers that the U.S. economy was beginning to recover from the worst of coronavirus crisis. He added that to provide support to 25M jobless Americans with ongoing pandemic will need more help.

He said that with interest rates remain near zero for an extended period, the U.S. central bank would have to continue to buy bonds to make the longer-term borrowing cost lower. Powell also said for Congress to extend in some form the extra $600 weekly payments to the unemployed people that were the part of the relief package which was passed in March and will expire in July.

Congress has already allocated 3T USD for coronavirus related economic aid, and the U.S. central bank has also pumped trillions of dollars of credit into the economy to support the economy through the pandemic crisis.

On the other hand, the rising geopolitical tensions in Asia between India and China over their disputed border. The site left 20 Indian soldiers dead in a fistfight and an unspecific number of Chinese casualties.

Meanwhile, the tensions between North Kore and South Korea also escalated after North Korea blew up the de facto embassy of South Korea near both nation’s highly armed border on Tuesday and threatened to send troops. These geopolitical tensions faded away from the market’s risk sentiment, which weighed on USD/JPY, and the pair posted losses on Wednesday.

The risk-off market sentiment was further bolstered by the recent lockdown measures imposed in 29 communities of Beijing to control the increasing number of virus cases. Meanwhile, the Fed Chairman Jerome Powell presented a gloomy outlook for a road to recovery of the U.S. economy and faded away from the optimism of V-shaped global economic recovery, which also weighed on USD/JPY pair.

Daily Support and Resistance    

  • R3 108
  • R2 107.82
  • R1 107.57

Pivot Point 107.39

  • S1 107.14
  • S2 106.96
  • S3 106.71

USD/JPY – Trading Tips

The USD/JPY pair is trading at 106.914 level as it continues trading sideways in a wide trading range of 107.620 – 106.630. It failed to break above an immediate resistance level of 107.580. This level is working as resistance for USD/JPY, and the 50 periods EMA is also prolonging strong resistance at 107.580 zones while immediate support lingers nearby 106.600. The USDJPY bearish trend can trigger a sell-off unto the next support level of the 106.017 level today. Let’s wait for the USD/JPY to test the 107.650 level before entering a sell in the USD/JPY. 

Good luck! 

Categories
Forex Course

127. Getting started with ‘Divergence Trading’

Introduction

Introduction

Introduction

There are several types of technical traders in the forex industry. Some trade based on price action while some trade using indicators. Price action traders typically do not use any indicator, but the Divergence is an exception to it. Divergence is an indicator concept that can yield immense risk to reward if used correctly. It is a powerful tool that helps traders catch the absolute peak and trough of the market.

What is Divergence?

Generally, the meaning of Divergence is to move apart. And the meaning of trading is no different. In forex, Divergence is a scenario when the price charts do not agree with the movement of the indicator. In a sense, if the price moves in one direction, the indicator moves in the other direction.

Formation of Divergence

Divergence can be found by comparing the price action on the charts with an oscillator indicator. Typically, Divergence is formed in trending markets. That is, they occur in markets that move making higher highs and or lower lows.

Consider a market a market making higher highs and higher lows. The job of an oscillator indicator is to follow the price action. Thus, the indicator should also follow an upward trajectory. But, if the charts make higher highs and the indicator makes an equal or higher low, then we conclude that there is a divergence in the market.

Significance of Divergence

Divergence is used to signify that there is something not right in the market and the uptrend. In an uptrend, for instance, the market breaks above the recent resistance (high), makes a new high, retraces to the Support & Resistance level, and continues the same cycle. But when the market makes a higher high with Divergence, there is a high possibility that the market might not hold at the S&R level. The market could reverse or might drop slightly below the S&R and then continue the uptrend.

Indicators used to Identify Divergence

Divergences can be identified using oscillator indicators. An oscillator, going by the name, moves between two levels – overbought and oversold. Typically, a level above 70-80 is considered overbought, and a level below 20-30 indicates an oversold market.

Following are the most commonly used indicators to identify Divergence

  1. Relative Strength Index (RSI)
  2. Stochastic Indicator
  3. Moving Average Convergence Divergence (MACD)

Types of Divergence

Based on the direction of the market, there are two types of Divergence:

Regular Divergence

This is the most used type of Divergence and very easy to spot. They are found at the top or bottom of a trend and are used to give a reversal signal. Regular Divergence can again be split into two types: Bullish Divergence | Bearish Divergence.

Hidden Divergence

Hidden divergences are relatively trickier to spot. Converse to regular Divergence, hidden Divergence is used for a trend continuation indication. They are typically found in the middle of a trend. Hidden divergences, too, can be divided into two types: Hidden Bullish divergence | Hidden Bearish Divergence.

That’s about the introduction to divergences. In the next lesson, we shall elaborate on each of the divergence types.

[wp_quiz id=”77516″]
Categories
Forex Daily Topic Forex Trading Strategies

Principles of Trading Strategies

Introduction

Introduction

Introduction

A trading strategy is a systematic methodology of investment that can be applied in any financial market, for example, bonds, stocks, futures, commodities, forex, and so on. In this context, a profitable trading strategy is more than a system that provides an entry signal on the long or short side with a stop-loss and a profit target.

Big traders make money to take their investment decisions systematically, reducing their risk with the diversification of the assets that make up their portfolio.

In this educational article, we’ll present a set of elements that can be part of a trading strategy.

The Elements of a Trading Strategy

A systematic trading strategy should be tested and validated with historical data, and its execution in the real-market should be done with the same accuracy as when using paper money.

The strategy should provide a setups series that allow us to recognize where to locate the market entry and in which direction. Finally, the trading strategy should allow market positioning in the long and short sides. This positioning should require identifiable stop-loss and profit target levels.

In particular, in this article, we’ll present the use of Fibonacci, candlesticks formations, chart patterns, trend lines, and trend channels.

Fibonacci Analysis

Likely, Fibonacci retracements and extensions are the most used tools in the world of retail and institutional trading. The Fibonacci series has its origin from the mathematical problem of the rabbits’ population solved by Leonardo da Pisa “Fibonacci” in his work “Liber Abaci” published in 1202.

The sequence discovered by Fibonacci not only can be applied in the rabbits’ population growth, but this series also solves other growth problems in nature and also on the financial markets.

Fibonacci and Corrections

One application of the Fibonacci tools in financial markets is the measurement of a retracement size that an impulsive wave may experience in its corrective move.

The rationale of this strategy considers that when the initial impulsive movement ends and following the subsequent corrective move, the market will develop a second impulsive move in the same direction of the first move.

The selection of the asset is linked to the timeframe under analysis; for example, the structure developed in a weekly chart will require more time than an hourly chart formation.

The following figure illustrates two potential entry setups using the Fibonacci retracement tool. The first scenario considers a retracement of 38.2% of the first move. The second scenario will occur when the price experiences a retracement of 61.8% from the top of the first impulse. 

The stop-loss will be placed at the origin of the previous impulsive movement.

Setting Targets with Fibonacci Extensions

Prices extensions are movements that resume the progress of a previous trend. Generally, the extensions occur in the third wave, and the correction corresponding to the second wave does not move beyond the origin of the first impulsive movement. The next figure exposes the extension of a regular three-wave pattern. Consider that the wave identification does not correspond to an Elliott wave labeling.

The analytic process follows the next steps:

  1. After an impulsive move, the price action must develop a minimum retracement of the first move.
  2. The size of the swing must be multiplied by the Fibonacci ratio of 1.618.
  3. The resulting level will correspond to the price target of the third wave.

The analysis in a five-wave pattern is similar to the three-wave case. The difference in this pattern is the seek the length of an additional impulsive move.

The five-wave pattern includes three impulsive movements and two corrective moves. The following figure illustrates the Fibonacci measures of this formation.

The Phi-Ellipse

The Phi-Ellipse is a countertrend trading method based on the oscillation of price with time. Its goal is to reduce the noise of falses breakouts and increase the stability of the investment strategy. The drawing process of a Phi-Ellipse requires to identify three points, as shown in the next figure.

After identifying the points A, B, and C, in a regular three-wave pattern, there should place the Phi-Ellipse in these points. We should expect a new impulsive move as the first impulse. There are three ways to trade against the trend at the end of the Phi-Ellipse, which are:

  1. Enter in a position when the price breaks outside the perimeter of the Phi-Ellipse.
  2. Entry based on a chart pattern at the end of the Phi-Ellipse.
  3. Place an order when the price action when the price moves outside a parallel line to the median line of the Phi-Ellipse.
  4. A buy position is recommended at the end of the Phi-Ellipse when it has a descending slope, and a sell position is recommended when the Phi-Ellipse has an upward slope.

Conclusions

In this educational article, we discussed the elements that should contain a trading strategy. The application of a systematic trading strategy or a combination with a strategy across time in a diversified portfolio could help the investor reduce the risk in its investment decisions.

On the other hand, the strategy’s analysis methodology should provide entry-setups for both long and short-side positions. In this context, in this article, we presented the use of Fibonacci retracements and extensions to offer entry setups inlcuding its stop loss and profit target level. Finally, we introduced the Phi-Ellipse method, which allows the investor to reduce the risk of falses breakouts in its investment portfolio.

In the next educational article, we will review the use of candlesticks formations, chart patterns, trend lines, and trend channels.

Suggested Readings

– Fischer, R., Fischer J.; Candlesticks, Fibonacci, and Chart Patterns Trading Tools; John Wiley & Sons; 1st Edition (2003).

Categories
Forex Course

126. Trading Harmonic Patterns – Detailed Summary

Introduction 

Introduction 

Introduction 

We have discussed all the major Harmonic trading patterns in our previous course lessons. The purpose of this article is to provide a comprehensive summary so that it will easy to navigate for you. Although you have a fair idea on how to trade these patterns, it is essential to practice them over and again to master them. From our personal experience, we can say that Harmonic patterns are THE most difficult patters to trade, and there are many reasons for it.

One of the critical reasons why it is so difficult to trade these patterns is because of its lack of appearance on the price charts. That is, we hardly be able to see these Harmonic patterns forming in any of the currency pairs. Having said that, once we identify and trade them correctly, we can easily make a massive sum of profits when compared to trading other Forex patterns. Hence, as a technical Forex market analyst, you must be able to identify and trade these patterns with the utmost accuracy.

In our previous course lessons, we have mentioned detailed ways to identify these patterns on the price charts using Fibonacci levels. Each of the pattern legs needs to respect specific Fibonacci extensions and retracement levels in order to confirm their formation. So make sure to take the help of these Fib ratios for easy identification. As always, keep practicing the trading of these patterns in a demo account until you master them.

Below are the links for the course lessons related to the Harmonic Patterns.

Introduction To Harmonic Pattern – Link

Trading The AB=CD Pattern – Link | Extended Trading Strategy – Link

Trading The Crab Pattern – Link | Extended Trading Strategy – Link

Trading The Butterfly Pattern – Link | Extended Trading Strategy – Link

Trading The Bat Pattern – Link | Extended Trading Strategy – Link

Trading The Gartley Pattern – Link | Extended Trading Strategy – Link

The only thing that is crucial while trading or identifying these patterns is to be patient. As you all are aware by now, it takes a lot of time for a Harmonic pattern to form. There will be many cases where three legs of the pattern will be formed accurately, but the final leg rules won’t be met, and as a result, the entire pattern gets invalidated. Don’t be disappointed or impatient at that point. After all, trading is a game of skill and patience; the more patient you are, the better results you will see. All the best!

Categories
Forex Signals

Gold: Moving South Below the 50-Period SMA

XAUUSD had a bounce off its lows that began on Jun 15 at 13:00 the bounce re3ached the $1730 level and began to move sideways, making lower lows. The last interaction made an evening star with a large bearish candlestick. We think this is a good short setup to scalp with a target at the current 200-hour SMA for a nice and fast reward. The R/r factor is just 1 but the odds of the pair going south are very high, which makes the trade appealing. We see also that the Stochastics made a crossover to near the middle of the range, suggesting an increased bearish momentum.

XAUUSD had a bounce off its lows that began on Jun 15 at 13:00 the bounce re3ached the $1730 level and began to move sideways, making lower lows. The last interaction made an evening star with a large bearish candlestick. We think this is a good short setup to scalp with a target at the current 200-hour SMA for a nice and fast reward. The R/r factor is just 1 but the odds of the pair going south are very high, which makes the trade appealing. We see also that the Stochastics made a crossover to near the middle of the range, suggesting an increased bearish momentum.

XAUUSD had a bounce off its lows that began on Jun 15 at 13:00 the bounce re3ached the $1730 level and began to move sideways, making lower lows. The last interaction made an evening star with a large bearish candlestick. We think this is a good short setup to scalp with a target at the current 200-hour SMA for a nice and fast reward. The R/r factor is just 1 but the odds of the pair going south are very high, which makes the trade appealing. We see also that the Stochastics made a crossover to near the middle of the range, suggesting an increased bearish momentum.

Trade Setup:

Entry: 1,724.64

Stop-loss: 1,734.64

Take profit: 1,714.64

Reward/Risk: 1

Risk: 100 pips which is $1000 per XAUUSD Lot, or $10 on a micro-lot. The reward is identical as the R/r =1

 

 

 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 17 – Top Trade Setups In Forex – FED Chair Testimony In Focus! 

On the news side, the CPI figures from the U.K. and Canada will be in focus. These may impact the GBP and Canadian related pairs today. Besides, a major focus will remain on the Fed Chair Powell Testimony, while he isn’t expected to do any change with an interest rate, but the recent series of positive data can make dollar bullish.

On the news side, the CPI figures from the U.K. and Canada will be in focus. These may impact the GBP and Canadian related pairs today. Besides, a major focus will remain on the Fed Chair Powell Testimony, while he isn’t expected to do any change with an interest rate, but the recent series of positive data can make dollar bullish.

On the news side, the CPI figures from the U.K. and Canada will be in focus. These may impact the GBP and Canadian related pairs today. Besides, a major focus will remain on the Fed Chair Powell Testimony, while he isn’t expected to do any change with an interest rate, but the recent series of positive data can make dollar bullish.

Economic Events to Watch Today

 

   

EUR/USD – Daily Analysis

The EUR/USD closed at 1.12637 after placing a high of 1.13532 and a low of 1.12276. Overall the movement of the EUR/USD remained bearish throughout the day. After touching a daily high of 1.1353 during the European trading hours, the EUR/USD pair reversed its run in the second half of the day and ended its day with losses. The pair moved into a consolidation phase after dropping 100 pips on Tuesday and posted a daily low below 1.1228.

Furthermore, the rising Treasury bond yields during the American session gave strength to the U.S. dollar after the release of U.S. economic data. The Dollar Index also rose along with the Wall Street Journal. The main indexes if WSJ opened a sharp higher and made the market move higher.

From the European side, at 10:59 GMT, the German Wholesale Price Index (WPI) showed a decline of 0.6%against the expected decline of 1.0% and supported Euro. At 11:00 GMT, the German Final CPI came in line with the expectations of -0.1% in May.

At 14:00 GMT, the ZEW Economic Sentiment index also rose to 58.6 from the expected 53.4 and supported Euro. The German ZEW Economic Sentiment also surged to 63.4 from the expected 60.0. During European trading hours, EUR/USD surged above 1.1353 level due to better than expected macroeconomic data release.

Meanwhile, the U.S. economic docket released the U.S. Retail Sales data for May on Tuesday, showing that the Retail Sales in May increased by 17.7% against the expected 5.5% and supported the U.S. dollar. The stronger U.S. dollar dragged the pair EUR/USD towards its daily lows. The U.S. Dollar Index rose by 0.4% on the day near 97.01, and the 10-year U.S. Treasury bond earned around 3.7% near 0.75%.

After the release of U.S. economic data, the EUR/USD pair started to follow and then remained depressive throughout the day. Jerome Powell, the Chairman of Federal Reserve, commented on the data and said that the Sales figure showed an increase in demand. However, Powell stressed that full economic recovery was uncertain until the public had confidence that the COVID-19 pandemic had controlled.

On Wednesday, European traders will look forward to the release of the Consumer Price Index from Europe, and later in the day, Powell’s testimony will continue for the second day of the semi-annual monetary policy report.

Daily Support and Resistance

  • R3 1.1462
  • R2 1.1408
  • R1 1.1336

Pivot Point 1.1282

  • S1 1.1211
  • S2 1.1156
  • S3 1.1085

EUR/USD– Trading Tip

The EUR/USD is trading at 1.1340, having violated the double top resistance level of 1.1280 level. The extension of a bullish trend can lead the EUR/USD prices further higher until the next target level of 1.1330 level. The MACD and RSI are suggesting bullish bias in the pair, and this bullish bias can help traders to capture a quick buy trade over 1.1270 level today until the next target level of 1.1380, only if 1.1330 gets violated. While support stays at 1.1280 and below this, the next support will stay around 1.1267. 

GBP/USD – Daily Analysis

The GBP/USD closed at 1.25722 after placing a high of 1.26873 and a low of 1.25524. Overall the movement of GBP/USD pair remained bearish. The pair in its earlier trading hours on Tuesday moved higher and followed the previous day’s trend and surged to 1.26800 level on the fresh hopes about Brexit negotiations. However, the gains were changed into losses after the concerns related to the second wave of coronavirus infections rose and strengthened the safe-haven U.S. dollar against its main rivals like GBP.

The pair rose on Monday and earlier Tuesday after the optimism surrounding Brexit talks emerged. The U.K. & E.U. committed to approaching the next meeting with new energy and aimed to avoid an unorderly exit from the bloc in December. The Unemployment Rate from the U.K. supported the surge in GBP on Tuesday. The unemployment rate in the U.K. during April decreased from 4.7%of expectations to 3.9% and supported Pound.

However, the pair GBP/USD started to move in the opposite direction after the release of Claimant Count Change that was closely watched by the investors on Tuesday. In May, 528.9K jobless benefits claims made in Great Britain against the expected 405.3K that depressed the GBP and dragged the pair GB/USD with itself.

The U.S. dollar also remained stronger across the board due to multiple factors. One included the better than expected U.S. economic data release included Retail Sales. The Retail Sales in May increased to 17.7% from the expected 5.5% and supported the U.S. dollar.

The strength of the U.S. dollar further dragged the currency pair. The GBP/USD down that day. The fresh concerns about the second wave of coronavirus in China led towards the renewed emergency lockdown after the increasing number of coronavirus cases in Beijing was another reason behind the strength of the safe-haven U.S. dollar on Tuesday was 

The downfall of the GBP/USD pair could also be attributed to the political front where no news came out of the recent round of talks between PM Boris Johnson and E.U. commission.

Later in the week, the Bank of England rate decision will also release in which another massive increase in quantitative easing is expected. There are chances of some talks about negative interest rates by Governor Bailey, given the upside-down condition of the market.

Daily Support and Resistance

  • R3 1.2794
  • R2 1.2741
  • R1 1.2659

Pivot Point 1.2606

  • S1 1.2524
  • S2 1.2471
  • S3 1.2388

GBP/USD– Trading Tip

The GBP/USD is trading at a level of 1.2580, holding right above a next support level of 1.2550. Continuation of a bullish trend requires the cable to break above 1.2585 level first. The 50 periods EMA is weighting on Sterlin gat 1.2585 level while the RSI and MACD are holding in the bearish zone. Although they are very close to crossover into the bullish zone, so we should wait for a bullish breakout before taking a buy trades. By the way, a bullish breakout of 1.2585 level can extend to buying until the next target level of the level of 1.2685, while bearish breakout of 1.2545 level can lead Sterling to be lower towards 1.2475. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.314 after placing a high of 107.639 and a low of 107.210. Overall the movement of the USD/JPY pair remained flat throughout the day. The USD/JPY pair remained range bound and did not give any specific movement on Tuesday as the market mood was mixed due to mixed fundamentals.

The Bank of Japan kept its monetary policy steady on Tuesday and signaled that it had taken enough steps in support of economic growth. BoJ has stuck with its view that the economy will gradually recover from the pandemic. BoJ, in its monetary policy meeting, increased the nominal size of its lending packages for cash strapped firms to $1 trillion from about $700 billion announced last month.

The increased lending program from Japan added strength to the Japanese Yen and dragged the pair USD/JPY on Tuesday. While the Chairman of Federal Reserve Jerome Powell warned on Tuesday that the U.S. economy was facing a deep downturn with significant uncertainty about the time and strength of a recovery. He was worried that the longer the recession would last, the worse the damage would be on the job market and businesses.

Powell, in his testimony to Congress, stresses that the Fed was committed to using its all financial tools to lessen the economic damage from the coronavirus crisis. But he was concerned and said that until the public was satisfied that the virus has been contained, the chances for a full recovery were unlikely. He also warned that a downturn for a longer period could impose severe damage, especially to low-income workers who already have been hit hardest.

Daily Support and Resistance    

  • R3 108
  • R2 107.82
  • R1 107.57

Pivot Point 107.39

  • S1 107.14
  • S2 106.96
  • S3 106.71

USD/JPY – Trading Tips

On Wednesday, the USD/JPY continues to follow previously discussed technical levels. The Japanese pair is trading sideways as it failed to break above an immediate resistance level of 107.580. This level is working as resistance for USD/JPY, and the 50 periods EMA is also prolonging strong resistance at 107.580 zones while immediate support lingers nearby 106.600. The bearish trend in the USD/JPY pair can trigger a sell-off unto the next support level of the 106.017 level today. Let’s wait for the USD/JPY to test the 107.650 level before entering a sell in the USD/JPY. 

Good luck! 

Categories
Forex Price Action

Mark Significant Levels and Watch out Price Action around Them

In today’s lesson, we are going to demonstrate an example of the H4-H1 chart combination trading where the breakout takes place, but the traders have to be sensible to spot out the breakout. Let us get started.

In today’s lesson, we are going to demonstrate an example of the H4-H1 chart combination trading where the breakout takes place, but the traders have to be sensible to spot out the breakout. Let us get started.

In today’s lesson, we are going to demonstrate an example of the H4-H1 chart combination trading where the breakout takes place, but the traders have to be sensible to spot out the breakout. Let us get started.

This is an H4 chart. The chart shows that the price heads towards the North upon having its second bounce at the level of support. Look at the last candle. The candle comes out as a bullish engulfing candle since it closes well above the body of the last candle. Can you spot something out here?

The candle closes well above the level where the price had a rejection earlier. The price reacted around the same level before producing the last candle. If we draw a level by using the significant level, which has been working as the level of resistance, we see that the last candle breaches the level. This means the piercing may be considered a breakout. Let us now flip over to the H1 chart.

This is how the H1 chart looks. The chart shows that the last candle comes out as a Spinning Top. The H4-H1 buyers are to wait for the price to consolidate and to get a bullish reversal candle to go long in the pair. Let us wait and see what the price does.

The chart produces a bearish engulfing candle closing within the breakout level. Look at the last candle. The last candle came out as a long bullish engulfing candle. The buyers may get huge confidence about the earlier H4 breakout and trigger a long entry right after the last candle closes. Let us now find out how the entry goes.

The price heads towards the North with good bullish momentum. The last candle comes out as a bearish Inside Bar. This action suggests that the Bull may continue its run. It is a bearish reversal candle (the weakest one). Thus, the buyers may consider closing their entry. In the end, this comes out as an excellent trade setup.

If we concentrate on the breakout, it is to be found out by the traders. Without drawing the horizontal line, it would be difficult to found that out. Thus, mark the points that are significant and keep looking at our charts. It would help you find out breakout and make the trading decision easily. Some breakouts may not seem like a breakout without drawing lines on the chart. Thus, pick your drawing tool to mark significant levels with horizontal lines/trend lines/channels on your trading chart and watch out how the price reacts around them.

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 17 – Craig Wright Called a Thief or a Fraud by the Ex CEO of Mt. Gox

The crypto market has taken its time to consolidate throughout the day, as well as possibly test nearest resistance levels. Bitcoin is currently trading for $9,447, which represents an increase of 0.56% on the day. Meanwhile, Ethereum gained 1.6% on the day, while XRP lost 0.07%.

The crypto market has taken its time to consolidate throughout the day, as well as possibly test nearest resistance levels. Bitcoin is currently trading for $9,447, which represents an increase of 0.56% on the day. Meanwhile, Ethereum gained 1.6% on the day, while XRP lost 0.07%.

The crypto market has taken its time to consolidate throughout the day, as well as possibly test nearest resistance levels. Bitcoin is currently trading for $9,447, which represents an increase of 0.56% on the day. Meanwhile, Ethereum gained 1.6% on the day, while XRP lost 0.07%.

SwissBorg took the position of today’s biggest daily gainer, with gains of 30.87%. DigiByte lost 6.96% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance stayed at the same place since we last reported, with its value currently at 65.32%. This value represents a 0.2% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization increased over the course of the day, with the market’s current value being $267.99 billion. This value represents an increase of $2.35 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Craig Wright called a liar or a thief by Mark Karpeles

Former CEO of Mt. Gox Mark Karpeles claims that the 80,000 Bitcoin that Dr. Craig Wright lays claim to was actually stolen from the Mt. Gox exchange in March 2011. This claim isn’t just empty words, as cryptocurrency experts side with Karpeles. The Bitcoin residing at one of the addresses that Craig Wright listed among the numerous addresses he supposedly owns was stolen from Mt. Gox.

Karpeles said, “This was confirmed in 2011, and records are a part of court documents available publicly.”

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization spent the past 24 hours trying to consolidate above $9,251 as well as to test the $9,580 resistance level for a brief amount of time. The resistance was strong, and Bitcoin couldn’t break it, which continued its consolidation within a range bound by $9,251 and $9,580.


Bitcoin’s volume decreased after the recovery bull run ended, while its RSI level currently stagnates at around 51.

Key levels to the upside Key levels to the downside

1: $9,580 1: $9,251

2: $9,735 2: $9,120

3: $9,870 3: $8,980

Ethereum

Ethereum seems to have had a solid day, not only recovering from the plunge but slowly rising in price as well. However, the most recent sentiment shows that bears are testing how far they can go. Whether bears manage to drive ETH’s price down a bit or not, there’s still a long way until the $225.4 support level.


Ethereum’s volume lower and lower as the time passes, while its RSI level hovers below the value of 50.

Key levels to the upside Key levels to the downside

1: $240 1: $225.4

2: $251.4 2: $217.6

3: $198

Ripple

XRP had a decent day as well, as the price drop ended after the price hit the red descending line and bounced from it. The third-largest cryptocurrency by market cap managed to get back above $0.19 (which is, as we mentioned yesterday, a big deal for XRP) and consolidate above it. The line got tested once, without much success for the bears.


XRP’s volume is a bit below the weekly average (after excluding the volume bumps for upward and downward spikes), while its RSI level is just below 50.

Key levels to the upside Key levels to the downside

1: $0.2 1: $0.19

2: $0.205 2: $0.178

3: $0.214

 

Categories
Forex Course

125. Trading The ‘Crab’ Pattern Like A Pro

Introduction

Introduction

Introduction

Crab is the last pattern that we are going to discuss in the harmonic group. Just like other patterns, the Carb is also identified and traded using the Fibonacci levels in order to determine the precise turning points. The Crab is a reversal pattern and is composed of four legs – XA, AB, BC, and C-D. Let’s understand them in detail below.

The Four Legs Of Crab Pattern

XA – In its bullish version, the first leg forms when the price action rises sharply from the point X to point A.

AB – The AB move goes against the actual market direction and retraces between 38.2% to 61.8% of the distance covered by the XA leg.

BC – In the BC leg, the price action resumes its original direction and retraces between 38.2% to 88.6% of the distance covered by the AB leg.

CD – The CD is the final leg that confirms the formation of the Crab pattern. Place the sell order when the CD leg reaches the 161.8% Fibs extension of the AB leg.

Trading The Crab Pattern

Bullish Crab Pattern

In the below GBP/USD Forex pair, we have identified the formation of the Crab pattern. The first movement XA can be considered any random bullish move. The second leg AB was a counter-trend, and it reached the 61.8% Fib leg of the XA leg. For the third move, price action goes up, and it retraces 38.2% of the XA leg. The last leg was the CD move, which 161.8% of the AB leg. The fourth leg confirms the pattern formation on the price chart.

We activated our trade at point D with stops below point D and taking profit at point A.

Bearish Crab Pattern

The price chart below represents the formation of a bearish crab pattern on the price chart. The first leg XA was the random move, and second leg AB goes up, and it retraces at 38.2% of the XA leg. The next third leg was the BC move, and it retraces 88.6% of the AB move. The last leg CD was the decision-making move, and it closes at 161.8% of the AB leg.

The trade activation was at point D, and the stop was a bit above the trade, and to book profits, we opted out for the most recent lower low.

Conclusion

The Crab pattern rarely appears on the price chart, but when it does, it provides excellent risk to reward ratio trades. If you are new to harmonic trading, practice trading this pattern on a demo account first and only then trade on the live account. Always remember to trade the Bearish Crab pattern in an uptrend, and Bullish Crab patterns in a downtrend only. Cheers!

Categories
Forex Market Analysis

Daily F.X. Analysis, June 16 – Top Trade Setups In Forex – Eyes on U.S. Retail Sales! 

On the news front, the eyes will remain on the U.K. Jobless Claims and U.S. Retail sales data. Both of the events are expected to perform better than before, but traders are highly doubtful due to lockdown, the numbers can get worse and drive selling trends in the GBP during the European session and USD during the New York session. The yield on U.S. 10 year Treasuries jumped as traders favored risk to the safety of bonds. Furthermore, on Tuesday, Fed Chair Jerome Powell will testify before the virtual hearing of the Senate Banking Committee, and traders will look forward to it for fresh impetus.

On the news front, the eyes will remain on the U.K. Jobless Claims and U.S. Retail sales data. Both of the events are expected to perform better than before, but traders are highly doubtful due to lockdown, the numbers can get worse and drive selling trends in the GBP during the European session and USD during the New York session. The yield on U.S. 10 year Treasuries jumped as traders favored risk to the safety of bonds. Furthermore, on Tuesday, Fed Chair Jerome Powell will testify before the virtual hearing of the Senate Banking Committee, and traders will look forward to it for fresh impetus.

On the news front, the eyes will remain on the U.K. Jobless Claims and U.S. Retail sales data. Both of the events are expected to perform better than before, but traders are highly doubtful due to lockdown, the numbers can get worse and drive selling trends in the GBP during the European session and USD during the New York session. The yield on U.S. 10 year Treasuries jumped as traders favored risk to the safety of bonds. Furthermore, on Tuesday, Fed Chair Jerome Powell will testify before the virtual hearing of the Senate Banking Committee, and traders will look forward to it for fresh impetus.

Economic Events to Watch Today

 

  

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.13255 after placing a high of 1.13323and a low of 1.12263. Overall the price action of the EUR/USD remained bullish throughout the trading day, although the EUR/USD pushed lower at the end of last week. After the risk sentiment increased on Monday, the pair EUR/USD reversed its movement and started posting gains. 

In earlier sessions’ the U.S. dollar was strong, which kept a lid on EUR/USD pair’s upward movement, but in the late session, the U.S. dollar lost its pace, and the currency pair EUR/USD started to move higher. The U.S. Dollar Index, which gauges the value of the U.S. dollar against the basket of six currencies, spent most of its day in positive territory above 97.00 level but it turned negative in the second half of the day and helped EUR/USD to start posting gains.

On the data front, at 14:00 GMT, the Trade Balance from Eurozone showed a surplus of only 1.2B against the expected 20.3 B in April and weighed on Euro. From the American side, the only data from the U.S. was New York’s Empire State Manufacturing Index, which rose to -0.2 from the expected -30.0 and supported the U.S. dollar.

In the Late session on Monday, Federal Reserve announced that it would begin broad buying of corporate bonds and debts, which boosted the risk appetite in the market and perceived EUR. The air EUR/USD recovered almost all of its previous day’s losses on the back of U.S. dollar weakness after the Fed’s announcement.

According to the Fed, it would start purchasing investment-grade U.S. corporate bonds in a view to secure companies and ensure credit market liquidity due to coronavirus crisis. After this news, risk sentiment was back in the economy, and the EUR/USD pair moved higher. After the Fed announcement, the yield on U.S. 10 year Treasuries jumped as traders favored risk to the safety of bonds. Furthermore, on Tuesday, Fed Chair Jerome Powell will testify before the virtual hearing of the Senate Banking Committee, and traders will look forward to it for fresh impetus.

Daily Support and Resistance

  • R3 1.1293
  • R2 1.1275
  • R1 1.1263

Pivot Point 1.1245

  • S1 1.1233
  • S2 1.1215
  • S3 1.1203

EUR/USD– Trading Tip

The EUR/USD pair is trading at 1.1340, having violated the double top resistance level of 1.1328 level. The continuation of a bullish trend can lead the EUR/USD prices further higher until the next target level of 1.1380 level. The MACD and RSI are suggesting bullish bias in the pair, and this bullish bias can help traders to capture a quick buy trade over 1.1328 level today until the next target level of 1.1380. While support stays at 1.1328 and below this, the next support will stay around 1.1267. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.26059 after placing a high of 1.26063 and a low of 1.24539. Overall the movement of GBP/USD pair remained bullish throughout the day. The Pound jumped from session lows against the dollar on Monday as the U.K. & Brussels agreed to boost up post-Brexit talks. PM Boris Johnson gave hope that the end of next month could reach an outline of a deal.

The lack of progress in negotiations following the latest round of talks between the U.K. & European Union, PM Boris Johnson said that he would personally work with the E.U. to find common ground to break the deadlock. Britain left the European Union in January, but it is still under transition period until 2020 when it should strike a deal over its future trade, travel, security, and financial relations with Europe. Many rounds of trade talks between trade representatives from both parties failed to secure a deal, and then PM Boris Johnson decided to do it himself.

On Monday, PM Boris Johnson held talks with Brussels chief Ursula von der Leyen, and Charles Michael as the European Union finally acknowledged the rejection of the U.K. overextension of the transition period. Both parties have agreed that new momentum in the countdown period to secure a deal was required. Brussels formally accepted that the U.K. would not seek an extension to the transition period, and both parties agreed on work to conclude an agreement by the end of the year. It means both parties are hopeful that an agreement could be reached before the year-end.

The PM Boris Johnson added on Monday after his video conference with E.U. members that there was no reason not to agree to the Brexit deal’s outline by the end of July. E.U. has suggested October 31 as the latest date for a deal to reach. In the time from October to the end of the transition period in December, member states will back and ratify the deal.

The optimism about the Brexit deal gave a push to British Pound, and the pair GBP/USD surged and recovered its previous day’s losses on Monday.

On the other hand, after the announcement of the Federal Reserve to start buying corporate bonds in the secondary market to overcome the losses U.S. economy faced in the coronavirus crisis, the U.S. dollar turned weak and added in the currency pair’s gains.

Daily Support and Resistance

  • R3 1.2593
  • R2 1.2568
  • R1 1.2538

Pivot Point 1.2512

  • S1 1.2482
  • S2 1.2456
  • S3 1.2426

GBP/USD– Trading Tip

On Tuesday, the GBP/USD pair is trading with a bullish bias around 1.2650, but the recent candles seem to peak out of the upward regression channel, which may drive selling in the market. The pair is most likely to find resistance around 1.2707 level, and continuation of a selling trend below this level can lead the pair lower towards 1.2595 and 1.2550 Conversely, a bullish breakout of 1.2707 level can extend buying trend until 1.2805 level in upcoming days. 

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.353 after placing a high of 107.552 and a low of 106.583. Overall the movement of USD/JPY remained bullish throughout the day. The USD/JPY gained strength after posting losses for the previous four consecutive days. The stronger U.S. dollar and negative macroeconomic data release from Japan might have added in the strength of this pair USD/JPY.

At 9:30 GMT, the Revised Industrial Production from Japan in April was declined by 9.8% against the forecasted 9.1% and weighed on Japanese Yen and moved the pair USD/JPY in the upward direction on Friday.

The brighter market sentiment due to come back of risk appetite in the market after the possibility of renewed lockdowns increased due to increased fears over the second wave of coronavirus outbreak.

The fears of the renewed spread of virus grew after the U.S. reported more than 2 million coronavirus cases as of June 12, and the infection cases were reported from the most populous states of America. The high level of new infections was reported from California, Texas, and Florida, which raised the possibility of a new wave of COVID-19 and prompted risk aversion.

Risk appetite increased the demand for the U.S. dollar across the board as the bar for renewed restrictions of lockdown raised. Federal Reserve has already announced that the road to economic recovery will be longer than expected, which indicated more need for stimulus packaged from governments.

However, the U.S. Dollar Index was up to 97 levels on Friday, and the strength of the U.S. dollar pushed the USD/JPY pair above 107.5 level.

Another factor aiding in the U.S. dollar’s strength was better than expected macroeconomic data from the USA. At 19:00 GMT, the Prelim Consumer Sentiment from the University of Michigan (UoM) surged to 78.9 in June from the expected 75.0 and supported the U.S. dollar. The Import Prices in May also increased by 1.0% from 0.6% of forecast and supported the U.S. dollar. The Prelim UoM Inflation expectation in June was reported as 3.0%.

Daily Support and Resistance    

  • R3 107.93
  • R2 107.75
  • R1 107.54

Pivot Point 107.36

  • S1 107.15
  • S2 106.97
  • S3 106.75

USD/JPY – Trading Tips

The USD/JPY pair is trading sideways as it failed to break above an immediate resistance level of 107.500. This level is working as resistance for USD/JPY, and the 50 periods EMA is also prolonging strong resistance at 107.650 zones while immediate support lingers nearby 106.600. The bearish trend in the USD/JPY pair can trigger a sell-off unto the next support level of the 106.017 level today. Let’s wait for the USD/JPY to test the 107.650 level before entering a sell in the USD/JPY today. 

Good luck! 

Categories
Forex Fibonacci

It is Not Always the Level, It is about the Zone

In today’s lesson, we are going to demonstrate an example of a chart where the price makes a strong move from the 61.8% Fibonacci level. However, in this example, things are slightly different. We know the world is not perfect; neither is the Forex market. Today’s lesson is going to show that. Let us get started.

In today’s lesson, we are going to demonstrate an example of a chart where the price makes a strong move from the 61.8% Fibonacci level. However, in this example, things are slightly different. We know the world is not perfect; neither is the Forex market. Today’s lesson is going to show that. Let us get started.

In today’s lesson, we are going to demonstrate an example of a chart where the price makes a strong move from the 61.8% Fibonacci level. However, in this example, things are slightly different. We know the world is not perfect; neither is the Forex market. Today’s lesson is going to show that. Let us get started.

The chart shows that the price makes a strong bearish move. After that, the price may have found its support. The last candle comes out as a bearish candle with a long lower shadow. The price may make a bullish correction and, then, a bearish breakout at the lowest low of the wave to offer a short entry.

The price makes its bullish correction. Upon producing a doji candle followed by a bearish Marubozu candle, it heads towards the South. The last candle closes within the level of support, where the price gets a rejection earlier. The sellers are going to eagerly wait for a bearish breakout.

The price makes a breakout at the lowest low of the wave, consolidates, and produces a bearish reversal candle. The sellers may trigger a short entry right after the last candle closes by setting Stop Loss above consolidation resistance. We talk about Take-profit in a minute. Let us find out how the entry goes.

The price heads towards the South with extreme pressure. It seems like the Bear is in a real hurry to hit the target. It produces only one bullish candle before the last one. The last candle comes out as a bullish inside bar. Typically, it suggests that the chart is still bearish biased. We find that out whether it really is or is it time for the sellers to come out with their profit. Let us draw Fibonacci levels.

Here it is. Despite producing an inside bar, the price heads towards the North for a bullish correction. It may change the trend as well. The reason for this is the price hits 161.8%. Typically, the price makes a reversal once it hits 161.8% of an existing trend when the trend starts from 61.8%. The question is whether the price really trends from 61.8% or not? If you closely look at the chart, the price does not hit 61.8%, but it trends from well below. Nevertheless, it trends from the zone of 61.8% to 78.6%. As long as the price trends from that zone, the Fibonacci traders consider that it trends from 61.8%. This is what makes the price behave as if it trends right from the  Fibonacci level of 61.8%. When it trends from there, we know where to set our Take Profit. Yes, it is to be set at 161.8%.

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 16 – BTC Whale Count Back To Dec 2017 Levels; BTC Back Above $9,000

The crypto market has taken the day to restore its price level to the pre-drop of June 15. Bitcoin is currently trading for $9,386, which represents an increase of 1.46% on the day. Meanwhile, Ethereum lost 0.05% on the day, while XRP gained 1.85%.

The crypto market has taken the day to restore its price level to the pre-drop of June 15. Bitcoin is currently trading for $9,386, which represents an increase of 1.46% on the day. Meanwhile, Ethereum lost 0.05% on the day, while XRP gained 1.85%.

The crypto market has taken the day to restore its price level to the pre-drop of June 15. Bitcoin is currently trading for $9,386, which represents an increase of 1.46% on the day. Meanwhile, Ethereum lost 0.05% on the day, while XRP gained 1.85%.

Verge took the position of today’s biggest daily gainer, with gains of 21.03%. Flexacoin lost 13.05% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance stayed at exactly the same place since we last reported, with its value currently at 65.52%. This value represents a 0% difference when compared to yesterday’s value.

The cryptocurrency market capitalization increased over the course of the day, with the market’s current value being $265.64 billion. This value represents an increase of $11.37 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Bitcoin whales returning to pre-December 2017 pump levels

The number of investors that are holding an immense amount of Bitcoin (otherwise known as Bitcoin whales) is starting to approach the level that the crypto community hadn’t seen since the 2017 levels when Bitcoin rallied to $20,000.

According to Glassnode’s report dating June 15, we can see steady growth in the number of Bitcoin whales (traders holding over 1000 BTC) since April 2019.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization managed to return to its pre-price drop level, reaching back above $9,000. Bitcoin has skipped the $9,120 and $9,251 levels as well, currently stabilizing between $9,251 and $9,580.


Bitcoin’s volume increased during the rally but returned to the previous levels, while the RSI level increased to 50.

Key levels to the upside                    Key levels to the downside

1: $9,580                                           1: $9,120

2: $9,735                                           2: $9,251

3: $9,870                                            3: $8,980

Ethereum

Ethereum also had a correction over the day, bouncing above the $225.4 and trying to consolidate. However, the price action looks like the $225.4 level will be tested to the downside. If it stays strong, traders will have a chance to possibly enter a strong position towards the upside from there.


Ethereum’s volume increased both during the price spike as well as in general. Its RSI level is currently at 43.5.

Key levels to the upside                    Key levels to the downside

1: $240                                               1: $225.4

2: $251.4                                           2: $217.6

                                                           3: $198

Ripple

XRP moved back above the $0.19 during the day, which represents a great bullish sign for it. Unlike with Bitcoin and Ethereum, XRP doesn’t have many support levels below $0.178, and dropping below it would be extremely bearish. However, the recent price increase returned XRP’s price to pre-price drop levels.


XRP’s volume returned to average after a slight increase due to the price increase, while its RSI level came to 50.

Key levels to the upside                    Key levels to the downside

1: $0.2                                              1: $0.19

2: $0.205                                            2: $0.178

3: $0.214                                          

 

Categories
Forex Course

124. Trading The Bullish & Bearish Butterfly Pattern

Introduction

Introduction

Introduction

Bryce Gilmore and Larry Pesavento are the ones to first discovered the Butterfly pattern. It is a harmonic reversal pattern, and it is composed of four legs. The trading of this pattern is similar to the trading of Gartley and Bat patterns that we have learned in previous lessons. The Butterfly pattern helps us in identifying the end of the current move so that we can take the trade. There are both bullish and bearish Butterfly patterns, and we must be going long if we find a bullish butterfly and vice-versa.

Four legs of the Butterfly Pattern

XA – In its bearish version, the first leg of the pattern forms when the price action drops from the point X to A.

AB – The AB leg reverses its direction and retraces to 78.6% Fib level of the distance covered by XA.

BC – In the BC leg, the price action changes its direction and moves back down. It then retraces between 38.2% and 88.6% Fib levels of the distance covered by AB.

CD – This is the final leg of the pattern, and if this leg goes wrong, we can consider the pattern formed till now as invalid. The CD leg must reach between 127% and 161.8% Fib extension of the AB leg. Take the sell trade at point D.

How To Trade The Butterfly Pattern?

Bullish Butterfly Pattern

We have identified the formation of the Butterfly pattern in the USD/JPY Forex pair. The first push ‘XA’ was a random leg on the price chart. The second leg is a countertrend move, and it retraces to the 78.6% Fib level of the XA leg. For the third leg, price action goes up, and the BC leg reaches 88.6% of the AB move. Finally, the CD leg enabled the price to the 161.8% level of BC move.

Since all the legs are formed according to the instructions, we can consider this a Bullish butterfly pattern. When price action completed the last leg, we activated our buy trade in this pair. The stops are placed below the trade, and the take profit was placed at point A.

Bearish Butterfly Pattern

The chart below represents the formation of a bearish butterfly in a downtrend. The first XA bearish leg was any random move in the market. The AB leg goes countertrend, and it retraces 78.6% of the XA leg. The BC move was bearish again, and it retraces to 38.2% of the AB move. Now that the three legs are completed, all we need is to confirm the last leg to ho short in this pair. For printing the last leg, price action again goes back up, and it reached the 161.8% of the BC move.

After all these legs, price action prints a bearish butterfly pattern, and the trade activation was at point D. The first take-profit was at point C, and the second take profit was at point A. We have placed the stop-loss order below the point D. The reason for shallow stops is that if the price goes above point D, the pattern itself becomes invalid.

Conclusion

Placing stop-loss and take-profit order is subjective. If you are an aggressive trader, place your take-profit at point C and for conservative targets place the take profit at point A. For your information, trading the Butterfly is almost as same as trading the Bat pattern. The only difference is the final CD leg. It makes a 127% Fib extension of the initial XA leg in this pattern, rather than the retracement of it. Cheers!
[wp_quiz id=”77249″]
Categories
Forex Market Analysis

Daily F.X. Analysis, June 15 – Top Trade Setups In Forex – Stronger Dollar In Play! 

 On Monday, the fears of the renewed spread of virus grew after the U.S. reported more than 2 million coronavirus cases as of June 12, and the infection cases were reported from the most populous states of America. The high level of new infections was reported from California, Texas, and Florida, which raised the possibility of a new wave of COVID-19 and prompted risk aversion.

 On Monday, the fears of the renewed spread of virus grew after the U.S. reported more than 2 million coronavirus cases as of June 12, and the infection cases were reported from the most populous states of America. The high level of new infections was reported from California, Texas, and Florida, which raised the possibility of a new wave of COVID-19 and prompted risk aversion.

 On Monday, the fears of the renewed spread of virus grew after the U.S. reported more than 2 million coronavirus cases as of June 12, and the infection cases were reported from the most populous states of America. The high level of new infections was reported from California, Texas, and Florida, which raised the possibility of a new wave of COVID-19 and prompted risk aversion.

Risk appetite increased the demand for the U.S. dollar across the board as the bar for renewed restrictions of lockdown raised. Federal Reserve has already announced that the road to economic recovery will be longer than expected, which indicated more need for stimulus packaged from governments.

Economic Events to Watch Today

 

  

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.12563 after placing a high of 1.13403 and a low of 1.12124. Overall the movement of the EUR/USD pair remained bearish throughout the day. At 11:45 GMT, the French Final CPI for May came in as 0.1% against the expected 0.0% and supported Euro. At 13:00 GMT, the Italian Quarterly Unemployment Rate came in as 8.9% against the expected 8.8% and weighed on Euro. At 14:00 GMT, the Industrial Production in April was declined by 17.1% against the forecasted decline of 19.0% and weighed on Euro.

Poor than expected macroeconomic data from Eurozone weighed on shared currency Euro and dragged the pair EUR/USD to one week’s lowest level near 1.1212. On the other hand, the greenback was stronger on Friday, and the U.S. Dollar Index (DXY) jumped to 97.15 level. The strength of the U.S. dollar also added to the downfall of the EUR/USD currency pair at the ending day of the week.

From the American side, at 17:30 GMT, the Import Prices in May were surged by 1.0%, which were previously forecasted to increase by 0.6% and supported the U.S. dollar. At 19:00 GMT, the Prelim UoM Consumer Sentiment increased to 78.9 from the anticipated 75.0 in June and supported the U.S. dollar. The Prelim UoM Inflation Expectations decreased to 3.0% from previous months’ 3.2% in June and supported the U.S. dollar. After better than expected data from the American side, the pair EUR/USD was further dragged down towards its six day’s lowest level.

Furthermore, the Commissioner President of the European Union, Von der Leyen, will meet the Prime Minister of the United Kingdom, Boris Johnson, on Monday to revive the talks related to the post-Brexit deal. So far, there hasn’t been much progress on a free-trade agreement between U.K. & Brussels while there is not much time left to extend the deadline for a deal till end-2020.

However, on Thursday and Friday this week, the E.U. leaders will meet to discuss the proposed recovery fund to overcome the economic damage caused by the pandemic. All members except the Frugal Four I,e Netherland, Austria, Demark, and Sweden, support the recovery fund. All member’s acceptance is needed for the recovery fund to succeed, and any delay will be a major setback for the shared currency Euro.

Daily Support and Resistance

  • R3 1.1293
  • R2 1.1275
  • R1 1.1263

Pivot Point 1.1245

  • S1 1.1233
  • S2 1.1215
  • S3 1.1203

EUR/USD– Trading Tip

The EUR/USD pair is trading at 1.1260 level, having entered into the oversold zone. Today, we can expect bullish correction until 1.1270 and 1.1290 levels, which marks 50% and 61.8% Fibonacci retracement levels. Below these levels, the EUR/USD pair can show selling bias again as the 50 EMA can pressure the pair for selling. On the lower side, support continues to hold around 1.12250 and 1.1208.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25414 after placing a high of 1.26533 and a low of 1.24735. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair was dropped to its lowest of 8 days on Friday due to mediocre than expected economic data release and U.S. dollar strength. At the ending day of the week, British Pound dropped against the U.S. dollar after the British GDP contracted by a quarter year-on-year in April.

At 11:00 GMT, the Gross Domestic Product (GDP) in April from the United Kingdom was dropped to -20.4% from the expected -18.6% and weighed on GBP. The Manufacturing Production for April also dropped to negative 24.3% from the expectations of -15.0% and weighed on British Pound.

The Industrial Production in April was dropped to -20.3% against the forecasted -15.0% and added in the weight of British Pound. However, at 11:02 GMT, the Goods Trade Balance for April showed a deficit of 7.5B against the forecasted deficit of 11.0B and supported Pound.

At 11:03 GMT, the Construction Output in April was recorder to decline by 40.1% against the forecasted 240% decline and weighed on British Pound. However, the Index of Services was declined by 9.9% against the expected decline of 10.6%.

At 13:30 GMT, the Consumer Inflation Expectations for the United Kingdom were dropped to 2.9% for this quarter from 3.0% of the previous quarter. At 18:08 GMT, the Institute of Economic and Social Research (NIESR) Estimate for GDP in May was -17.6% against the previous months’ -10.3%. At 18:30 GMT, the C.B. Leading Index for April was dropped by 2.9% from the previous month’s 1.2%.

The poor-than-expected macroeconomic data from Great Britain exerted negative pressure on British Pound and dragged the pair to its one week’s lowest level below 1.2500 level.

Apart from negative macroeconomic data, the uncertainty surrounding Brexit also weighed on British Pound on Friday ahead of the PM Boris Johnson’s video conference with European Council President Charles Michel, European Commission President, Ursula von der Leyen and European Parliament President David Sassoli on Monday.

The lack of progress in Brexit talks with Brussels and the calls to review the policy options, including negative interest rates by BoE has also been lagging in the recovery of Pound. Ahead of the BoE meeting, it has already been confirmed on Friday that U.K.’s economy has contracted by 20.4% in April. This means that BoE will likely announce further easing in its policy next week. The current purchase plan of BOE comprises 200 Billion GBP, which is likely to extend further in the next meeting.

Furthermore, the latest round of talks with Brussels failed to deliver any significant progress in the post-Brexit trade deal, which has raised the odds for a no-deal exit from the E.U. As the transition period will expire on January 1, 2021.

On the other hand, from the American Side, the Prelim Consumer Sentiment from the University of Michigan increased in June to 78.9 from the expected 75.0 and supported the U.S. dollar. The U.S. dollar was already strong in the market, and after this release, it exerted even more pressure on the GBP/USD pair.

Daily Support and Resistance

  • R3 1.2593
  • R2 1.2568
  • R1 1.2538

Pivot Point 1.2512

  • S1 1.2482
  • S2 1.2456
  • S3 1.2426

GBP/USD– Trading Tip

The GBP/USD pair is trading with a bearish bias at a depth of 1.2470, following a downward channel extending resistance around the value of 1.2540. On the 4 hour timeframe, the Cable has entered the oversold zone as we can see the RSI and MACD both were holding below 20 and below 0 levels, respectively. On the lower side, the Cable may find initial support at a level of 1.2385 after the violation of 1.2455 level. On the higher side, the GBP/USD prices may find resistance at 1.2543 area today. Let’s consider sell positions below 1.2450 level. 

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.353 after placing a high of 107.552 and a low of 106.583. Overall the movement of USD/JPY remained bullish throughout the day. The USD/JPY gained strength after posting losses for the previous four consecutive days. The stronger U.S. dollar and negative macroeconomic data release from Japan might have added in the strength of this pair USD/JPY.

At 9:30 GMT, the Revised Industrial Production from Japan in April was declined by 9.8% against the forecasted 9.1% and weighed on Japanese Yen and moved the pair USD/JPY in the upward direction on Friday.

The brighter market sentiment due to come back of risk appetite in the market after the possibility of renewed lockdowns increased due to increased fears over the second wave of coronavirus outbreak.

The fears of the renewed spread of virus grew after the U.S. reported more than 2 million coronavirus cases as of June 12, and the infection cases were reported from the most populous states of America. The high level of new infections was reported from California, Texas, and Florida, which raised the possibility of a new wave of COVID-19 and prompted risk aversion.

Risk appetite increased the demand for the U.S. dollar across the board as the bar for renewed restrictions of lockdown raised. Federal Reserve has already announced that the road to economic recovery will be longer than expected, which indicated more need for stimulus packaged from governments.

However, the U.S. Dollar Index was up to 97 levels on Friday, and the strength of the U.S. dollar pushed the USD/JPY pair above 107.5 level.

Another factor aiding in the U.S. dollar’s strength was better than expected macroeconomic data from the USA. At 19:00 GMT, the Prelim Consumer Sentiment from the University of Michigan (UoM) surged to 78.9 in June from the expected 75.0 and supported the U.S. dollar. The Import Prices in May also increased by 1.0% from 0.6% of forecast and supported the U.S. dollar. The Prelim UoM Inflation expectation in June was reported as 3.0%.

Daily Support and Resistance    

  • R3 107.93
  • R2 107.75
  • R1 107.54

Pivot Point 107.36

  • S1 107.15
  • S2 106.97
  • S3 106.75

USD/JPY – Trading Tips

The USD/JPY pair fell sharply after violating the upward channel, which supported the pair around 107.500. For now, this level is working as resistance for USD/JPY. The 50 periods EMA is also extending strong resistance at 107.650 area while immediate support stays around 106.600. The bearish trend in the USD/JPY pair can trigger a sell-off until the next support level of the 106.017 level today. Let’s wait for the market to test the 107.650 level before entering a sell in the USD/JPY today. 

Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 15 – Bitcoin Under $9,000; What Happens Next?

The crypto market has been relatively stable over the weekend only to drop in the past couple of hours. Bitcoin fell under $9,000, which brought other cryptos’ prices down. Bitcoin is currently trading for $8,962, which represents a decrease of 4.47% on the day. Meanwhile, Ethereum lost 6.13% on the day, while XRP lost 4.34%.

The crypto market has been relatively stable over the weekend only to drop in the past couple of hours. Bitcoin fell under $9,000, which brought other cryptos’ prices down. Bitcoin is currently trading for $8,962, which represents a decrease of 4.47% on the day. Meanwhile, Ethereum lost 6.13% on the day, while XRP lost 4.34%.

The crypto market has been relatively stable over the weekend only to drop in the past couple of hours. Bitcoin fell under $9,000, which brought other cryptos’ prices down. Bitcoin is currently trading for $8,962, which represents a decrease of 4.47% on the day. Meanwhile, Ethereum lost 6.13% on the day, while XRP lost 4.34%.

Flexacoin took the position of today’s biggest daily gainer, with gains of 18.57%. Loopring lost 17.68% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance stayed at the same place since we last reported, with its value currently at 65.52%. This value represents a 0.24% difference to the upside when compared to Friday’s value.

The cryptocurrency market capitalization decreased over the course of the weekend, with the market’s current value being $254.27 billion. This value represents a decrease of $10.24 billion when compared to the value it had on Friday.

What happened in the past 24 hours

Bitcoin transaction fee average decreased by 91%

The average fee for Bitcoin transactions has dropped under the $1 mark, meaning it is back to levels previously seen only before the Bitcoin reward halving.

According to data shown by the crypto analytics website BitInfoCharts, Bitcoin transaction fees decreased by 91% from May 20 until June 14. With the fees going down from $6.65 to $0.56, we can certainly see the improvement in the tx fee department of Bitcoin.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization had a slow weekend of consolidation after the 11 June price drop. While many analysts were suggesting a bull run, Bitcoin dropped in price yet again, this time below $9,000. The move reached $8,900 before stabilizing between $9,980 and $9,120 level.


Bitcoin’s volume seems to be following a pattern of decreasing its volume from day to day until a spike happens, which brings its volume up.

Key levels to the upside                    Key levels to the downside

1: $9,120                                           1: $8,980

2: $9,251                                           2: $8,820

3: $9,580                                            3: $8,650

Ethereum

Ethereum has been pretty stable over the weekend and had low volatility as well as volume. Bitcoin’s move towards the downside dragged it down as well, pulling the price down to $217 levels. The $217.6 level held greatly, stopping the bearish move in its tracks.


Ethereum’s volume increased from almost non-existent to almost the levels of the June 11 price drop.

Key levels to the upside                    Key levels to the downside

1: $225.4                                            1: $217.6

2: $240                                              2: $198

3: $251.4                                            3: $193.6

Ripple

XRP spent the weekend performing slightly worse than the aforementioned Ethereum and Bitcoin, slowly losing value as it went towards the $0.19 level. However, the most recent price drop brought its price to $0.182 levels, where it was stopped by the long-term descending trend line.


XRP’s volume increased slightly as the bearish move occurred, while its RSI level entered the oversold territory.

Key levels to the upside                    Key levels to the downside

1: $0.19                                             1: $0.178

2: $0.2 

3: $0.205                                          

 

Categories
Forex Price Action

The Trend in a Bigger Frame is Traders’ True Friend

There is a saying in financial trading “Trend is traders’ friend.” Without any doubt, this is true. In a chart combination trading, a bigger timeframe’s trend plays an important role and helps traders a lot to go with an entry in its counterpart. Let us have a look through an example of how it works.

There is a saying in financial trading “Trend is traders’ friend.” Without any doubt, this is true. In a chart combination trading, a bigger timeframe’s trend plays an important role and helps traders a lot to go with an entry in its counterpart. Let us have a look through an example of how it works.

There is a saying in financial trading “Trend is traders’ friend.” Without any doubt, this is true. In a chart combination trading, a bigger timeframe’s trend plays an important role and helps traders a lot to go with an entry in its counterpart. Let us have a look through an example of how it works.

This is a daily chart. The chart shows that the price heads towards the North at a moderate pace. The last candle comes out as a bullish candle closing well above consolidation resistance. It means the daily traders may start eyeing to go long in the pair.  The daily-H4 combination traders may flip over to the H4 chart for the price to consolidate and produce a long signal.

This is the flipped H4 chart. The chart shows that the last candle comes out as a bullish candle with an upper shadow. The buyers are to wait for the price to consolidate now.

The price consolidates and produces a bullish candle breaching consolidation resistance. Here is a thing. The consolidation range is shallow. The consolidation range plays a significant role in determining the next move’s length. The length of consolidation here does not suggest that the next move will be a big one. The daily-H4 combination traders may trigger a long entry by setting stop loss below consolidation support and by setting take profit with 1R. Let us proceed to the next chart.

The price hits the target of 1R by the next candle. Concentrate on the last candle. The candle comes out as a bullish Marubozu candle. It suggests that the price may head towards the North further. Let us find out how far it goes.

The price heads towards the North with three more candles. This means it travels almost three times more length than the combination traders have anticipated. Can you guess what may be the reason for this?

The daily chart is in a strong bullish trend. The last daily candle breaches through consolidation resistance and makes a strong statement about its bullishness. That may have attracted the daily buyers to go long in the pair as well. This brings extra liquidity and helps the price head towards the North with extreme pressure. This happens most of the time in combination trading. If the bigger chart makes a breakout and has a solid trend, the price seems to head towards the trend’s direction at a good pace in the minor chart. The combination traders may keep this in their mind and make full use of this.

Categories
Forex Course

123. Trading The Bullish & Bearish Bat Pattern

Introduction

Introduction

Introduction

The BAT is a harmonic pattern that appears in both up and downtrend. This pattern occurs when the trend temporarily reverses its direction and before continuing on its original course. As soon as this pattern ends, the markets resume it’s original direction, giving us an opportunity to enter the trade.

The Characteristics of the BAT Pattern

X-A – In its bullish version, the first leg forms when the price rises sharply from the point X to point A.

A-B – The AB leg retraces back between the 38.2% and 50% Fibonacci levels to the distance covered by XA leg.

B-C  – For BC leg, price changes its direction again and retrace anything between the 38.2% and 88.6% of the distance covered by the AB leg.

C-D – The CD leg is the final and most important part of the pattern. If this leg goes wrong, then the pattern can be considered invalid. We can go long when the CD leg has achieved 88.6% retracement of the XA leg.

Below is how both Bearish and Bullish Harmonic Bat pattern would look like when Fib levels are applied to it.

Trading the Bullish Bat pattern

The below price chart represents the formation of a Bullish BAT pattern on the USD/CHF forex price chart.

The below image represents our entry and exit while trading the Bullish Bat pattern. At first, we can see the price action printing the XA leg on the chart. Followed by that, the counter-trend AB move has retraced to 38.2% Fib level of the XA move. The BC leg followed the trend and retraced back to 88.6% of the AB leg. The last leg was the CD leg, which reached the 88.6% Fib level of the XA move. The trade activation was at point D, and the stop-loss is placed little below the D point. To place the take-profit order, we chose point A, and we can see how that placement is respected.

Trading the Bearish Bat pattern

The image below represents the formation of a bearish bat pattern on the NZD/USD Forex price chart.

The formation of the pattern starts with the first leg at point X, and it ends at point A. The second leg AB was counter-trend, and it retraced back to 38.2% of the XA leg. The BC leg goes down, and even that retraced 38.2% of the AB leg. The last leg was the CD move, and if this leg doesn’t follow the rules, we shouldn’t consider the pattern valid. The CD leg goes up, and it retraces to 88.6% fib level. Hence, we can consider the pattern formed as valid. We have activated the trade at point D, and the stops were placed above point D. We have placed two take-profit orders – the first one was at point C, and the next one was at point A.

Conclusion

Bat is one of the most credible Harmonic patterns in the market. As the pattern ends at point D, our trade immediately resumes and often provides an excellent risk to reward ratio trades. Once you master trading the bullish pattern, the bearish one can easily be traded. The Bat is also considered one of the most reliable harmonic patterns; So whenever you identify this pattern, it is advisable to go big. Cheers!

[wp_quiz id=”77106″]
Categories
Forex Market Analysis

Daily F.X. Analysis, June 12 – Top Trade Setups In Forex – U.S. Prelim UoM Consumer Sentiment Ahead! 

On the news front, eyes will remain on the UK GDP figures, which are expected to perform worse than the previous month’s data. Alongside the U.S. Prelim UoM Consumer Sentiment figures will be in play to drive price action in gold and dollar related pairs today.

On the news front, eyes will remain on the UK GDP figures, which are expected to perform worse than the previous month’s data. Alongside the U.S. Prelim UoM Consumer Sentiment figures will be in play to drive price action in gold and dollar related pairs today.

On the news front, eyes will remain on the UK GDP figures, which are expected to perform worse than the previous month’s data. Alongside the U.S. Prelim UoM Consumer Sentiment figures will be in play to drive price action in gold and dollar related pairs today.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12974 after placing a high of 1.14035 and a low of 1.12886. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair gained traction in the early session and rose to a daily high of 1.1403 on Thursday. However, the pair EUR/USD lost its traction on the back of the risk-averse market sentiment, which boosted the demand for safe-haven U.S. dollar.

In the early trading session, the EUR/USD pair followed its previous day’s movement and rose above 1.140 level but failed to remain there in the wake of a strong U.S. dollar against Euro. Dollar Index (DXY) stayed relatively calm near 96.00 level in the first half of the day.

After the release of economic data from both sides, the EUR/USD pair started to lose its daily gains and turned the gains into losses.

On the data front, at 10:30 GMT, the French Final Private Payrolls for the quarter came in as -2.5% against the forecasted -2.3%and weighed on Euro. At 13:00 GMT, the Italian Industrial Production in April was dropped by 19.1% against the expected fall of 24.0%.

At 17:30 GMT, the Core PPI from the U.S. for May came as -0.1% the same as expected and PPI as 0.4% against the expectations of 0.1% and supported the U.S. dollar. The jobless claims for the week also dropped to 1.542M against forecasted 1.550M and supported the U.S. dollar.

Furthermore, the Eurogroup meeting was held on Thursday to discuss the distribution of 750 billion euros to member states to deal with the economic shock from the crisis. Five hundred billion euros were planned to disburse as grants and 250 billion as loans.

 Meanwhile, the finance minister of the Eurozone approved the distribution of 748 million to Greece from profits of European Central Bank that purchased Greek sovereign bonds.

Moreover, the 19 finance ministers of the euro area were looking for a new president and at the time when the region was facing tough negotiations over 750 billion euros fiscal plans to help it recover from the coronavirus.

The Eurogroup current president, Mario Centeno, resigned from the Portuguese government served as a finance minister since October 2015. However, the three names for potential candidates are Spain’s finance minister Nadia Calvino, Luxembourg’s finance Chief Pierre Gramegna and from Ireland, Paschal Donohoe.

Daily Support and Resistance

  • R3 1.1522
  • R2 1.1473
  • R1 1.1422

Pivot Point 1.1372

  • S1 1.1321
  • S2 1.1271
  • S3 1.122

EUR/USD– Trading Tip

The EUR/USD pair is trading at 1.1296 level, having entered into the oversold zone. Today, we can expect bullish correction until 1.1309 and 1.1340 levels, which mark 38.2% and 50% Fibonacci retracement levels. Below these levels, the EUR/USD pair can show selling bias again as the 50 EMA can pressure the pair for selling.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.26016 after placing a high of 1.27541 and a low of 1.25863. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair dropped on Thursday after posting gains for ten previous days on the back of strong intraday U.S. dollar buying, which dragged the pair further below towards 1.2500 level.

The risk-off market sentiment emerged after the comments of Federal Reserve on Thursday and the news that some American states were showing some signs of coronavirus cases again.

The Fed Chair Jerome Powell said that the U.S. economy was set to contract by 6.5% this year, and the unemployment rate was expected to reach 9.3%. The U.K. will release its latest GDP growth figures on Friday, which was previously estimated to show a contraction in April by 18%, followed by a 5.8% decline in March.

On Brexit front, the negotiations between the U.K. & E.U. will now intensify with weekly talks throughout July into August and in the hope of a breakthrough. The U.K. is facing a very difficult time from relatively increased COVID-19 cases and negotiations at that time are weighing even more on British Pound. The hopes of any breakthrough for post Brexit deal rely on the talks between UK PM Boris Johnson and E.C. President von der Leyden, which will hold after the E.U. Summit.

Meanwhile, some fresh bearish pressure for GBP/USD came after the Organization for Economic Co-operation and Development warned that U.K.’s economy was set to be the hardest hit amongst the world’s developed countries from coronavirus pandemic.

At the data front, the RICS House Price Balance for May from the U.K. was released at 4:01 GMT, which showed a decline of 32% against the expected decline by 24% and weighed on British Pound and dragged the GBP/USD pair.

From the American side, the Unemployment Claims for last week were reported as 1.542M against the expected 1.550M and supported the U.S. dollar, which ultimately dragged the pair GBP/USD further toward downside on Thursday.

Daily Support and Resistance

  • R3 1.2912
  • R2 1.2863
  • R1 1.2804

Pivot Point 1.2755

  • S1 1.2696
  • S2 1.2647
  • S3 1.2588

GBP/USD– Trading Tip

On Friday, the GBP/USD pair is trading with a bearish bias at 1.2570 level ever since it has violated an upward trendline support level of 1.2650. On the 4 hour timeframe, the Cable has entered the oversold zone as we can see the RSI and MACD both were holding below 20 and below 0 levels, respectively. On the lower side, the Cable may find initial support at a level of 1.2550, and below this, the next support may be found around 1.2503 level today while the bullish breakout of 38.2% Fibonacci resistance level can lead the GBP/USD pair towards 1.2650 level, which marks 61.8% Fibo level today. 

USD/JPY – Daily Analysis

 The USD/JPY was closed at 106.859 after placing a high of 107.232 and a low of 106.569. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY currency pair dropped for the 4th consecutive day on Thursday despite strong demand for the U.S. dollar due to the risk-off market sentiment after the Fed’s gloomy outlook on the U.S. economy presented in its latest monetary policy meeting.

The increasing fears of a second wave of coronavirus after the increased number of appearing cases of infected people due to easing of lockdown restrictions added in the risk-off market sentiment and currency pair’s declines on Thursday.

FOMC turned down the odds of negative interest rates and held its rates near zero at 0-0.25% on Wednesday but suggested that the recovery road would be longer for the U.S. economy as the impact of coronavirus crisis was deeper than expectations. Fed said that it would use all its tools to overcome the damage caused by a coronavirus.

The risk-off market sentiment caused the USD/JPY pair to move in a downward direction on Thursday towards the lowest level of 106.569.

On the data front, at 4:50 GMT, the BSI Manufacturing Index dropped by 52.3 against the forecasted decline by 20.5 and weighed on Japanese Yen. At 17:30 GMT, the Core PPI for May came in line with the expectations of -0.1%. The PPI for May increased to 0.4% from the expected 0.1% and supported the U.S. dollar. The Unemployment Claims from last week were reported 1.542M against the expected 1.550M and gave strength to the U.S. dollar. Despite the strength of the U.S. dollar, the USD/JPY pair moved in a downward direction and posted losses for 4th consecutive day on Thursday.

Furthermore, Moderna told Bloomberg on Thursday that the final-stage trial of its vaccine for COVID-19 will start July. Moderna was the first company to start human clinical trials of its vaccine in the U.S.

The last stage of the trial will be completed with the partnership of the U.S. National Institute of Allergy and Infectious Diseases (NIAID). The study will include 30,000 people and will provide definite clinical proof that vaccines actually prevent people from developing COVID-19.

Daily Support and Resistance    

  • R3 108.58
  • R2 108.23
  • R1 107.67

Pivot Point 107.33

  • S1 106.77
  • S2 106.43
  • S3 105.87

USD/JPY – Trading Tips

The USD/JPY pair fell sharply after violating the upward channel, which supported the pair around 107.500. For now, this level is working as resistance for USD/JPY. The 50 periods EMA is also extending strong resistance at 107.650 area while immediate support stays around 106.600. The bearish trend in the USD/JPY pair can trigger a sell-off until the next support level of the 106.017 level today. Let’s wait for the market to test the 107.650 level before entering a sell in the USD/JPY today. 

Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 12 – BTC Plunging To Two-Week Lows; Binance Launching BTC Futures Contracts

The crypto market has plunged over the course of the day, bringing the overall crypto market to a two-week low point. Bitcoin is currently trading for $9,337, which represents a decrease of 5.51% on the day. Meanwhile, Ethereum lost 6% on the day, while XRP lost 5.61%.

The crypto market has plunged over the course of the day, bringing the overall crypto market to a two-week low point. Bitcoin is currently trading for $9,337, which represents a decrease of 5.51% on the day. Meanwhile, Ethereum lost 6% on the day, while XRP lost 5.61%.

The crypto market has plunged over the course of the day, bringing the overall crypto market to a two-week low point. Bitcoin is currently trading for $9,337, which represents a decrease of 5.51% on the day. Meanwhile, Ethereum lost 6% on the day, while XRP lost 5.61%.

DigiByte took the position of today’s biggest daily gainer, with gains of 5.14%. Loopring lost 20.86% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance stayed at the same place since we last reported, with its value currently at 65.28%. This value represents a 0.6% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization decreased greatly over the course of the day, with the market’s current value being $264.51 billion. This value represents a decrease of $16.72 billion when compared to the value it had yesterday.

What happened in the past 24 hours

500 Crypto Companies in Estonia losing their permits

Estonia is one of the European Union’s most crypto-friendly countries when it comes to regulation. However, due to the $220 billion scandal regarding money laundering through crypto, Estonia started cracking down on many licensed cryptocurrency companies. So far, over 500 companies have lost their permits.

Honorable Mention

Cryptocurrency exchange powerhouse Binance has just launched a new Bitcoin futures product. The launch came through despite institutional investors visibly showing uncertainty about the future of cryptocurrencies.

In a blog post that came directly from Binance on June 11, the company revealed its quarterly futures contracts product is going live. The first contracts will have a settlement due in September.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has spent the day plunging to its two-week lows, falling as low as $9,070. The $9,251 line has, however, held up, and BTC is now consolidating above it. The downward-facing move should be over for now as RSI stepped into oversold while the volume faded.


Bitcoin’s volume increased multiple-fold over the course of the price dump but has since returned to its average levels.

Key levels to the upside                    Key levels to the downside

1: $9,580                                           1: $9,251

2: $9,735                                           2: $9,120

3: $9,870                                            3: $8,980

Ethereum

Ethereum followed Bitcoin’s initiative to move towards the downside and fell as low as $225. However, the $225.4 support line held up and stopped the move from going any further. Ethereum has recovered slightly and is now trading at a $233 level.


Ethereum’s volume increased drastically during the peak of the move but has since returned to normal. Its RSI level has entered the oversold territory but has (again) returned above it once the pressure faded.

Key levels to the upside                    Key levels to the downside

1: $240                                               1: $225.4

2: $251.4                                           2: $217.6

3: $260                                               3: $198

Ripple

XRP did not stray away from other cryptocurrencies in terms of market direction. The third-largest cryptocurrency by market cap has broken the range it was trading in for a long time as it fell below the $0.2 support level. The downward-facing move reached $0.184 before going up. XRP is still trying to find equilibrium and a place to consolidate at, and it is still uncertain whether that will be above or below the $0.19 level.


Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.178

 3: $0.214                                          

 

Categories
Forex Course

122. Harmonic Pattern Trading – Gartley Pattern

Introduction

Introduction

Introduction

The Gartley is one of the most traded harmonic patterns in the market. Just like the AB=CD pattern that we discussed in the previous course lesson, the identification and confirmation of the Gartley pattern are based on the Fibonacci levels. Technical traders use this pattern to trade the retracement and continuation that occurs when the trend temporarily reverses before continuing to move in its original direction. This pattern is also referred to as a Gartley222 because the inventor of this pattern, H.M Gartley, first described this pattern on page number 222 in his famous book ‘Profits in The Stock Market.’

Moves Involved In The Formation Of Gartley Pattern 

X-A – In the bullish version, the first leg forms when the price rises sharply from point X to point A.

A-B – The AB leg changes its direction and retraces to Fib level 61.8% of the XA leg.

B-C – In the BC leg, price action changes its direction and retraces from 38.2% to 88.6% of the distance that is covered by the AB leg.

C-D – This is the last leg of the pattern, and it reverses again to the downside. It must retrace to 78.6% of the XA leg.

Below is how the fully formed Bullish and Bearish Gartley Patterns look like:

Trading The Gartley Pattern

Bullish Gartley Pattern

The chart below represents the formation of a bullish Gartley pattern on the NZD/USD weekly chart.

In the below chart, the four swing highs and swing lows bind together to form the bullish Gartly pattern. It is crucial to validate the fibs ratios on the price chart. The first XA leg was the bullish move, and the successive AB leg was a bearish move. We can see that the AB move was close to the 61.8% level of the AB leg.

Furthermore, BC is a bullish move, and it is retracing close to the 88.6% fib level of the AB move. The last step was the CD leg, and if this one goes wrong, the whole pattern gets invalidated. However, the CD move was bearish, and it is close to the 161.8% fibs level of the BC leg. The trade activation was at point D, and we have placed the take profit order at Point A.

Bearish Gartley Pattern

The price chart below represents the formation of a bearish Gartley pattern on the EUR/USD 240 Forex pair.

We can observe that the first leg of this pattern was XA, which is a bearish move. It is followed by the reverse in trend printing the AB leg, which is close to the 61.8% extension of the XA leg. The third leg, BC move, was bearish again, and it is close to the 88.6% fibs of the AB move. The last leg is the CD move, and this leg is 161.8% fibs ratios of the BC. The activation was at Point D, and the stop-loss is placed above point D. For take-profit, we have gone for the Point A. You can also partially book your profit at point C and exit your positions at point A.

Conclusion

The confirmation of the Gartley pattern must be done using the fib ratios alone. In the beginning, it can be difficult for you to spot this pattern on the price chart, but you will eventually get used to it. Hence, in the beginning, try to identify & trade this pattern on a demo account. Once you master all the rules involved while trading this pattern, you can go ahead and trade it on the live markets. Cheers!

[wp_quiz id=”76837″]
Categories
Forex Market Analysis

Daily F.X. Analysis, June 11 – Top Trade Setups In Forex – Brace for Eurogroup Meetings!

On the news front, the market will be focusing on the Eurogroup meeting, which is usually held in Brussels and attended by the Eurogroup president, Finance Ministers from euro area member states, the Commissioner for economic and monetary affairs, and the President of the European Central Bank. The agenda will be to discuss upcoming policies considering the economic slowdown driven by the coronavirus. Besides, the U.S. Unemployment Claims will also remain in the highlights today.

On the news front, the market will be focusing on the Eurogroup meeting, which is usually held in Brussels and attended by the Eurogroup president, Finance Ministers from euro area member states, the Commissioner for economic and monetary affairs, and the President of the European Central Bank. The agenda will be to discuss upcoming policies considering the economic slowdown driven by the coronavirus. Besides, the U.S. Unemployment Claims will also remain in the highlights today.

On the news front, the market will be focusing on the Eurogroup meeting, which is usually held in Brussels and attended by the Eurogroup president, Finance Ministers from euro area member states, the Commissioner for economic and monetary affairs, and the President of the European Central Bank. The agenda will be to discuss upcoming policies considering the economic slowdown driven by the coronavirus. Besides, the U.S. Unemployment Claims will also remain in the highlights today.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.13753 after placing a high of 1.14222 and a low of 1.13214. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair rose to its three months highest level on Wednesday after the Federal Reserve’s monetary policy decision. The currency pair crossed the level of 1.1400 on the back of broad-based U.S. dollar weakness that day.

The Fed left its interest rates unchanged at 0-0.25% on Wednesday and projected a contraction of 6.5% this year along with the unemployment reaching 9.3% for this year. Furthermore, the bank has shown its commitment to support the credit flow to household and business by increasing its Treasury security purchases.

Though negative interest rate was not expected from the Fed but taking the pledge to keep the interest rates at low near zero until market participants did not expect 2022, this moved the investors to sell the U.S. dollar, which in turn gave a push to EUR/USD pair.

Adding in the upward movement of EUR/USD pair on Wednesday was the poor than expected economic data from the U.S. At 17:30GMT, both CPI & Core CPI readings from the U.S. came in as -0.1% against the expected 0.0% during May and exerted pressure on the U.S. dollar. AT 23:00 GMT, the Federal Budget Balance showed a deficit of 398.8B against the expected deficit of 580.0B and weighed on the U.S. dollar.

The broad-based U.S. dollar weakness pushed EUR/USD pair above 1.1400 level on Wednesday. While the U.S. Dollar Index also fell to 3 months low against its rival currencies. U.S. stocks also turned negative and posted losses on Wednesday.

On the other hand, at 11:45 GMT, the French Industrial Production was dropped by -20.1%against the expected -10.0% during April and weakened Euro. Furthermore, On Wednesday, the European Commission said that Russia and China were running targeted influence operations and disinformation campaigns in the European Union and its neighborhood and also around the globe.

Daily Support and Resistance

  • R3 1.1522
  • R2 1.1473
  • R1 1.1422

Pivot Point 1.1372

  • S1 1.1321
  • S2 1.1271
  • S3 1.122

EUR/USD– Trading Tip

The EUR/USD continues to trade sideways in a narrow trading range of 1.1400 – 1.1348 level, and right now, it seems to test the lower boundary of this range. On the lower side, the next target level appears to be 1.1270. Currently, the pair is facing immediate support around 1.1340 level, and closing of candles above this level may lead the EUR/USD prices to further lower towards 1.1400. The 50 EMA is also suggesting a bullish bias for the EUR/USD pair as the pair has closed a Doji candle right above the EMA. On the higher side, a violation of 1.1400 resistance can lead to EUR/USD prices until 1.1465. Odds of bullish bias remains solid today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.27457 after placing a high of 1.28130 and a low of 1.27060. Overall the movement of GBP/USD pair remained bullish throughout the day. The currency pair GBP/USD continued its bullish trend for the 10th consecutive day and maintained its bullish streak on Wednesday on the back of the latest monetary policy decision by Federal Reserve.

On Wednesday, the U.S. Fed announced its monetary policy decision in which it held its interest rates on the same level near zero and did not go for negative interest rates. However, the Fed also announced to hold the interest rates at the same level until the end of 2022. Federal Reserve also announced that over the coming months, it would increase the holdings of Treasury securities and agency residential and mortgage-backed securities at the current level to support the credit flow to households and businesses. This all was decided to sustain smooth market functioning and defend the U.S. economy.

Additionally, the Open market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will keep a close eye on market conditions to adjust its plans as needed.

The DXY fell off from 96 levels and was down by 0.5% on Wednesday, the dovish statement from Fed weighed on the U.S. dollar and hence, GBP/USD pair reached near 3-months highest level.

On the other hand, Brexit trade negotiations did not go well between the U.K. and Brussels, and the U.K. wanted to reach an agreement with the E.U. this year. There are no chances of even any progress in trade talks with the deadline to seek an extension coming closer day by day.

According to the boss of the U.K.’s most influential business group, the CBI, U.K.’s economy was not ready to withstand the additional disruption of no-deal Brexit. The furlough scheme and grants will end at once, and then thousands of businesses and millions of jobs will likely hit the water. A CBI member, Carolyn Fairbairn, said that British firms do not have the resilience to cope with leaving the European Union without any deal after the losses of the coronavirus crisis.

On Wednesday, GBP/USD prices rose above the level of 1.27710 but dropped below it and continued moving in a confined range. The surge in prices was due to the broad-based U.S. dollar weakness after the Fed’s statement and economic data release. At 17:30, The CPI & Core CPI for May from the U.S. showed a decline of 0.1% against the expected 0.0% and weighed on the U.S. dollar. The weak dollar pushed GBP/USD pair on the higher level.

Daily Support and Resistance

  • R3 1.2912
  • R2 1.2863
  • R1 1.2804

Pivot Point 1.2755

  • S1 1.2696
  • S2 1.2647
  • S3 1.2588

GBP/USD– Trading Tip

The GBP/USD pair is trading with a bearish bias at 1.2650 level ever since it has violated the upward channel on the lower side. On the 4 hour timeframe, the Cable has closed a strong bearish engulfing candle, which suggests a dominance of sellers in the market as this can trigger selling until 1.2625 level. Immediate support can be found around 1.2625, while a breakout of this can trigger more selling until the next support level of 1.2582 level. Let’s look for selling trades below 1.2690 level today. 

USD/JPY – Daily Analysis

 The USD/JPY pair was closed at 107.123 after placing a high of 107.872 and a low of 106.987. Overall the movement of the USD/JPY pair remained bearish that day. AT 4:50 GMT, the Core Machinery Orders from Japan for April dropped to -12% against the expected -7.5% and weighed on Japanese Yen. The PPI for the year from Japan was declined by 2.7% against the expected decline of 2.4% and exerted pressure on JPY.

On the other hand, at 17:30 GMT, the CPI and the Core CPI during May from the United States was dropped to -0.1% from 0.0% of expectations and weighed on the U.S. dollar. The Federal Budget Balance for April was declined by 398.8B against the expected 580.8B.

The poor than expected CPI & Budget data from the United States on Wednesday weighed on the U.S. dollar, which dragged down the USD/JPY pair with itself. Furthermore, the dovish statement from the Federal Reserve will keep its interest rates on hold at a level near zero until the end of 2022. U.S. economy was not in good condition, and the projections made by the Fed about the economic contraction this year was 6.5% and of unemployment to be raised by 9.3.

Fed reduced its interest rates in March to near zero amid coronavirus crisis and said that until the economy was back on track Federal Reserve has pledged to maintain low rates. Fed has provided trillions of dollars to its financial system, Treasury purchases to support business, state, and local governments. It also started a new program to lend to small, medium-sized firms. Wall Street, major indices such as the S&P 500 and Dow Jones Industrial Average were negative that day, and the U.S. dollar index also fell to fresh three months low against major currencies.

Daily Support and Resistance    

  • R3 108.58
  • R2 108.23
  • R1 107.67

Pivot Point 107.33

  • S1 106.77
  • S2 106.43
  • S3 105.87

USD/JPY – Trading Tips

The USD/JPY is trading sharply bearish below 107.100 level, having violated the upward trendline at 107.600. Below this, the pair has a great potential to go for a 107.08 level, while a bearish breakout of 107.082 can dip further until 106.770. On the 4 hour chart, the MACD, and RSI, both are holding in the selling zone, demonstrating that there’s further room for selling in the USD/JPY pair. Let’s consider taking selling trades below 107.33 today. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 11 – Chinese Crypto Traders’ Bank Accounts Getting Frozen; BTC Attempting To Break $10,000

The crypto market has spent the day with increased volatility as Bitcoin was trying to pass the $10,000 mark.  While the level got rejected once again, the price increase did happen. Bitcoin is currently trading for $9,941, which represents an increase of 1.69% on the day. Meanwhile, Ethereum gained 2.18% on the day, while XRP gained 0.81%.

The crypto market has spent the day with increased volatility as Bitcoin was trying to pass the $10,000 mark.  While the level got rejected once again, the price increase did happen. Bitcoin is currently trading for $9,941, which represents an increase of 1.69% on the day. Meanwhile, Ethereum gained 2.18% on the day, while XRP gained 0.81%.

The crypto market has spent the day with increased volatility as Bitcoin was trying to pass the $10,000 mark.  While the level got rejected once again, the price increase did happen. Bitcoin is currently trading for $9,941, which represents an increase of 1.69% on the day. Meanwhile, Ethereum gained 2.18% on the day, while XRP gained 0.81%.

Aave took the position of today’s biggest daily gainer, with gains of 20.26%. WAX lost 20.34% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased since we last reported, with its value currently at 65.34%. This value represents a 0.14% difference to the upside when compared to yesterday’s value.

The cryptocurrency market capitalization increased slightly over the course of the day, with the market’s current value being $281.26 billion. This value represents an increase of $3.57 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Are Chinese bank accounts getting frozen by the government?

Almost 4,000 Chinese bank accounts have reportedly been frozen by the local government due to cryptocurrency trading. According to a report published on Monday, the Chinese police force froze the bank accounts of thousands of OTC traders from the Chinese province of Guangdong.

The report stated that the authorities started freezing bank accounts on Thursday. While the law enforcement is claiming that they are freezing only accounts tied to illicit activities, retail investors saw their bank account frozen after buying cryptocurrency on credible crypto exchanges.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has spent the day preparing for a move towards the upside. The price attempted to break the $10,000 threshold several times, each time being unsuccessful. However, even though the price point got rejected, Bitcoin gained some value and managed to pass $9,870 (which is being tested at the time of writing).


If Bitcoin manages to pass $10,000, it can face resistance above the $10,300 level.

Key levels to the upside                    Key levels to the downside

1: $10,010                                         1: $9,870

2: $10,355                                         2: $9,735

                                                           3: $9,580

Ethereum

Ethereum also made a move towards the upside while attempting to break its resistance level of $251.4. While the break is (so far) unsuccessful, it seems like the second-largest cryptocurrency by market cap has strong support in both the $240 level and the 21-period moving average, which means that the price will not dramatically fall without a fight.


Ethereum’s volume increased drastically during the peak of the move towards the upside but started to fade as the $251.4 level kept resisting.

Key levels to the upside                    Key levels to the downside

1: $251.4                                            1: $240

2: $260                                              2: $225.4

                                                           3: $217.6

Ripple

XRP stayed in its tight range over the course of the day, bound by the $0.2 support and $0.205 resistance level. While its price increased slightly, XRP didn’t make a determined move towards the upside (like Bitcoin and Ethereum did).


While scalp traders might enjoy the ranging moves, a confirmed break to either the upside or downside will benefit any trader as the move would most likely be easy to spot and profit from.

Key levels to the upside                    Key levels to the downside

1: $0.205                                           1: $0.2

2: $0.214                                           2: $0.19

 3: $0.227                                                        

 

Categories
Forex Price-Action Strategies

Do not Forget to Check the Daily Chart

In today’s lesson, we demonstrate an example of an H4 chart and try to evaluate its price movement after breakouts. The chart shows that the price makes three breakouts altogether. The first two breakouts do not create that much momentum towards the breakout, but the last one does. We try to find out the reason behind it.

In today’s lesson, we demonstrate an example of an H4 chart and try to evaluate its price movement after breakouts. The chart shows that the price makes three breakouts altogether. The first two breakouts do not create that much momentum towards the breakout, but the last one does. We try to find out the reason behind it.

In today’s lesson, we demonstrate an example of an H4 chart and try to evaluate its price movement after breakouts. The chart shows that the price makes three breakouts altogether. The first two breakouts do not create that much momentum towards the breakout, but the last one does. We try to find out the reason behind it.

This is an H4 chart. The chart shows that the price makes a bullish move and consolidates. It seems that the price has found its support since it has already produced a bullish engulfing candle. The buyers may go long in the pair above consolidation resistance.

The chart shows that consolidation resistance is a strong level of resistance where the price gets rejection several times. Since it is an H4 chart, three times rejections, on the same level, means that it is a daily level of resistance. Thus, an H4 breakout may not create that much momentum all the time.

The chart shows that the price after making a breakout consolidates for a long time again. It is because of the daily resistance factor. The daily candle confirms the breakout. Thus, the price in the H4 chart consolidates. Look at the last candle. This comes out as a bullish candle breaching consolidation resistance. Let us find out what happens next.

The last H4 bearish inside bar is the last candle of the day. It means the daily candle comes out as a bullish candle after the daily breakout, breakout confirmation, and daily reversal candle.

The price consolidates with one more candle to start the next trading day. A bullish reversal candle may push the price towards the North with good bullish momentum. Since the chart now belongs to the H4 traders as well.

Here it is. The chart produces a bullish engulfing candle closing well above consolidation resistance. The length of consolidation is shallow. However, the bullish reversal candle looks to be a perfect signal candle.

There she goes. The price heads towards the North with extreme bullish momentum. The last candle suggests that the price may continue its bullish journey. Let’s look at the last move. The price does not consolidate with enough depth, but it makes a strong bullish move. On the other hand, on the first two occasions, it consolidates well, but its breakout does not create good momentum. It is because, on the first two occasions, there is a daily resistance factor. The level of daily resistance makes the H4 traders wait for more. Once the price makes a breakout on the daily chart, it heads towards the breakout direction with good momentum. The H4 traders are to check the daily chart before taking entry. This is one more reason to check that one thoroughly.

Categories
Forex Market Analysis

Allianz Rejection to Signal a new Bearish Wave

Allianz (XETRA:ALV), a German-based financial company, sinks near 3% in the current week after having completed a zigzag pattern (5-3-5) when the price reached the level of €194.76 per share.

Allianz (XETRA:ALV), a German-based financial company, sinks near 3% in the current week after having completed a zigzag pattern (5-3-5) when the price reached the level of €194.76 per share.

Allianz (XETRA:ALV), a German-based financial company, sinks near 3% in the current week after having completed a zigzag pattern (5-3-5) when the price reached the level of €194.76 per share.

ALV exposes in its 2-hour chart the rejection in the zone of the upper line of the ascending channel that converges with the pause zone of the first downward sequence started on February 21ts when the price topped at €232.60 per share.

In the previous chart, we observe that ALV completed its first bearish three-wave sequence corresponding to wave A of Minor degree labeled in green. In this first leg, we distinguish that Allianz, in its last move, developed a terminal Elliott wave pattern corresponding to an ending diagonal that was completed on March 19th when the stock price found fresh buyers at €117.10.

Once the price jumped in a three-wave sequence, ALV raised until €163.74 per share, completing the wave (i) of the Minuette degree labeled in blue. This movement reveals an overlapped structural series that corresponds to a leading diagonal.

According to the Elliott wave principle, a leading diagonal tend to appear in waves 1 or A. Its internal structure follows a subdivision as 3-3-3-3-3. In the figure, we observe that the leading diagonal pattern ended at €177.40 per share, where the price found fresh sellers and completed its wave ((a)) of Minute degree labeled in black.

The breakdown of the intraday trendline that advances with wave (v) of ((a)) validated the end of wave ((a)) and the start of a new movement corresponding to wave ((b)). This new corrective move carried down to ALV to find support at €139.78 per share on May 14th, where the German financial company found the incorporation of fresh buyers, who moved the market in an upward five-wave sequence corresponding to wave ((c)) of Minuette degree in blue.

The third movement corresponding to wave ((c)) of Minute degree, which belongs to the corrective structure of upper-degree, developed its rally in a five-wave sequence until the level €194.76. This move shows its fifth internal wave as an extended move.

Following the Elliot Wave Theory, we can observe that the retracement that Allianz is starting to develop could drag to the stock price until the zone of the beginning of wave (v) in blue, where the price should find support.

In conclusion, our preferred positioning remains on the bearish side until the zone that marks the beginning of wave (v) of the Minuette degree.

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 10 – Crypto Ransomware Cartels Forming; Market Preparing For A Move

The crypto market has spent the day without much movement and with low volatility.  Bitcoin is currently trading for $9,737, which represents an increase of 0.54% on the day. Meanwhile, Ethereum gained 0.18% on the day, while XRP lost 0.78%.

The crypto market has spent the day without much movement and with low volatility.  Bitcoin is currently trading for $9,737, which represents an increase of 0.54% on the day. Meanwhile, Ethereum gained 0.18% on the day, while XRP lost 0.78%.

The crypto market has spent the day without much movement and with low volatility.  Bitcoin is currently trading for $9,737, which represents an increase of 0.54% on the day. Meanwhile, Ethereum gained 0.18% on the day, while XRP lost 0.78%.

Swiss Borg took the position of today’s biggest daily gainer, with gains of 18.23%. HedgeTrade lost 7.87% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance decreased since we last reported, with its value currently at 65.20%. This value represents a 0.92% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization increased slightly over the course of the day, with the market’s current value being $277.69 billion. This value represents an increase of $1.61 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Crypto Ransomware Cartel?

Ransomware attacks started happening all over the world recently. They were performed by well-known cybercriminal groups, which are reportedly teaming up and creating cartel-style alliances, all with the idea to pressure their respective victims into paying the ransom requests.

The central feature to show that this is happening is that the gang notes that Ragnar Locker, which is a ransomware group, provided this info, as the title of the blog post they have posted says: “MAZE CARTEL Provided by Ragnar.”

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has spent the day without much movement. As we noted yesterday, the $9,735 level was breached to the downside but was not confirmed (the lack of confirmation made us think that the move might be corrected soon). Bitcoin regained its price as well as the $9,375 level. There aren’t many opportunities for traders at the moment, but scalp traders might use the fact that Bitcoin is fluctuating around $9,735 and testing support and resistance levels above and below it.


Key levels to the upside                    Key levels to the downside

1: $9,870                                           1: $9,735

2: $10,010                                         2: $9,580

                                                           3: $9,250

Ethereum

Ethereum had no movement throughout the day, as it stayed within a one-dollar range. The second-largest cryptocurrency by market capitalization is secured by the 21-period moving average on its downside, while it has absolutely no volume to even try to test the upper levels.


Ethereum’s volume is extremely low while its RSI level is flat for a couple of days, sitting at 53.

Key levels to the upside                    Key levels to the downside

1: $251.4                                            1: $240

2: $260                                              2: $225.4

                                                           3: $217.6

Ripple

XRP slowly moved towards the $0.2 downside and tested the level after failing to break $0.205 due to the lack of volume. The third-largest cryptocurrency by market cap is in an inverse spot to Ethereum, as both the 21-period and 50-period moving averages are guarding the upside rather than the downside. XRP will require a substantial increase in volume in order to break this range. On top of that, unless it gets “pulled” up by Bitcoin or fundamentals, XRP is most likely to go under $0.2.


Key levels to the upside                    Key levels to the downside

1: $0.205                                           1: $0.2

2: $0.214                                           2: $0.19

 3: $0.227                                                        

 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 10 – Top Trade Setups In Forex – US CPI and FOMC In Play! 

It’s going to be a busy day from the trading viewpoint as the U.S. CPI and FOMC will be the main highlight of the day. FED isn’t expected to cut the rates, but the CPI figures are expected to improve a bit, just like labor market figures. The dollar can stay stronger on sentiments until the actual data comes out.

It’s going to be a busy day from the trading viewpoint as the U.S. CPI and FOMC will be the main highlight of the day. FED isn’t expected to cut the rates, but the CPI figures are expected to improve a bit, just like labor market figures. The dollar can stay stronger on sentiments until the actual data comes out.

It’s going to be a busy day from the trading viewpoint as the U.S. CPI and FOMC will be the main highlight of the day. FED isn’t expected to cut the rates, but the CPI figures are expected to improve a bit, just like labor market figures. The dollar can stay stronger on sentiments until the actual data comes out.

Economic Events to Watch Today

 

 

 EUR/USD – Daily Analysis

The EUR/US is trading with a bullish bias below 1.1366 level. The price action of the EUR/USD pair remained flat throughout the Asian session. The President of the ECB (European Central Bank), Christine Lagarde, said that the central bank’s measure to fight the coronavirus crisis was proportionate to the severe risks facing its mandate. Lagarde said during a hearing at the Committee on economic and monetary affairs of the European Parliament, which was conducted via video conference that the crisis-related measures were temporary, targeted, and proportionate.

Besides, the ECB announced an additional 600 billion euros in its pandemic emergency purchase program (PEPP) and scaled up its previous 750 billion Euro, to extend the program till mid-2021. According to Lagarde, ECB continuously monitors the proportionality of its instruments, and she said that the net effects to be gained by PEPP expansion were overwhelmingly positive. The need for expansion was to avoid any deeper recession and quickening the pathway towards normalization.

When asked about the German court ruling of the ECB’s massive public sector purchase program, she said she was confident that a solution could be found because it was addressed to the German federal government and the German Parliament. On the data front, at 11:00 GMT, the German Industrial Production showed a decline of 17.9% in April against the expectations of 16% and weighed on shared currency euro. AT 13:30 GMT, the Sentix Investor Confidence from the Eurozone for June decline to 24.8 from the expected reduction of 22.0 and weighed on Euro.

The depressed Euro after inferior to expected German Industrial Production dragged the pair EUR/USD with itself to the low of 1.12680.

Meanwhile, Lagarde’s Speech explaining the benefits of ECB’s latest expansion in PEPP provided strength to Euro, which pushed the EUR/USD pair higher. For now, the eyes will remain on the U.S. CPI and FOMC data while the FED isn’t expected to change its policy rate, but the CPI can be a main driver in the market.  

Daily Support and Resistance

  • R3 1.1516
  • R2 1.1441
  • R1 1.1391

Pivot Point 1.1316

  • S1 1.1267
  • S2 1.1191
  • S3 1.1142

EUR/USD– Trading Tip

On Wednesday, the EUR/USD is consolidating in a narrow trading range of 1.1370 – 1.1276 level, and right now, it seems to break out of this trading range. On the lower side, the next target level seems to be 1.1185. Currently, the pair is facing immediate support around 1.1274 level, and closing of candles below this level may lead the EUR/USD prices further lower towards 1.1185 level, which is extended by the 50 EMA level. On the higher side, resistance holds at 1.1315 level today. Odds of bearish bias remains solid today.

GBP/USD – Daily Analysis

The GBP/USD continues to extend its 8-day winning streak and soars to 1.2766, the highest since March 12, 2020, mainly due to the broad-based U.S. dollar strength triggered by the geopolitical tensions between the Korean neighbors. Currently, the GBP/USD is holding at 1.2769 and consolidates in a new trading range of 1.2702 – 1.2815. However, the Brexit concerns remain on the card while showing no progress, which ultimately exerted some downside pressure on the British Pound and contributed to the currency pair declines.

It should be noted that the British retailers reported a sharp drop in annual sales last month, but less bad than April due to some COVID-19 restrictions eased, and more customers started online shopping.

At the data front, the British retail consortium May total sales -5.9% YoY vs. April -19.1% pct YoY, second-biggest fall since records began in 1995. The British retail consortium May like-for-like sales +7.9% YoY vs. April +5.7% YoY, excluding temporarily closed stores and including online sales. In the meantime, the Barclaycard U.K. may consider consumer spending -26.7% YoY vs. April -36.5% YoY.

However, the reason for limiting further losses in the currency pair could be attributed to the report that the United Kingdom and Japan are set to discuss the post-Brexit trade deal on the day which could underpin the cable pair.

At the USD front, the broad-based U.S. dollar recovered its previous session losses and drawing bids at press time as investors awaiting the next moves from the U.S. Federal Reserve ahead of its policy meeting. The U.S. dollar gains were further bolstered by the risk-off market sentiment triggered by the growth in geopolitical stresses between the Korean neighbors. However, the U.S. dollar’s bullish bias turned out to be one of the key factors that kept a lid on profits in the GBP/USD currency pair. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies increased by 0.10% to 96.707 by 12:53 AM ET (5:53 AM GMT).

The U.S. 10-year Treasury yields fell 4-basis points (bps) to 0.844% while the stocks in Asia and the U.S. stock futures reported modest losses. The lack of significant data/events will urge the Cable traders to look for further details on risk catalysts for a fresh impetus. The UK-Japan trade talks and the US-China tension could offer hints and can help the greenback to gains further bullish traction.

Daily Support and Resistance

  • R3 1.2926
  • R2 1.2841
  • R1 1.2787

Pivot Point 1.2702

  • S1 1.2647
  • S2 1.2563
  • S3 1.2508

GBP/USD– Trading Tip

The bullish bias in the GBP/USD continues to dominate the market, and it’s leading the GBP/USD prices higher towards 1.2760 while the next resistance holds around 1.2816 level. Continuation of an upward trend can lead Sterling towards 1.2866 level while the support holds around 1.2707 level today. Below this, the prices can drop to 1.2638 level. On the 4 hour timeframe, the Cable has formed an upward channel that may keep the Sterling bullish today. Let’s look for buying over 1.2702 level today. 

USD/JPY – Daily Analysis

 The USD/JPY is trading dramatically bearish, falling from 107.900 level to 107.300. The USD/JPY remained strongly bearish throughout the Asian session, and it posted a steeper loss on Tuesday, followed by Mondays’ bearish trend amid the broad-based U.S. dollar weakness and improved Japanese economic outlook.

On the data front, at 4:50 GMT, the Bank Lending for the year from Japan increased to 4.8% in May from 2.9% in April. The Final GDP for the quarter decreased by 0.6% against the expected decline of 0.5% and weighed on Yen. 

At 4:52 GMT, the Current Account Balance for April came short of expectations of 0.33T as 0.25T and weighed on Japanese Yen. The Final GDP Price Index for the year came in line with the expectations if 0.9%. At 10:02 GMT, the Economy Watchers Sentiment, however, came in favor of Japanese Yen as 15.5 against the expected 12.6.

The preliminary reading of Japan’s Q1 GDP moved from -0.9% to -0.6% and came in better, which indicated the readiness of Japanese policymakers with extra stimulus if needed to fight against the pandemic.

Moreover, the better outlook of Japan’s current economic condition supported the Japanese Yen on Monday and weighed on the USD/JPY pair.

On the other hand, despite upbeat economic data from the U.S., the greenback lost its demand due to the drop in risk barometer that day. The rush of traders’ return from riskier assets weighed on the U.S. dollar and made it weak. 

Daily Support and Resistance    

  • R3 109.26
  • R2 108.91
  • R1 108.33
  • Pivot Point 107.97
  • S1 107.39
  • S2 107.03
  • S3 106.45

USD/JPY – Trading Tips

The USD/JPY is trading sharply bearish at 107.300 level, having violated the upward trendline at 107.600. Below this, the pair has a great potential to go for a 107.08 level, while a bearish breakout of 107.082 level can dip further until 106.770 level. On the 4 hour chart, the MACD, and RSI, both are holding in the selling zone, demonstrating that there’s further room for selling in the USD/JPY pair. Let’s consider taking selling trades below 107.97 today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 9 – Top Trade Setups In Forex – European GDP in Highlights! 

On the news front, the Eurozone is due to release series of high impact events that may drive movements in the Euro related currency pairs. The events like trade balance, GDP, and final employment change will be in the highlights.

On the news front, the Eurozone is due to release series of high impact events that may drive movements in the Euro related currency pairs. The events like trade balance, GDP, and final employment change will be in the highlights.

On the news front, the Eurozone is due to release series of high impact events that may drive movements in the Euro related currency pairs. The events like trade balance, GDP, and final employment change will be in the highlights.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/US prices were closed at 1.12937 after placing a high of 1.3196 and a low of 1.12680. Overall the movement of the EUR/USD pair remained flat throughout the day.

On Monday, the President of the European Central Bank, Christine Lagarde, said that the central bank’s measure to fight the coronavirus crisis was proportionate to the severe risks facing its mandate.

Lagarde said during a hearing at the Committee on economic and monetary affairs of the European Parliament, which was conducted via video conference, that the crisis-related measures were temporary, targeted, and proportionate.

On Thursday in its monetary policy decision, ECB announced an additional 600 billion euros in its pandemic emergency purchase program (PEPP) and scaled up its previous 750 billion Euro, to extend the program till mid-2021.

According to Lagarde, ECB continuously monitors the proportionality of its instruments, and she said that the net effects to be gained by PEPP expansion were overwhelmingly positive. The need for expansion was to avoid any deeper recession and quickening the pathway towards normalization.

When asked about the German court ruling of the ECB’s massive public sector purchase program, she said she was confident that a solution could be found because it was addressed to the German federal government and the German Parliament.

On the data front, at 11:00 GMT, the German Industrial Production showed a decline of 17.9% in April against the expectations of 16% and weighed on shared currency euro. AT 13:30 GMT, the Sentix Investor Confidence from the Eurozone for June decline to 24.8 from the expected reduction of 22.0 and weighed on Euro.

The depressed Euro after inferior to expected German Industrial Production dragged the pair EUR/USD with itself to the low of 1.12680.

Meanwhile, Lagarde’s Speech explaining the benefits of ECB’s latest expansion in PEPP provided strength to Euro, which pushed the EUR/USD pair higher.

Lagarde’s Speech and economic data from Eurozone moved in the opposite direction, and hence, the pair EUR/USD remained flat throughout the day as it closed at the same level it was started with. No data was to be released from the American side, so the pair followed Euro’s directions.

Daily Support and Resistance

  • R3 1.1357
  • R2 1.1338
  • R1 1.1327

Pivot Point 1.1308

  • S1 1.1296
  • S2 1.1278
  • S3 1.1266

EUR/USD– Trading Tip

The EUR/USD is consolidating in a narrow trading range of 1.1370 – 1.1276 level, and right now, it seems to break out of this trading range. On the lower side, the next target level seems to be 1.1185. Currently, the pair is facing immediate support around 1.1274 level, and closing of candles below this level may lead the EUR/USD prices further lower towards 1.1185 level, which is extended by the 50 EMA level. On the higher side, resistance holds at 1.1315 level today. Odds of bearish bias remains solid today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.27235 after placing a high of 1.27358 and a low of 1.26278. Overall the movement of GBP/USD remained bullish throughout the day. The broad-based U.S. dollar selling bias after the positive tone around greenback followed by Friday’s job report vanished pushed the pair GBP/USD higher on Monday. The currency pair GBP/USD raised for the 8th consecutive day on Monday and continued its bullish rally.

The weakness of the U.S. dollar was attributed to weak U.S. yields. The U.S. dollar index (DXY) turned negative on the day and fell back to below 97.00 level. The U.S. stock was high on the back of increased risk appetite.

On the other hand, the E.U. chief negotiator, Michel Barnier, was supposed to present a compromise proposal on access to British waters during the latest round of talks, but at the last minute, he was blocked to present the proposal by its member states with large fishing communities.

E.U. now expects the talks to drag into October, but the U.K. has ruled it out and said that it was unacceptable. E.U. wanted to intensify and accelerate its work to make progress with the negotiations, and the U.K. need to prepare its businesses for a new trading environment.

On the fishing issue, the E.U. wants the U.K. to follow the structures of standard fisheries policy (CFP) from the end of 2020. But British fishing communities claim that the policy left the U.K. with far too few fish to catch, so they want to be an independent coastal state from the end of 2020. On the data front, there was no macroeconomic data to be released from both sides so, the pair continued following its previous day’s trend and posted gains on the back of the risk-on market sentiment.

Daily Support and Resistance

  • R3 1.28
  • R2 1.2765
  • R1 1.2742

Pivot Point 1.2707

  • S1 1.2684
  • S2 1.2649
  • S3 1.2627

GBP/USD– Trading Tip

The GBP/USD’s overall trend is bullish as the pair continues to reach 1.2690 levels, having violated the triple top level on the 4-hour timeframe. The pair is retracing a bit; perhaps, investors are doing some profit-taking before taking any additional buying position in Sterling. Bullish trend continuation leads to GBP/USD prices towards the next resistance level of 1.2760 level. Above this, the next resistance holds around 1.2795 level. Conversely, the support is likely to be found around 1.2665 and 1.2601 level today. Let’s look for selling below 1.2707 and buying above this level today. 

USD/JPY – Daily Analysis

 The USD/JPY pair was closed at 108.426 after placing a high of 109.691 and a low of 108.232. Overall the movement of the USD/JPY pair remained strongly bearish throughout the day. The pair USD/JPY posted a steeper loss on Monday amid the broad-based U.S. dollar weakness and improved Japanese economic outlook. The pair dropped on Monday after posting gains for the previous four consecutive days.

On the data front, at 4:50 GMT, the Bank Lending for the year from Japan increased to 4.8% in May from 2.9% in April. The Final GDP for the quarter decreased by 0.6% against the expected decline of 0.5% and weighed on Yen. At 4:52 GMT, the Current Account Balance for April came short of expectations of 0.33T as 0.25T and weighed on Japanese Yen. The Final GDP Price Index for the year came in line with the expectations if 0.9%. At 10:02 GMT, the Economy Watchers Sentiment, however, came in favor of Japanese Yen as 15.5 against the expected 12.6.

The preliminary reading of Japan’s Q1 GDP moved from -0.9% to -0.6% and came in better, which indicated the readiness of Japanese policymakers with extra stimulus if needed to fight against the pandemic.

Moreover, the better outlook of Japan’s current economic condition supported the Japanese Yen on Monday and weighed on the USD/JPY pair.

On the other hand, despite upbeat economic data from the U.S., the greenback lost its demand due to the drop in risk barometer that day. The rush of traders’ return from riskier assets weighed on the U.S. dollar and made it weak. 

Daily Support and Resistance    

  • R3 110.81
  • R2 110.25
  • R1 109.34

Pivot Point 108.79

  • S1 107.88
  • S2 107.33
  • S3 106.42

USD/JPY – Trading Tips

The USD/JPY fell dramatically to violate the narrow trading range of 109.800 – 109.255, and now it’s trading somewhere around 107.900. On the 4 hour timeframe, the USD/JPY is likely to find support at 107.900, and below this, the upward trendline may extend support around 107.600 level. The Japanese currency pair has already crossed below 50 EMA, favoring selling bias in the pair today. Let’s consider taking selling trades below 108.50 today. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 09 – Bitcoin Gaining 700% Soon? Analyst Estimates BTC At $75,000

The crypto market has spent the day mostly with low volatility, except for the past few hours when the price bounced up and down quickly before returning to its original values.  Bitcoin is currently trading for $9,700, which represents a decrease of 0.56% on the day. Meanwhile, Ethereum lost 0.04% on the day, while XRP gained 0.16%.

The crypto market has spent the day mostly with low volatility, except for the past few hours when the price bounced up and down quickly before returning to its original values.  Bitcoin is currently trading for $9,700, which represents a decrease of 0.56% on the day. Meanwhile, Ethereum lost 0.04% on the day, while XRP gained 0.16%.

The crypto market has spent the day mostly with low volatility, except for the past few hours when the price bounced up and down quickly before returning to its original values.  Bitcoin is currently trading for $9,700, which represents a decrease of 0.56% on the day. Meanwhile, Ethereum lost 0.04% on the day, while XRP gained 0.16%.

Kyber Network took the position of today’s biggest daily gainer, with gains of 9.7%. Divi lost 23.7% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased slightly since we last reported, with its value currently at 66.12%. This value represents a 0.87% difference to the upside when compared to yesterday’s value.

The cryptocurrency market capitalization decreased slightly over the weekend, with the market’s current value being $276.08 billion. This value represents a decrease of $0.24 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Bitcoin soon at $75,000?

Bitcoin analysis from Timothy Peterson (Cane Island Alternative Advisor) shows a strong possibility of BTC going to $75,000. The analysis is based on finding an uncanny similarity to Bitcoin’s chart movement in 2013. Peterson called this similarity “almost perfect.”

Peterson tracked Bitcoin’s price recovery from its 3,600 lows from mid-March, which (as he noted) looks almost exactly like the price action from seven years ago. If the price action from seven years ago can be translated into the future, Bitcoin should move 700% to the upside, giving it a price of around $75,000.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has spent the day mostly without any large price fluctuations. The market has been slow except for one single candle which tried to break both the upside and downside key levels but failing to do either completely.


Bitcoin’s volume is on the same levels as over the past week, while its RSI level fell to 50. The key level of $9,735 will be moved to the “upside” once the break is confirmed.

Key levels to the upside                    Key levels to the downside

1: $9,870                                           1: $9,735

2: $10,010                                         2: $9,580

                                                           3: $9,250

Ethereum

Ethereum had quite a slow day as well, with its price making a move only in a recent couple of candles. While one candle was strictly bullish, the other one had large wicks to both the upside and downside. The 21-period moving average seems to be holding the price quite well.


Ethereum’s volume increased in the past few candles, while its RSI level came down to 54.

Key levels to the upside                    Key levels to the downside

1: $251.4                                            1: $240

2: $260                                              2: $225.4

                                                           3: $217.6

Ripple

XRP made a move towards the upside and spent the whole day trying to break the $0.205 resistance level. However, the move was unsuccessful, triggering a severe drop, which even broke the $0.2 support level for a few minutes. However, the bulls came back almost instantly and picked up where they left off, threatening the $0.205 resistance level once again.


A break above $0.205 with an increase in volume (or a confirmation of breaking $0.205) could be a good trading opportunity for scalp traders.

Key levels to the upside                    Key levels to the downside

1: $0.205                                           1: $0.2

2: $0.214                                           2: $0.19

 3: $0.227                                                        

 

Categories
Forex Price Action

Some to Take and Some to Skip

In today’s lesson, we are going to demonstrate an example of an H4 chart, which seems to be offering several entries. However, a trader has to be very calculative before taking an entry. Some entries are there to be taken, and some are there not to be taken. We would try to find out why we shall skip taking some entries. Let us get started.

In today’s lesson, we are going to demonstrate an example of an H4 chart, which seems to be offering several entries. However, a trader has to be very calculative before taking an entry. Some entries are there to be taken, and some are there not to be taken. We would try to find out why we shall skip taking some entries. Let us get started.

In today’s lesson, we are going to demonstrate an example of an H4 chart, which seems to be offering several entries. However, a trader has to be very calculative before taking an entry. Some entries are there to be taken, and some are there not to be taken. We would try to find out why we shall skip taking some entries. Let us get started.

This is an H4 chart. The chart shows that the price makes a strong bullish move and consolidates for a long time. The last candle comes out as a bullish candle breaching consolidation resistance. It usually a scenario of taking a long entry. Before taking an entry, we must calculate whether the price consolidates for more than a day or not. Over here, the price consolidates more than a day. It means the level of resistance becomes daily resistance. The breakout is not for the H4-daily combination traders to trigger a long entry.

The chart shows that the price heads towards the North. The buyers may wait for the price to consolidate and get a bullish reversal candle to go long in the pair. They must keep their eyes on the pair.

The chart produces a bearish inside bar. It may consolidate more and make a deeper consolidation. This is what the buyers are to hope for. Let us find out what the price does here.

The chart shows that the price consolidates for five candles altogether. The last bullish candle is the last H4 candle of that day. It means if the chart produces the next candle as a bullish engulfing candle, the buyers will have an opportunity to go long in the pair. Otherwise, they are to wait longer.

The last candle comes out as a bullish engulfing candle breaching consolidation resistance. The buyers may trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R.

The price consolidates again and produces a bullish engulfing candle. It seems the bull is going to dominate in the pair for a long time since it finds another level of support. When price trends like that, traders add more positions, and the price keeps trending relatively for a longer time.

Here it is. The price hits the target of 1R. They buyers grab some green pips. Yes, they wait for the price to hit the target. Some traders may take a partial profit out of it and let the rest of the trade run to grab more pips.

In this lesson, we have demonstrated that traders may take the second entry and skip the first one because of the daily resistance factor. Traders must calculate these things before taking entry.

Categories
Forex Market Analysis

Daily F.X. Analysis, June 8 – Top Trade Setups In Forex – Dollar Strengthens Over NFP! 

On the news front, the eyes will remain on the German Industrial Production m/m and ECB President Lagarde Speaks. Both of these may have an impact on the Euro related currency pairs.

On the news front, the eyes will remain on the German Industrial Production m/m and ECB President Lagarde Speaks. Both of these may have an impact on the Euro related currency pairs.

On the news front, the eyes will remain on the German Industrial Production m/m and ECB President Lagarde Speaks. Both of these may have an impact on the Euro related currency pairs.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12911 after placing a high of 1.13835 and a low of 1.12781. Overall the movement of EUR/USD remained bearish throughout the day. The EUR/USD pair rose to 1.13835 near 13-weeks highest level but failed to remain there and broke its nine days bullish streak and fell on Friday amid U.S. dollar strength across the board after the release of US Non-Farm Employment Change.

The pair EUR/USD was on bullish track after the announcement of an additional 600 billion euros in the emergency package from the European Central Bank on Thursday. The package was announced to cover up the losses faced after the coronavirus induced lockdowns across the globe and its impact on the global economy.

The additional 600 billion euros by ECB in its pandemic emergency purchase program (PEPP) made the total size of aid provided after the coronavirus crisis to 1.35 trillion euros. ECB also said that the updated forecast about GDP showed a contraction of 8.7% this year, and the inflation expectations were to rise by 0.3% this year and 0.8% in next year. EUR/USD moved in an upward direction after the ECB’s PEPP announcement and continued to follow the trend in early sessions on Friday and rose above 13-weeks higher level.

However, after the release of US Non-Farm Employment Change, the pair EUR/USD started to move in the opposite direction at the ending day of the week. At 17:30 GMT, the Non-Farm Employment Change from the United States showed that 2.509M people were hired in May against 7.750M of job loss expectations. A stronger than expected job report from the U.S. gave strength to the U.S. dollar across the board and weighed on EUR/SD pair.

Adding in the strength on the U.S. dollar was the Unemployment Rate, which came in as 13.3% against the expectations of 19.4% and further dragged down the pair EUR/USD pair.

On the other hand, from the Europe side, at 11:00 GMT, the German Factory Orders for April were also released which showed that factory orders were reduced by 25.8% in April against the expected drop of 20% and weighed on Euro which ultimately dragged the pair in a downward trend.

Daily Support and Resistance

  • R3 1.1357
  • R2 1.1338
  • R1 1.1327

Pivot Point 1.1308

  • S1 1.1296
  • S2 1.1278
  • S3 1.1266

EUR/USD– Trading Tip

The EUR/USD is also following a bearish trend on the back of a stronger dollar. Currently, the pair is facing immediate support around 1.1284 level, and closing of candles below this level may lead the EUR/USD prices further lower towards 1.1244 level, the support, which is extended by the 50 EMA level. On the higher side, resistance holds at 1.1315 level today. Odds of bearish bias remains solid today.

GBP/USD – Daily Analysis

The GBP/USD was closed at 1.26689 after placing a high of 1.26901 and a low of 1.25828. Overall the movement of GBP/USD pair remained bullish throughout the day. The pound rose for 7th consecutive day on Friday amid the rising hopes for a deal between E.U. & U.K. but lost some of its daily gains after the release of U.S. on-Farm Employment Change.

Matt Hancock, the Cabinet Minister of the U.K., said that a trade deal with the E.U. was still possible on very reasonable demands. In the latest rounds, both sides admitted that a little progress was made, and they were very hopeful that no-deal outcomes to the talks could be avoided.

The U.K. & E.U. differences have remained under four key points of fisheries: competition rules, governance, and police cooperation. UK PM Boris Johnson and President of European Commission, Ursula von der Leyen, are expected to meet later this month.

The U.K. has only until the end of June to apply for the extension of the transition period, but Johnson has ruled it out. However, the hopes that U.K. & E.U. will reach a deal after the described little progress in talks from both sides increased, and hence, the pair GBP/USD found traction in the market.

Whereas, the investors think that chances for no-deal Brexit were more than ever because the coronavirus pandemic will lead to one of the worst recessions in modern history, and investors think that hardcore Brexiteers will use the recession as a perfect distraction to get to a no-deal Brexit done.

On the data front, at 12:30 GMT, the Halifax Housing Price Index for May from the United Kingdom was declined by 0.2% against the expected decline of 0.7% and supported British Pound which ultimately pushed the GBP/USD pair on bullish track on Friday and added in the pair gains.

Meanwhile, the U.S. dollar strength after the release of US Non-Farm Employment Change exerted pressure on the rising prices of GBP/USD pair on Friday and made it lose some of its daily gains.

Daily Support and Resistance

  • R3 1.28
  • R2 1.2765
  • R1 1.2742

Pivot Point 1.2707

  • S1 1.2684
  • S2 1.2649
  • S3 1.2627

GBP/USD– Trading Tip

On Monday, the technical side of the GBP/USD seems bullish as the pair continues to reach 1.2690 levels, having violated the triple top level on the 4-hour timeframe. The GBP/USD pair has formed an upward regression trend channel, and it’s driving further buying trend in the Cable. Bullish Continuation of a bullish trend can lead to GBP/USD prices towards the next resistance level of 1.2760 level. Above this, the next resistance holds around 1.2795 level. Conversely, the support is likely to be found around 1.2665 and 1.2601 level today. Let’s look for selling below 1.2707 and buying above this level today. 

USD/JPY – Daily Analysis

The USD/JPY was closed at 109.573 after placing a high of 109.848 and a low of 109.042. Overall the movement of USD/JPY remained bullish throughout the day. The USD/JPY pair surged for the fourth consecutive day on Friday and gained some strong follow-through traction after the release of surprisingly stronger than expected U.S. monthly jobs data. The headline data of Friday, NFP, showed that 2.509M jobs were added in May, whereas the forecast was about 8M job loss.

Adding in the optimism was the unemployment rate, which beat the market expectations and was reported as 13.7% against 19.4% of expectations. Better than expected, data from the U.S. economy raised the bars for recent optimism over the sharp V-shaped recovery for global economic recovery. This increased the already stronger risk appetite In the market and hence, the USD/JPY pair gained for the 4th consecutive day on Friday.

At 4:30 GMT, the Household Spending for the year from Japan was declined by 11.1% against the expected decline of 12.8% and supported the Japanese Yen. At 10:00 GMT, the Leading Indicators from Japan remained flat with the expectations of 76.2%.

From the American side, the Average Hourly Earnings in May was declined by 1.0%, whereas it was expected to rise by 1.0%. The US Non-Farm Employment Change showed that 2.509M people were hired back in May, which were expected to show job loss of 7.750M people. The Unemployment Rate in April fell short of 19.4% expectations and came in as 13.3% and supported the U.S. dollar.

Daily Support and Resistance    

  • R3 109.79
  • R2 109.74
  • R1 109.67

Pivot Point 109.62

  • S1 109.56
  • S2 109.5
  • S3 109.44

USD/JPY – Trading Tips

The USD/JPY is consolidating in a narrow trading range of 109.800 – 109.255. The stronger than expected NFP figures drove buying in the USD/JPY pair on Friday, but now the traders seem to capture retracement in the market. A bearish breakout of 109.280 level can drive selling until the next support level of 109, which marks 38.2% Fibonacci retracement. The 50 EMA and MACD both are supporting the buying trend in the USD/JPY pair, and it can lead the USD/JPY prices further higher today. On the higher side, the resistance holds around 109.850. Let’s wait for a breakout of 109.800 – 109.255 to determine further trends in the USD/JPY pair. All the best for today! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 08 – Cryptos Preparing For The Next Move – What To Expect?

The crypto market has spent this weekend mostly with low volatility and one Bitcoin’s sudden price spike, which triggered the market for a short while.  Bitcoin is currently trading for $9,755, which represents an increase of 0.59% on the day. Meanwhile, Ethereum gained 0.42% on the day, while XRP lost 0.7%.

The crypto market has spent this weekend mostly with low volatility and one Bitcoin’s sudden price spike, which triggered the market for a short while.  Bitcoin is currently trading for $9,755, which represents an increase of 0.59% on the day. Meanwhile, Ethereum gained 0.42% on the day, while XRP lost 0.7%.

The crypto market has spent this weekend mostly with low volatility and one Bitcoin’s sudden price spike, which triggered the market for a short while.  Bitcoin is currently trading for $9,755, which represents an increase of 0.59% on the day. Meanwhile, Ethereum gained 0.42% on the day, while XRP lost 0.7%.

Loopring took the position of today’s biggest daily gainer, with gains of 21.23%. IOST lost 3.13% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased slightly since we last reported, with its value currently at 65.25%. This value represents a 0.11% difference to the upside when compared to Friday’s value.

The cryptocurrency market capitalization decreased slightly over the weekend, with the market’s current value being $276.32 billion. This value represents an increase of $1.33 billion when compared to the value it had on Friday.

What happened in the past 24 hours

Another ransomware attack targeting the aerospace industry

ST Engineering Aerospace’s subsidiary (located in the US) suffered a ransomware attack that extracted somewhere around 1.5TB of sensitive data from their database. This Singapore-based company was, as the report says, attacked by the well-known ransomware organization called Maze.

The report shows that the data stolen by these criminals is related to many things, including contract details with various governments, organizations, as well as airlines across the globe.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has spent the weekend without much turbulence. The price was on a slow downward-facing path, testing and slowly breaking narrow ranges until bulls seem to have had enough. The price then jumped up from $9,350 to $9,820 before coming back to the levels it is at at the moment. The $9,735 level is currently being tested.


Bitcoin’s volume was decreasing gradually throughout the weekend until the most recent rise, which caused the price to go up.

Key levels to the upside                    Key levels to the downside

1: $9,870                                           1: $9,735

2: $10,010                                         2: $9,580

                                                           3: $9,250

Ethereum

Ethereum’s chart looks similar to Bitcoin’s chart, though the moves to both the upside and downside aren’t as pronounced. The second-largest cryptocurrency by market cap gradually decreased in price until the bulls stepped in and brought the price from $235 to $245. The bottom of this descending mini-trend was seemingly the 50-period moving average.


Ethereum’s volume increased during the upswing but quickly returned to its usual (low) levels.

Key levels to the upside                    Key levels to the downside

1: $251.4                                            1: $240

2: $260                                              2: $225.4

                                                           3: $217.6

Ripple

XRP has spent the weekend trading within a narrow range, bound by $0.2 support and $0.205 resistance level. Both of these levels got tested, but none showed any definitive signs of breaking. XRP’s future price direction will most likely be determined by Bitcoin’s next move.


Key levels to the upside                    Key levels to the downside

1: $0.205                                           1: $0.2

2: $0.214                                           2: $0.19

 3: $0.227                                                        

 

Categories
Forex Elliott Wave

Advanced Applications in Wave Analysis – Part 4 of 4

Introduction

Introduction

Introduction

In the previous educational article, we presented the contracting triangles and the restricting group. In this last part of our four-part series, we’ll show the non-restrictive contracting triangles and the expanding triangles with its variations. 

Non-Restrictive Triangles

This sub-group of triangles is characterized by locates in any other part of the wave cycle, not exclusively in waves 4 or B. The knowledge of this type of triangles could be useful to the wave analyst in the study of complex corrective patterns. This type of triangles tends to be produced at the end of complex corrections. Frequently, non-restrictive triangles tend to be more simple to identify than restrictive triangles.

  • Wave A. This segment tends to be the most volatile in terms of price at the time of the triangle. According to the alternation principle, if wave A is violent and takes a small portion of its completion, wave B will be slower and complex than wave A.
  • Wave E. In this scenario, the last segment of a non-restrictive contracting triangle, tends to develop a non-restrictive triangle. In other words, wave E could make a triangle inside a triangle of the upper degree. From the different types of non-restrictive triangles, the horizontal triangle tends to be the most common in the real market. The following list exposes the parts where the non-restrictive triangle.
    • Wave E in a horizontal triangle.
    • Last movement of a complex correction as a double or triple corrective pattern.
    • The fifth wave of an impulsive terminal structure.
    • The wave X of a complex correction.

Expanding Triangles

The expanding triangle tends to cheat the wave analyst more than the contracting triangle. This situation occurs because when the price moves in a volatile session, it tends to create a false breakout and quickly resuming its original trend.

The main characteristics of an expanding triangle are:

  • Wave A or wave B will be the shortest wave of the triangle.
  • Wave E tends to develop an explosive movement, higher in terms of price and time than the other waves.
  • In the same way that in contracting triangles, a contracting triangle can produce in wave E, in an expanding triangle, it can construct an expanding triangle.
  • The next movement of the triangle, which could correspond to wave C or 5, should not retrace the advance of wave E entirely.
  • The expanding triangle usually does not follow any Fibonacci relationship.
  • Expanding triangles normally occurs after a powerful movement such as an extended wave or an extended wave C. 

Restrictive Expanding Triangles

The restrictive expanding triangle tends to be placed in waves 4 and B. If the expanding triangle locates in wave B, the triangle belongs to a flat pattern. The rules applied to this group of expanding triangles are as follows:

  1. Waves A and E will be related through a 161.8%, being the wave E the largest segment.
  2. Wave A or B must be the shortest segment of the triangle.
  3. Only wave B or D can fail to try to surpass the previous wave.

Horizontal Expanding Triangle. The characteristics of this pattern are as follows:

  1. Wave A is the shortest segment of the triangle.
  2. Each leg after wave A will be larger than the previous segment.
  3. Wave E should be the most volatile, complex, and longer terms of time than the other waves.
  4. Wave E tends to be 161.8% of wave A.

Irregular Expanding Triangle. This variation of the expanding triangle is the most common to find in the real market. The main characteristic of this variation is that every time that wave B try to surpass to wave A fails in its advance. Wave E and A are show a 161.8% relationship, being wave E the longest segment.

Continuous Expanding Triangle. This type of restrictive expanding triangle is the second most common pattern to find in the real market. The continuous triangle characterizes by failing when this tries to surpass the end of wave C. If wave D fails, the pattern could show a slight bullish or bearish bias. Finally, waves A and E will be related in a 261.8%, being wave E the longest segment.

Non-Restrictive Expanding Triangles

The non-restrictive expanding triangle pattern follows the same conditions as restrictive expanding triangles. Its main characteristics are as follows:

  • Usually, they don’t have any Fibonacci relationship in their internal segments. The only relationship could be found on waves A and E, where wave E length could be 261.8% of wave A length.
  • The apex of the expanding triangle occurs before the triangle. If the apex occurs between 20% and the start of the expanding triangle, the formation should be non-restrictive.

Conclusions

In this educational article, corresponding to the last part of our four-part series covering the triangle pattern, we presented in the first section, the Non-Restrictive Contracting triangle. This group of contracting triangles tends to appear at the end of complex corrections, or the end of an impulsive terminal structure.

The second section corresponds to the expanding triangles, which are characterized by tricking the different market participants, who tend to think that the market has reversed and, after its last volatile movement corresponding to wave E, they discovered that the market in fact is resuming its previous trend.

Suggested Readings

  • Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).

 

Categories
Forex Course

121. Trading The Bullish & Bearish AB=CD Harmonic Pattern

Introduction

Introduction

Introduction

The ABCD is one of the most straightforward patterns in the Harmonic lot. There are two types of ABCD patterns – Bullish AB=CD & Bearish AB=CD. For both the bearish and bullish versions, the AB and CD lines are the legs, whereas the BC line is considered the Retracement or correction. To confirm the formation of this pattern, we use Fibonacci levels that we have discussed in the previous course lessons.

By using the Fibonacci tool on leg AB, see if the BC retracement is reaching the 0.618 level. Next, the line CD should be the extension of 1.272 Fibonacci extensions of BC. This rule applies to both bearish and bullish AB=CD patterns. We go long or short when the price action reaches the point D of the corresponding pattern formed.

How To Trade The ABCD Harmonic Pattern

Bullish ABCD Pattern

The chart that you see below represents the formation of a bullish AB=CD pattern. The CD leg of the pattern is equal to the size of the AB leg. The BC move, which is a pullback, is 61.8% retracement of the AB move. Likewise, the CD move is the 127% retracement, which confirms the formation of a bullish AB=CD pattern on the EUR/USD Forex pair.

We have entered the market at point D, and the stop-loss is placed just below the D point. As you can see, we went for smaller stops, and there is a reason behind it. If the price action goes below point D, the pattern automatically gets invalid.

There are two take-profit areas in the pair. The first one is at point C, and the second is at point A. It all depends on at what point you desire to close your position. It is always advisable to close your positions at higher targets because the end goal for us is to milk the market as much as we can.

Bearish ABCD Pattern

The below NZD/CAD Forex pair represents the formation of a bearish AB=CD pattern. The AB leg of the pattern is equal to the CD leg. Furthermore, the BC is respecting the 61.8% retracement of the AB move, and the CD move was close to 127% extension of the BC move. We have gone short at point D as the price breakout happened.

In this example, we went for deeper targets. If the momentum of the prevailing trend is strong enough, going for a new lower low will be a good idea. The key to winning in trading is to follow the rules and think according to the market situation. These Harmonic patterns require a lot of patience and effort to trade. So it is strongly recommended to master this pattern in a demo account than to trade it in a live market.

Conclusion

The AB=CD is a reversal pattern that indicates the market trend reversal. The AB=CD pattern consists of three legs, and they form the zig-zag shape. This pattern is also known as a lightning bolt, as it looks like one. The AB=CD pattern can be used in any financial market and also in any trading timeframe. Follow the rules, no matter what, to make consistent profits from this pattern. Always execute your trade at point D and ride for the brand new higher high/lower low. Cheers.

[wp_quiz id=”76393″]
Categories
Forex Price Action

Significance of Having the Belief in Your Analysis

In today’s lesson, we are going to demonstrate an example of H1-15 combination trading. The price trends from the level of 61.8%. Usually, when the price trends from the level of 61.8%, it does not take that long to make a breakout. However, in this example, we will demonstrate that it may sometimes take longer than our expectations. Let us get started.

In today’s lesson, we are going to demonstrate an example of H1-15 combination trading. The price trends from the level of 61.8%. Usually, when the price trends from the level of 61.8%, it does not take that long to make a breakout. However, in this example, we will demonstrate that it may sometimes take longer than our expectations. Let us get started.

In today’s lesson, we are going to demonstrate an example of H1-15 combination trading. The price trends from the level of 61.8%. Usually, when the price trends from the level of 61.8%, it does not take that long to make a breakout. However, in this example, we will demonstrate that it may sometimes take longer than our expectations. Let us get started.

The chart shows that the price makes a strong bullish move towards the North. The last candle comes out a bearish inside bar. It indicates that the price may make a bearish correction. The buyers are to wait for the price to produce a bullish reversal candle followed by a bullish 15M breakout at the highest high of the wave to go long in the pair. This is the plan of the game. Let us find out how it goes.

The next candle comes out as a bearish candle as well. The last bearish candle has a long lower shadow. It indicates that the chart may produce a bullish reversal candle anytime soon. The buyers are to wait here with patience.

As expected, the chart produces a bullish reversal candle. The candle comes out as a bullish engulfing candle. The H1-15M combination traders are to flip over to the 15M chart and wait for a bullish 15 candle breaching the wave’s highest high to trigger a long entry.

You may have noticed that the price has been within the level of resistance for several candles. It means the buyers are to keep their eyes on this pair for a long time. Look at the last candle. After so many hours of waiting, the 15M chart produces a bullish candle that closes above the level of resistance. The buyers may trigger a long entry right after the last candle closes. Let us flip over to the H1 chart with Fibo levels on and find out what happens here.

The Fibo level shows that the price trends from the level of 61.8%. This is one of the levels, which usually produces good momentum. In this example, it produces a good bullish momentum after the breakout, but it takes a long time to make the breakout. The H1-15 combination traders’ patience is tested here. The buyers who wait and keep the belief that it may end up producing the signal make money out of this setup in the end. It is not easy, but this is what trading is all about. Having a belief in analysis helps a trader be a better trader.

Categories
Forex Market Analysis

Daily F.X. Analysis, June 5 – Top Trade Setups In Forex – Eyes on U.S. Non-farm Payroll! 

On the news front, it’s likely to be a busy day with most of the focus staying on the European Central Bank’s monetary policy meeting. ECB’s Main Refinancing Rate holds at 0%, and So far, the ECB isn’t expected to change it. However, we need to closely monitor the Press conference as the hawkish or dovish remarks from President Christine Lagarde can drive price action in the EUR/USD pair today. Besides, the dollar may stay supported ahead of the NFP figures coming out on Friday.

On the news front, it’s likely to be a busy day with most of the focus staying on the European Central Bank’s monetary policy meeting. ECB’s Main Refinancing Rate holds at 0%, and So far, the ECB isn’t expected to change it. However, we need to closely monitor the Press conference as the hawkish or dovish remarks from President Christine Lagarde can drive price action in the EUR/USD pair today. Besides, the dollar may stay supported ahead of the NFP figures coming out on Friday.

On the news front, it’s likely to be a busy day with most of the focus staying on the European Central Bank’s monetary policy meeting. ECB’s Main Refinancing Rate holds at 0%, and So far, the ECB isn’t expected to change it. However, we need to closely monitor the Press conference as the hawkish or dovish remarks from President Christine Lagarde can drive price action in the EUR/USD pair today. Besides, the dollar may stay supported ahead of the NFP figures coming out on Friday.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair continues to draw bids and hit above the new three-month high of 1.1370 marks as the investors continue to cheer the bigger-than-expected coronavirus emergency purchase program (PEPP) announced by the European Central Bank (ECB) on Thursday to boost the economic recovery. The ECB expanded PEPP by EUR600 billion. On the other hand, the broad-based U.S. dollar modest strength turned out to be one of the key factors that kept a lid on any additional gains in the pair, at least for now. The EUR/USD is trading at 1.1368 and consolidates in the range between the 1.1325 – 1.1377. However, the traders seem cautious to place any strong position ahead of the German Factory Orders.

At the data front, the German Factory Orders are scheduled to release at 06:00 GMT, which is expected to drop by 19.7% month-on-month in April, having fallen 15.6 in March. On an annualized basis, the industrial orders dropped by 7.4% in April. 

Despite the predictions of a sharper drop in the Factory Orders, the shared currency continues to draw bids, backed by the hopes of coronavirus emergency purchase program announced by the European Central Bank (ECB).

On the other hand, the IHS Markit’s German Purchasing Managers’ Index (PMI) for manufacturing was revised downwards to 36.6 in May from the preliminary figures of 36.8, even after it improving slightly from April’s 34.5. The Germany manufacturing sector continued to weaken last month, possibly due to the weakening demand triggered by the coronavirus pandemic. Manufacturing production was already down 7-8% from a peak in late 2017 even before the onset of the pandemic, and now that figure looks to be in the region of 25-30%,” IHS Markit reported.

The decline in the German Factory Orders by the big margin could push the EUR/USD currency pair lower below 1.1300. As well as, if the U.S. dollar takes bids on the worsening market mood, the currency pair extend further declines towards 1.1243 (5-DMA). For now, the traders are waiting for the U.S. NFP data tp drive market movement. 

Daily Support and Resistance

  • R3 1.157
  • R2 1.1466
  • R1 1.1402

Pivot Point 1.1298

  • S1 1.1233
  • S2 1.113
  • S3 1.1065

EUR/USD– Trading Tip

The EUR/USD continues to trade bullish around 1.1360, heading towards the next resistance level of 1.1450 level. The European Central Bank policy decision drove a recent jump in Euro, and now the U.S. NFP will be taking over the game during the U.S. session. So, we can expect EUR/USD to face a strong hurdle around 1.1450 level along with support level around 1.1247. The 50 EMA is suggesting bullish bias along with the MACD indicator, which is holding and forming histograms over the 0 level. Let’s look for buying positions above 1.1298 level today and selling below 1.1458. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25957 after placing a high of1.26331 and a low of 1.25005. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair rose for the 6th consecutive day on Thursday and peaked since April 30 after posting 0.5% losses on that day. The GBP/USD pair first dropped and lost ground in early trading session but managed to find support and ended its day with a bullish bias.

The selling bias in GBP was due to a lack of progress in the current round of Brexit negotiations on the future relationship. The 4th round of talks will end on Friday, and more chances for no-deal persists in the market as hopes for mutual concessions on fisheries and trade came and went throughout the talks.

However, the U.K. risk of falling to world trade organizations rule instead of having a deal with E.U. has been increased as BoE issued notice to be prepared for the worst-case scenario I,e no-deal Brexit. These fears amongst investors related t no-deal Brexit also kept the British Pound under pressure on Thursday and caused the early drop of GBP/USD pair.

Another factor involving in the downward movement of GBP/USD pair in the early trading session was the poor than expected Construction PMI from the U.K., which dropped to 28.9 in May from 29.5 of expectations and weighed on GBP.  

But in later sessions after the release of American economic data, the pair started to rise again and started following its previous day’s trend. At 17:30 GMT, the Unemployment Claims for last week were reported as 1.88M from the U.S. against the expected jobless claims as 1.82M and weighed on the U.S. dollar. The Revised Nonfarm Productivity for the quarter dropped to -0.9% against the forecasted -2.5% and weighed on the U.S. dollar. 

At 19:30 GMT, the Trade Balance also showed a deficit of 49.4B against the expected deficit of 41.5B in April and weighed on the U.S. dollar.

The weakness of the U.S. dollar on Thursday gave a push to GBP/USD, and it started to move in an upward trend again. On the other hand, racial tensions in the U.S. were calmed a bit after the three additional police officers involved in the murder of George Floyd were filed with charges. However, the unrest was primarily ignored by the market participants despite its potential impact on the U.S. elections.

Daily Support and Resistance

  • R3 1.2787
  • R2 1.271
  • R1 1.2652

Pivot Point 1.2576

  • S1 1.2518
  • S2 1.2442
  • S3 1.2384

GBP/USD– Trading Tip

On Friday, the GBP/USD continues trading bullish to reach at 1.2650 levels, having violated the triple top level on the 4-hour timeframe. The GBP/USD pair has formed an upward regression trend channel, which is supporting further buying in the Cable. 

Continuation of a bullish trend can lead to GBP/USD prices towards the next resistance level of 1.2690 level. Above this, the next resistance holds around 1.2765 level. Conversely, the support is likely to be found around 1.2605 and 1.2550 level today. Let’s look for buying over 1.2605 level ahead of NFP data today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 108.899 after placing a high of 108.980 and a low of 108.420. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair extended its previous day’s gains and rose above 108.900 level pacing a high since April 9 on the back of increased risk appetite. The risk-on market sentiment weighed on safe-haven Japanese Yen and pushed the USD/JPY pair above multi week’s highest level.

The U.S. dollar index slipped to its three-month low level due to increased global risk sentiment after the hopes for faster recovery increased due to easing lockdown restrictions. The DXY fell to 97.19 low from 97.63 on the day. Despite the drop in the U.S. Dollar Index, the pair USD/JPY managed to post gains on the back of the strong U.S. equity market.

On the other hand, China’s headlines stopped buying U.S. farm goods and were proven false after the reports suggested that Chinese state-owned firms bought U.S. soybean cargo this week. This raised the optimism that US-China worries would become less. It was also supported by the comments from U.S. Senator Grassley, who said that the US-China trade deal was on track.

Meanwhile, at 17:15 GMT, the US ADP Non-Farm Employment Change for May showed a decline in the number of jobless people to 2.76M from the forecasted 9.0M and helped the U.S. dollar to gain traction. At 18:45 GMT, the Final Services PMI from the U.S. came in line with the expectations of 37.5. At 19:00 GMT, the ISM Non-Manufacturing PMI showed a surge to 45.4 from the expected 44.2 for May and supported the U.S. dollar. The Factory orders in April were declined by 13% against the expected decline of 13.7%. Let’s brace for the U.S. Nonfarm payroll data today. 

Daily Support and Resistance    

  • R3 109.93
  • R2 109.56
  • R1 109.35

Pivot Point 108.98

  • S1 108.76
  • S2 108.4
  • S3 108.18

USD/JPY – Trading Tips

On Friday, the USD/JPY bullish bias continues to drive buying to lead the pair towards 109.350 level. The USD/JPY pair is now breaking above 109.280 level, and above this, the next target is likely to be found around 110. The 50 EMA and MACD both are supporting the buying trend in the USD/JPY pair, and it can lead the USD/JPY prices further higher today. On the lower side, the support holds around 108.640, but the recent bullish engulfing candle and upward price action in the safe haven pair can drive further buying in the USD/JPY pair. Let’s look for buying over 109 levels today. All the best for today! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 05 – Hackers Target US Universities After “Kidnapping” a Whole Town; BTC Used as Ransom

The crypto market has spent the day with low volatility as it was trying to consolidate.  Bitcoin is currently trading for $9,778, which represents an increase of 1.31% on the day. Meanwhile, Ethereum gained 0.16% on the day, while XRP lost 0.7%.

The crypto market has spent the day with low volatility as it was trying to consolidate.  Bitcoin is currently trading for $9,778, which represents an increase of 1.31% on the day. Meanwhile, Ethereum gained 0.16% on the day, while XRP lost 0.7%.

The crypto market has spent the day with low volatility as it was trying to consolidate.  Bitcoin is currently trading for $9,778, which represents an increase of 1.31% on the day. Meanwhile, Ethereum gained 0.16% on the day, while XRP lost 0.7%.

Wax took the position of today’s biggest daily gainer, with gains of 62.34%. Zilliqa lost 8.4% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased slightly since we last reported, with its value currently at 65.14%. This value represents a 0.07% difference to the upside when compared to yesterday’s value.

The cryptocurrency market capitalization increased slightly as most cryptos gained some value when compared to yesterday. The market’s current value is $277.65 billion. This value represents an increase of $2.3 billion when compared to the value it had yesterday.

What happened in the past 24 hours

NetWalker attacking US universities with ransomware

A ransomware gang called NetWalker claims to have successfully attacked three large US universities within the last seven days. They say that their latest attack was aimed against the University of California San Francisco, while that they also attacked Michigan State University and Columbia College of Chicago.

NetWalker threatened to leak all the sensitive data they have acquired in less than a week if they don’t receive a crypto payment in Bitcoin. The information came from Michigan State, Columbia College of Chicago, and UCSF themselves.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has spent the day slowly testing its support and resistance levels. After breaking the $9,735 to the upside but failing to conquer $9,870, Bitcoin started to drop in price and retest $9,735 as a support level. It has held up quite nicely so far, with no indications of BTC falling below it with this volume.


Bitcoin’s volume reduced drastically when compared to the past week, while its RSI is at 58.

Key levels to the upside                    Key levels to the downside

1: $9,870                                           1: $9,735

2: $10,010                                         2: $9,580

                                                           3: $9,250

Ethereum

Ethereum had a great little run towards the upside yesterday, passing the $240 level and trying to consolidate above it. The consolidation has continued since, with Ethereum successfully getting $240 as a support level. The 4-hour 21-period moving average seems to be holding the price above the level as well.


Ethereum’s volume drastically reduced and is almost non-existent, while its RSI level is at 56.

Key levels to the upside                    Key levels to the downside

1: $251.4                                            1: $240

2: $260                                              2: $225.4

                                                           3: $217.6

Ripple

XRP didn’t perform its consolidation, as well as Ethereum, did after a good run towards the upside they had. The third-largest cryptocurrency by market cap fell under the $0.205 level after testing its strength as a support level. However, the current increase in volume indicates that XRP might get above it once again.


XRP’s volume was mostly lower than yesterday, while its RSI level is at 50.

Key levels to the upside                    Key levels to the downside

1: $0.205                                           1: $0.2

2: $0.214                                           2: $0.19

 3: $0.227                                                        

 

Categories
Crypto Daily Topic

The Bart Simpson Phenomenon and Tuesday’s Baffling Bitcoin Drop

On Tuesday, Bitcoin looked like it would finally surge past the hotly-anticipated $10,500. However, the coin ended up plummeting by more than $800 in under only 5 minutes. The sell-off started at 9:45 a.m. ET, when the cryptocurrency was changing hands for$10,137. By 9.49 a.m., the price had dipped to $9,298. At the time of writing, the currency is trading at $9,643.51.

On Tuesday, Bitcoin looked like it would finally surge past the hotly-anticipated $10,500. However, the coin ended up plummeting by more than $800 in under only 5 minutes. The sell-off started at 9:45 a.m. ET, when the cryptocurrency was changing hands for$10,137. By 9.49 a.m., the price had dipped to $9,298. At the time of writing, the currency is trading at $9,643.51.

On Tuesday, Bitcoin looked like it would finally surge past the hotly-anticipated $10,500. However, the coin ended up plummeting by more than $800 in under only 5 minutes. The sell-off started at 9:45 a.m. ET, when the cryptocurrency was changing hands for$10,137. By 9.49 a.m., the price had dipped to $9,298. At the time of writing, the currency is trading at $9,643.51.

Price Manipulation? 

The 4-hour chart, during the period leading up to the drop, as well as the hourly, had formed what’s called the ”Bart Simpson” pattern. This pattern usually indicates probable manipulation caused by whales and institutional players. The pattern occurs when an asset rapidly shoots up or down,  followed by a sideways movement, then a violent move in the opposite direction.

What’s the Bart Simpson Pattern? 

This price action resembles the famous cartoon character Bart Simpson’s head. The name is one of many eccentric memes created by the crypto community. 

The Bart Simpson pattern phenomenon made its debut in 2018 when the Bitcoin market became a bit subdued. Volume and liquidity began to decrease due to declining interest in the cryptocurrency. 

Due to the current uncertain Bitcoin market (more on that later), the low liquidity and low volume trading environment create the perfect recipe for Bart Simpson charts to start appearing again. 

The Bart patterns also sometimes appear in the inverse, with the zig-zag formation occurring at the bottom of a sudden price move before reversing back upward.

Bart Simpson patterns are somehow unique to the Bitcoin and crypto market. And although hilarious, they are a bad sign for the market. Ordinary investors and traders mostly get burned, while big players such as whales and institutional investors go home with huge profits.

What leads to the Bart Simpson Pattern?

There’s consensus in some quarters that the pattern occurs due to a lack of liquidity in the Bitcoin market.

After the 2017 bull run, big investors liquidated their positions, with the majority of them not returning to the market. This led to the price crashing from 5 digits to 4 digits. Pump-and-dump schemes also became commonplace, and whales could sway prices with big enough orders. Add this to the sometimes artificial prices caused by trading bots – which have become popular more than ever.

Do Bart Simpson Patterns Appear in the Traditional Finance Market? 

The answer is yes, and no. Since early 2018, the cryptocurrency market started a downward trend. In January, the total crypto market capitalization was at an all-time peak of $800 billion. Through the following months, this steadily decreased. On October 23, 2018, 54% of the total market cap of the entire crypto market was Bitcoin’s. This is comparable to the market cap of companies such as McDonald’s and IBM. As you can see, it’s difficult to compare the traditional market with the crypto market, especially due to the mostly poor participants and emerging factors like regulation of the crypto market. 

Also, a market where participants can make massive orders provides a fertile playground for price manipulation. In the crypto market, investors can enter such orders due to the lack of regulation. Also, there are looser thresholds for entering the crypto market. Plus, the execution of trades in the traditional markets is more rational and controlled. For instance, there are ‘circuit breakers’ and other mechanisms that put a halt to trading as soon as certain thresholds have been reached.

There’s also the existence, in the traditional market, of financial intermediaries that help traders achieve optimized trading that does not affect prices, avoiding Bart Simpson patterns.

How Bart Simpson patterns Affect The Market

Bitcoin ETFs: Events like these, together with similar ones, are partly why the Securities Exchange Commission refuses to approve Bitcoin ETFs. The truth is that the total market is still unstable and can be easily manipulated. In a way, the crypto market is the whales’ playground. They can send the prices up or down whenever they so wish.

Miners: Price manipulation that results in Bart Simpson patterns affects miners. When prices go down, profitability does too. The money they make might not be enough to cover their costs.

Tips to Survive Bart Simpson Patterns

  • If your goal is to go long in the medium-term or long-term, these patterns will affect you less
  • If you are a short-term trader, you may consider having stop-loss orders
  • If you notice a sudden move followed by a consolidation, know that the price can quickly move the other direction

Difference on BitMEX

BitMex recorded the lowest drop, with the currency dropping to $8600. Bitstamp hit a low of  $9135. The majority of the lows were between $9350 – $9100. The dramatic difference in Bitmex could have been due to slippage and cascading liquidations. The crash caused $100 million long liquidations on the exchange.

Bitcoin’s $10,500 Surge Is Rejected Again 

This was the third time in recent months when buyers failed to take the price past the $10,500 mark. The crypto has struggled to break past the resistance level three times the past eight months. 

The number one cryptocurrency hit $10, 500 in October 2019. In 4 weeks, it had dropped to $6, 400. In February this year, the crypto attempted to surpass the level again. But it took a violent dip to $8,400, before falling even further to $3,600 in the following four weeks. 

After its failure to cross the same level for three consecutive times, Bitcoin’s investors and enthusiasts are asking themselves if the coin will break anytime soon. Many are wondering if BTC will initiate a bull trend and test even higher resistance levels of $11,500 and above. The question is even more pertinent when you consider the intensity of the falls, and how the market has shaped up generally in recent months. 

Categories
Forex Signals

EURCAD Piercing Pattern and Breakout

EURCAD has been moving in a slightly descending channel, here shown as a linear regression channel.  The last iteration of the Price drove it from the top of it to near the bottom. There, it made a double bottom figure and headed up again. After being rejected by the central regression line (dotted line), the Price retraced slightly, then, four hours ago, The Price made a piercing candlestick followed by a large candlestick that went above the last high.

EURCAD has been moving in a slightly descending channel, here shown as a linear regression channel.  The last iteration of the Price drove it from the top of it to near the bottom. There, it made a double bottom figure and headed up again. After being rejected by the central regression line (dotted line), the Price retraced slightly, then, four hours ago, The Price made a piercing candlestick followed by a large candlestick that went above the last high.

EURCAD has been moving in a slightly descending channel, here shown as a linear regression channel.  The last iteration of the Price drove it from the top of it to near the bottom. There, it made a double bottom figure and headed up again. After being rejected by the central regression line (dotted line), the Price retraced slightly, then, four hours ago, The Price made a piercing candlestick followed by a large candlestick that went above the last high.

A trade can be made with the entry at 1.5191, a stop below the recent low (1.5110), and a profit target neat the last high of 1.5374. for a reward/risk ration of over 2.

The technical factors ate in favor of the trade. The price moves above the +1 sigma line of the Bollinger bands, and the bands are heading up. Also, the Stochastic oscillator has triggered a buy signal near the oversold level.

The Setup

Buy Entry: 1.5191

Stop-loss:1.5110 or lower

Take-profit: 1.5374

Reward/Risk: 2

Dollar risk: $575 on one lot. $57.5 on a mini lot, and $5.75 on a micro lot

Dollar reward: $1,150 on a lot.

It is recommended not to go above 1 percent of your balance in a single position. Thus, traders should not take more than two micro lots for every $1000 in their trading account.

Categories
Forex Signals

USD/CAD Choppy Session Continues – Brace for Breakout! 

The USD/CAD was closed at 1.34942 after placing a high of 1.35722 and a low of 1.34798. Overall the movement of USD/CAD remained bearish throughout the day. The USD/CAD pair posted losses for the 3rd consecutive day on Wednesday amid the weakness on the US dollar due to risk-on market sentiment. The reopening of economies has boosted the expectations of faster economic recovery and provide confidence to the investors that central banks and governments were there to underpin the global economy.

The USD/CAD was closed at 1.34942 after placing a high of 1.35722 and a low of 1.34798. Overall the movement of USD/CAD remained bearish throughout the day. The USD/CAD pair posted losses for the 3rd consecutive day on Wednesday amid the weakness on the US dollar due to risk-on market sentiment. The reopening of economies has boosted the expectations of faster economic recovery and provide confidence to the investors that central banks and governments were there to underpin the global economy.

The USD/CAD was closed at 1.34942 after placing a high of 1.35722 and a low of 1.34798. Overall the movement of USD/CAD remained bearish throughout the day. The USD/CAD pair posted losses for the 3rd consecutive day on Wednesday amid the weakness on the US dollar due to risk-on market sentiment. The reopening of economies has boosted the expectations of faster economic recovery and provide confidence to the investors that central banks and governments were there to underpin the global economy.

The US Dollar Index, which measures the value of the US dollar against the basket of six currencies, fell to its lowest since mid-March at 97.19, which ultimately dragged the USD/CAD pair with itself.

Meanwhile, the Bank of Canada held its interest rates at 0.25%, which BoC said is as low as it will go. According to Bank, the Canadian economy appeared to have avoided the worst-case scenario of the COVID-19 pandemic.

The Bank also started a number of debt & bond-buying programs in order to make sure that there will be enough cash in the system. Bank announced on Wednesday that it was still buying government bonds to make sure banks have enough money to lend to creditworthy borrowers. Bank also stated that the measures taken to reduce the coronavirus crisis’s effect on improving market conditions were having their intended effect. The Bank said that it was ready to adjust these programs if the market conditions suggest so.

According to the Bank, the effect of coronavirus has likely peaked, and the expectations of second-quarter contraction could be 10-20% rather than the predictions made beforehand. On the US front, despite upbeat market data, the US dollar remained under pressure due to increased risk-on sentiment, which added in the downfall of the USD/CAD pair on Wednesday. On the crude oil front, the WTI Crude prices surged above $38 level and supported commodity-linked currency Loonie. 


The negative figure of crude oil inventories from the United States as -2.1M rose Crude oil prices and helped Loonie to find traction in the market. The strong Loonie dragged the pair USD/CAD further, and hence pair dropped for the 3rd consecutive day. However, the upbeat economic data from the United States about the ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI gave strength to the US dollar and kept a lid on additional losses of pair USD/CAD.

Daily Technical Levels

Support Resistance

1.3457 1.3552

1.3420 1.3610

1.3362 1.3647

Pivot point: 1.3515

On the technical side, the USD/CAD is trading sideways within a narrow trading range of 1.3550 – 1.3485. Breakout of this range will drive further trends in the USD/CAD pair. The bearish breakout of 1.3485 support level can open up further room for selling until the next support area of the area of 1.3395. The bullish breakout of 1.3550 level can lead the USD/CAD prices to be higher until 1.3625 and 1.3700 level, which marks 38.2% and 61.8% Fibonacci retracement levels. Let’s keep an eye on 1.3485 level to stay bullish or bearish below this level today. Good luck! 

Categories
Forex Basic Strategies

Best Way of Trading The ‘Rectangle Chart Pattern’

Introduction

Introduction

Introduction

The ‘Rectangle’ is a classical technical analysis pattern described by horizontal lines showing support and resistance levels on the price chart. This pattern resembles the concept of buying at A significant support level and selling at a predominant resistance level. The price can stay between the Rectangle pattern for a long time, or the pattern can be very small.

The appearance of this pattern implies that the supply and demand of the currency pair are in balance for an extended period. The price action finds resistance at the top of a rectangle and support at the bottom of a rectangle. The pattern can easily be recognized and confirmed after the formation of two highs and two lows. These highs and lows form two parallel lines above and below the price action. These lines act as a strong support and resistance levels to the price action.

Keep in mind that this pattern doesn’t have a bullish or bearish bias. It is a neutral pattern that shows both parties are holding an equal amount of power. Using this pattern, we can trade with the trend, or it can be used to trade the counter trend and reversals also. In short, the Rectangle chart pattern is both continuous and reversal as well. However, technical experts believe that using the Rectangle as a continuation pattern has higher odds of performing.

Trading The Rectangle Chart Pattern

Example 1

The Rectangle pattern can be easily found on the price charts, and it mostly appears on all the trading timeframes. The below chart indicates the formation of the Rectangle chart pattern on the AUD/NZD daily chart.

As discussed, there is no such thing as a bullish or bearish Rectangle pattern. When we find this pattern on any timeframe, all we need to do is to trade with the trend. We can also trade the Rectangle pattern, just like how we trade ranges.

The image below represents the same Rectangle chart pattern that is shown in the above figure but on the 240 Minutes timeframe. The orange box represents a couple of buy and sell opportunities, but we have decided only to trade this pattern with the trend. The green arrows represent our buying entry in the pair.

The below chart represents our entry and exit in the AUD/NZD Forex pair. The green arrow represents our entry in this pair, and the stop-loss is placed just below the orange box that represents the formation of this pattern. The placement of stop-loss depends on you. If you are an aggressive trader, place the stop-loss just below the entry, and the conservative traders must go for more profound stop-loss.

The take-profit placement is an art as we can exit our positions in many correct ways. You can make use of technical indicators to close the positions. When the trend loses its momentum, use the support, resistance area to close your positions. In the above example, we can see the reversed deeply as soon as we exited our position. This is because that is the place where the significant resistance line is.

Example 2.1

On the daily chart of the AUD/NZD, the below image represents the formation of two rectangle chart patterns in a downtrend.

The below image is the same rectangle pattern (1st) that is shown in the above chart but on a lower timeframe, which is 240 Minutes chart. Most of the time, we will find the Rectangle patterns in a trending market only. Also, this pattern represents the pullback phase of an ongoing trend. Another thing that a Rectangle pattern implies is that both of the parties hold equal power during the pullback phase. That is the reason for this pattern to form in the first place.

So be careful while trading this pattern because, in the consolidation phase, markets often throws a couple of spikes on the price chart. The safest way of trading this pattern is when the price action approaches at the upper area of the Rectangle. In the below chart, the Red arrow represents our selling trade in this pair.

The below chart represents our entry, exit, and risk management in this pair. The entry was at the top of the box. If you compare the stop-loss with take-profit, it clearly shows that we have opted for a smaller stop-loss, it was because the upper line of Rectangle acts as a primary resistance line. If the price action breaks the resistance line, the pattern by default gets invalid, and there is no need to hold our position. Around our take profit area, the price action started struggling, which indicates the power. Hence we decided to close our position.

Example 2.2

The below AUD/NZD Forex chart represents the formation of a Rectangle chart pattern on the 240 minutes chart. The pattern that you see below has appeared right after the previous trade that is discussed above. At times we will see these patterns consecutively, especially in a strong trending market. It is strongly recommended to go with the flow and trade them with confidence. The chart below shows that the price action spends some time in the rectangle box, and when it hits the bottom of the Rectangle, we activated our selling trade in this pair.

The chart below represents the entry, exit, and take-profit in this pair. As we can see, the entry was at the bottom of the Rectangle, and the stop-loss placement was above the Rectangle. For take-profit, we have waited for the sellers’ momentum to die out to close our trade.

Conclusion

For a Rectangle pattern to be valid, the price must have gone through at least two tops and two bottoms on the price chart. Always make sure to hold your trade till the market loses its momentum. You can also look for the formation of any candlestick patterns to exit the trades. If you activate your trade at the top of the Rectangle, make sure to place the stop-loss just above the Rectangle pattern. If the activation was after the breakout, place the stop-loss in the middle of the Rectangle range.

We hope you understood the trading of the Rectangle chart pattern. In case of any queries, let us know in the comments below. Cheers.

Categories
Forex Market Analysis

Daily F.X. Analysis, June 4 – Top Trade Setups In Forex – Eyes on ECB Policy Meeting! 

On the news front, it’s likely to be a busy day with most of the focus staying on the European Central Bank’s monetary policy meeting. ECB’s Main Refinancing Rate holds at 0%, and So far, the ECB isn’t expected to change it. However, we need to closely monitor the Press conference as the hawkish or dovish remarks from President Christine Lagarde can drive price action in the EUR/USD pair today. Besides, the dollar may stay supported ahead of the NFP figures coming out on Friday.

On the news front, it’s likely to be a busy day with most of the focus staying on the European Central Bank’s monetary policy meeting. ECB’s Main Refinancing Rate holds at 0%, and So far, the ECB isn’t expected to change it. However, we need to closely monitor the Press conference as the hawkish or dovish remarks from President Christine Lagarde can drive price action in the EUR/USD pair today. Besides, the dollar may stay supported ahead of the NFP figures coming out on Friday.

On the news front, it’s likely to be a busy day with most of the focus staying on the European Central Bank’s monetary policy meeting. ECB’s Main Refinancing Rate holds at 0%, and So far, the ECB isn’t expected to change it. However, we need to closely monitor the Press conference as the hawkish or dovish remarks from President Christine Lagarde can drive price action in the EUR/USD pair today. Besides, the dollar may stay supported ahead of the NFP figures coming out on Friday.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12334 after placing a high of 1.12577 and a low of 1.11665. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair extended its previous bullish rally for 8thconsecutive day on Wednesday and surged to its highest level since March 12 at 1.12500 level. The risk-on market sentiment continued to weigh the U.S. dollar and pushed the EUR/USD pair on an upward trend.

The U.S. Dollar Index was calm during the European trading hours at 97.50, but after the release of economic data, Index lost its traction and was dragged down. At 12:15 GMT, the Spanish Services PMI for May surged to 27.9 against the expected 24.7. At 12:45 GMT, the Italian Services PMI also exceeded the expectations of 26.2 and came in as 28.9. At 12:50 GMT, the French Services PMI for May increased to 31.1 against the expected 29.4. At 12:55 GMT, the German Final Services PMI also surged to 32.6 from 31.4 of expectations. At 13:00 GMT, the Final Services PMI for the whole Eurozone exceeded the expectations of 28.7 and came in as 30.5 to make Euro stronger against the U.S. dollar.

At 12:55 GMT, the German Unemployment Change showed that 238K people lost their jobs in April against the expectation of 188K. At 13:00 GMT, the Italian Monthly Unemployment Rate decreased to 6.3% from the expected 9.2% and supported Euro. At 14:00 GMT, the PPI for the month of April from the whole bloc was declined by 2.0% against the forecasted decline by 1.8% and weighed on Euro. However, the whole bloc’s unemployment rate was recorded as 7.3% against the expected 8.2% in April and supported Euro.

Better than expected Services PMI and Unemployment data from the whole bloc and its countries gave a push to Euro prices against the U.S. dollar and moved EUR/USD pair in an upward trend on Wednesday.

Daily Support and Resistance

  • R3 1.1362
  • R2 1.131
  • R1 1.1272

Pivot Point 1.1219

  • S1 1.1181
  • S2 1.1128
  • S3 1.109

EUR/USD– Trading Tip

The single currency Euro also took a bearish turn against the U.S. dollar to complete 61.8% Fibonacci retracement at 1.1215 level today. This level is extending solid support to the EUR/USD, and violation of this level can extend the EUR/USD pair until 1.1190 level. While above 1.1212 level, the EUR/USD can bounce off until 1.2305 level. Let’s wait for the ECB rate decision to determine further trends in the EUR/USD. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25749 after placing a high of 1.26148 and a low of 1.25448. Overall the movement of GBP/USD pair remained bullish throughout the day. Sterling rose to its five-week highest level on Wednesday, and the pair GBP/USD continued to post gains for the 5th consecutive day on the back of the risk-on market sentiment. U.S. dollar was under heavy pressure amid risk appetite despite U.S. unrest and good economic data. The recent reopening of economies from across the globe boosted investors’ confidence in global economic recovery in the second half of the year, which was also backed by the recent economic data which has already has started to show the signs of betterment.

Markets moved towards riskier assets, including GBP and hence, the pair GBP.USD gained traction in the market. At 13:30 GMT, the Final Services PMI from Great Britain surged to 29.0 from the expected 27.9 and supported Sterling. The ADP Non-Farm Employment Change reported a job loss of 2.76M against the expected job loss of 9.0M. At 19:00 GMT< the ISM Services PMI from the U.S. also increased to 45.4 from 44.2 expected.

However, the gains in GBP/USD pair remained under pressure due to looming Brexit risks after the Bank of England warned the city to prepare for no-deal Brexit. The final round of talks between the E.U. & U.K. has been started, but the chances to secure a deal are highly unlikely.

The governor of Bank of England, Andrew Bailey, told the British biggest lenders to bolster their preparations for a no-deal Brexit. He said that it was Bank of England’s duty to prepare the U.K.’s financial system for all risks that it might face. And to do so, the warning to be ready for the worst-case scenario was issued. This warning by BoE kept a lid on any additional gains in GBP/USD pair on Wednesday.


Daily Support and Resistance

  • R3 1.2684
  • R2 1.265
  • R1 1.2612

Pivot Point 1.2578

  • S1 1.254
  • S2 1.2506
  • S3 1.2468

GBP/USD– Trading Tip

The GBP/USD was trading with a bullish bias to reach at 1.2600 levels, testing the triple top level on the 4-hour timeframe. The bullish channel has driven a bearish correction in the pair, and on the 4-hour chart, the GBP/USD seems to have more potential for selling until the next support area of 1.2475 level. The MACD has also crossed below 0, which demonstrates initiation of a selling bias, and it may lead the Cable lower to 1.2479 level. Consider taking selling trades over below 1.2600 today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 108.899 after placing a high of 108.980 and a low of 108.420. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair extended its previous day’s gains and rose above 108.900 level pacing a high since April 9 on the back of increased risk appetite. The risk-on market sentiment weighed on safe-haven Japanese Yen and pushed the USD/JPY pair above multi week’s highest level.

The U.S. dollar index slipped to its three months low level due to increased global risk sentiment after the hopes for faster recovery increased due to easing of lockdown restrictions. The DXY fell to 97.19 low from 97.63 on the day. Despite the drop of the U.S. Dollar Index, the pair USD/JPY managed to post gains on the back of strong U.S. equity market.

On the other hand, the headlines of China stopped buying U.S. farm goods and were proven false after the reports suggested that Chinese state-owned firms bought U.S. soybean cargo this week. This raised the optimism that US-China worries would become less. It was also supported by the comments from U.S. Senator Grassley, who said that the US-China trade deal was on track.

Meanwhile, at 17:15 GMT, the US ADP Non-Farm Employment Change for May showed a decline in the number of jobless people to 2.76M from the forecasted 9.0M and helped the U.S. dollar to gain traction. At 18:45 GMT, the Final Services PMI from the U.S. came in line with the expectations of 37.5. At 19:00 GMT, the ISM Non-Manufacturing PMI showed a surge to 45.4 from the expected 44.2 for May and supported the U.S. dollar. The Factory orders in April were declined by 13% against the expected decline of 13.7%.

Daily Support and Resistance    

  • R3 109.71
  • R2 109.35
  • R1 109.12

Pivot Point 108.77

  • S1 108.54
  • S2 108.19
  • S3 107.96

USD/JPY – Trading Tips

The USD/JPY bullish bias violated the series of resistance levels to lead the USD/JPY currency pair towards 108.770 level. The closings of bullish engulfing and three white soldiers candlestick patterns are likely to drive further buying until 109.125 level today. On the 4 hour timeframe, the USD/JPY pair has crossed over 50 EMA and has closed a few candles above resistance become support area of 108.350, which is supporting bullish bias among traders. The USD/JPY pair may find support at 108.350 and resistance at 109.125 level while the breakout of this range will determine the next trend in the pair. Today let’s consider buying over 108.35. All the best for today!