Tag: Technical Analysis

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Crypto Market Analysis

Daily Crypto Review, Jun 04 – The US Becoming The New Mining Giant; Cryptos On The Rise

The crypto market has spent the day slowly gaining upward momentum and testing resistance levels.  Bitcoin is currently trading for $9,655, which represents an increase of 1.55% on the day. Meanwhile, Ethereum gained 3.21% on the day, while XRP gained 1.3%.

The crypto market has spent the day slowly gaining upward momentum and testing resistance levels.  Bitcoin is currently trading for $9,655, which represents an increase of 1.55% on the day. Meanwhile, Ethereum gained 3.21% on the day, while XRP gained 1.3%.

The crypto market has spent the day slowly gaining upward momentum and testing resistance levels.  Bitcoin is currently trading for $9,655, which represents an increase of 1.55% on the day. Meanwhile, Ethereum gained 3.21% on the day, while XRP gained 1.3%.

HedgeTrade took the position of today’s biggest daily gainer, with gains of 29.13%. ABBC Coin lost 4.23% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance decreased slightly since we last reported, with its value currently at 65.07%. This value represents a 0.15% difference to the downside 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 $275.19 69.53 billion. This value represents a decrease of $14 billion when compared to the value it had yesterday.

What happened in the past 24 hours

The US becoming the new mining giant

Marathon Patent Group, a US-based company, announced that it had installed 700 units of Bitcoin mining application-specific integrated circuit (ASIC) units.

According to the June 3 announcement, Marathon Patent Group has installed 700 Whatsminer M30S+ ASICs that were produced by MicroBT. On top of that, the company is reportedly waiting for a delivery from BitMain (the leading mining ASIC producer) of 1,160 AntminerS19 Pro units.

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization has spent the day slowly testing resistance levels and gaining a slight bit of value. Once the price stabilized around the $9,450 level, Bitcoin started working its way up, slowly testing and then passing the $9,580 level. It is now in the process of testing this level to determine whether it will turn into support or if the price will go back down.


Bitcoin’s volume reduced drastically when compared to yesterday, while its RSI is at 52.

Key levels to the upside                    Key levels to the downside

1: $9,735                                           1: $9,580

2: $9,870                                           2: $9,250

3: $10,010                                          3: $9,120

Ethereum

Ethereum has outperformed Bitcoin on the daily as it made more bold moves throughout the day. The second-largest cryptocurrency by market capitalization did the same as Bitcoin, just with a larger percentage gain. Its price stabilized around the $235 level before it started moving up, passing the $240 resistance and reaching $246.3. The price is now on a slight decline and possibly testing the $240 level.


Ethereum’s volume came back to below-normal levels after yesterday’s downswing, while its RSI level is at 58.5.

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 do anything to differ that much from the other two aforementioned cryptocurrencies. The third-largest cryptocurrency by market cap managed to reach past the $0.205 level after a whole day of slowly moving up. It is currently in the process of testing the level as support. XRP’s moves above $0.205 are seemingly more violent and volatile, while the moves below it are slower and more gradual.


Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

                                                           3: $0.19

 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 3 – Top Trade Setups In Forex – Brace for Advance NFP Figures! 

On Wednesday, the market is likely to exhibit sharp price actions in the wake of series of high impact economic events such as Final Services PMI, G7 Meeting, ADP Non-farm payroll, and Canadian monetary policy meetings. Most of the price action is expected to be driven by Advance Non-farm payroll figures, which are expected to perform slightly better than the previous month. It can drive buying in the U.S. dollar.

On Wednesday, the market is likely to exhibit sharp price actions in the wake of series of high impact economic events such as Final Services PMI, G7 Meeting, ADP Non-farm payroll, and Canadian monetary policy meetings. Most of the price action is expected to be driven by Advance Non-farm payroll figures, which are expected to perform slightly better than the previous month. It can drive buying in the U.S. dollar.

On Wednesday, the market is likely to exhibit sharp price actions in the wake of series of high impact economic events such as Final Services PMI, G7 Meeting, ADP Non-farm payroll, and Canadian monetary policy meetings. Most of the price action is expected to be driven by Advance Non-farm payroll figures, which are expected to perform slightly better than the previous month. It can drive buying in the U.S. dollar.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.11687 after placing a high of 1.11958 and a low of 1.11149. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair extended its bullish rally for the 7th straight day on Tuesday due to risk-on market sentiment and made the risk-sensitive Euro to outperform the U.S. dollar. The pair rose to its highest since mid-march near 1.1196.

At 11:45 GMT, the Budget Balance from the French government was issued, which showed a deficit of 92.1B. AT 12:00 GMT, the Spanish Unemployment Change was decreased to 26.6K from the expected 230.3K and supported Euro, which ultimately raised EUR/USD prices on Tuesday.

The U.S. dollar weakened against its rivals, and the U.S. Dollar Index dropped to its lowest level in12 weeks at 97.43. The weakened U.S. dollar also gave support to EUR/USD gains on Tuesday.

On Wednesday, for Euro traders, the unemployment data will be looked upon for fresh impetus. While on Thursday, the European Central Bank will announce its monetary policy decision, which will be under close watch by the investors. 

It is widely expected that ECB would extend the PEPP program to a total of 1 Trillion euros. If that happens, it would further add in the EUR/USD gains. Furthermore, on Tuesday, the European Commission started a process that could lead to reforms of drug manufacturing pharmaceuticals to limit shortages of vaccines and antibiotics and the availability of medicine more easily.

The move came in after the E.U. faced many difficulties in fighting the COVID-19 pandemic related to the healthcare shortcomings due to dependency of the bloc on foreign supplies of essential drugs and chemicals from India and China.

According to the European Commission, there was a need to build a holistic patient-centered pharmaceutical Strategy that could cover the whole life cycle of pharmaceutical products i,e from its scientific discovery to authorization and patients access.

Daily Support and Resistance

  • R3 1.129
  • R2 1.1243
  • R1 1.1208

Pivot Point 1.1161

  • S1 1.1125
  • S2 1.1079
  • S3 1.1043

EUR/USD– Trading Tip

The bullish bias of the EUR/USD pair continues to drive an upward trend in the market, as it leads to EUR/USD prices to 1.1204. The pair is likely to find immediate support around 1.1150 level, while resistance holds around 1.1236 level. The overall trend is bullish, but we can expect a slight retracement until 1.1180 level before seeing additional buying.

GBP/USD – Daily Analysis

The GBP/USD was closed at 1.25514 after placing a high of 1.25758 and a low of 1.24782. Overall the movement of GBP/USD remained bullish throughout the day. The GBP/USD pair continued its bullish track and rose for the 4th consecutive day on Tuesday and crossed a level of 1.25700 on the back of broad-based U.S. dollar weakness. Another factor in the upward rally of GBP/USD, along with the U.S. dollar weakness, was Pound’s strength due to renewed optimism in Brexit developments.

According to Brussels sources reported in The Times, U.K. was expected to signal compromises on fisheries and some trade rules if the E.U. agreed to back down from its demand for regulatory alignment and fishing access.

After this statement came into the market, the demand for British Pound increased, which raised the bars for GBP/USD pair across the board. However, the rally was on its way to posting remarkable gains but was dragged down after U.K.’s Prime Minister dismissed the report for compromising on key sticking points that have paused the progress in the post-Brexit deal.

The U.K. rather expressed its desire to take control over access to its waters and fish after the transition period ends. U.K. showed disagreement to stick with the E.U.’s Common Fisheries Policy in which fishing quotas for E.U. member states are fixed.

The official spokesman of Prime Minister Boris Johnson said that the reports suggesting that the U.K. was ready to compromise on fishing and its waters were only “wishful thinking by E.U.” The remarks added to the growing concerns over the lack of progress on negotiations. The final round of detailed negotiations took effect from today, and results will be under close observation by British Pound traders. It should be noted that if both parties failed to secure a deal or agree on a point, it would demand an extension in the transition period. But Johnson has promised not to extend this period, which will lead to no-deal Brexit.

Boris Johnson has suggested the country would accept a no-deal Brexit if London and Brussels failed to agree on new trade rules by December 31.

On the economic data front, at 11; 00 GMT, the Nationwide HPI dropped to -1.7% against the expected drop by-1.0%. 

At 13:30 GMT, the Mortgage Approvals from the U.K. came in as 16K against the expected 34K and weighed on Pound. The Net Lending to Individuals came in negative as -6.9B against the expected 1.7B. A sharp fall in U.K. Mortgage approvals in April and House price suffering kept a lid on additional gains of GBP/USD.

Daily Support and Resistance

  • R3 1.2691
  • R2 1.2634
  • R1 1.2592

Pivot Point 1.2535

  • S1 1.2493
  • S2 1.2436
  • S3 1.2395

GBP/USD– Trading Tip

The GBP/USD continues trading bullish as it has violated the double top resistance area around 1.2545 level, and now it’s testing the upward channel, which extends resistance around 1.2603. Bullish crossover of 1.2603 level is now likely to extend the buying trend until 1.2690. While the support level stays at 1.2550 today. On the 4-hour timeframe, the 50 EMA is suggesting bullish bias, and now the MACD is suggesting buying trend in the GBP/USD pair as the histograms are forming above zero levels. Consider taking buying trades over 1.2605 and selling below the same level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 108.675 after placing a high of 108.770 and a low of 107.512. Overall the movement of USD/JPY remained bullish throughout the day. The pair USD/JPY moved beyond 108.00 level and extended its gains to the fresh seven weeks high of 108.77. The increased risk appetite caused the upbeat movement of USD/JPY after the easing of lockdown measures from across the globe, which raised optimism about the quick economic recovery.

Despite the broad-based U.S. dollar weakness, the pair USD/JPY took its pace on the upside due to underpinned demand for safe-haven Japanese Yen in the risk-on market sentiment. On the other hand, the U.S. Dollar Index, which measures the value of the U.S. dollar against the basket of six currencies, fell 0.30% around 97.5 level on Tuesday.

President Donald Trump vowed to use military action against the increasing protests near the White House, which raised fears for even more disruptive economy of the United States. The protests were against the killing of an unarmed black man George Floyd in police custody two weeks ago. Other than that, China halted the purchases of U.S. Soybeans and pork on Tuesday against U.S. decision to revoke the special status of Hong Kong, which increased the ongoing tensions between the world’s two largest economies. China’s move could also lead towards the cancellation of phase one trade deal, which both parties signed in January.

On the data front, there was no economic report released by the United States on Tuesday, which left the pair at the mercy of market risk sentiment, which eventually drove the pair to 7 weeks’ highest level.

However, on Japan front, at 4:50 GMT, the Monetary Base for the year from Japan was increased to 3.9% from the forecasted 2.6% and supported the Japanese Yen. Traders will be waiting for the U.S. response against the move by China to halting the purchases of U.S. agricultural goods.

Daily Support and Resistance    

  • R3 108.33
  • R2 108.1
  • R1 107.84

Pivot Point 107.61

  • S1 107.36
  • S2 107.12
  • S3 106.87

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! 

 

Categories
Forex Price Action

The Daily-H4 Combination Trading: Do Not Only Look for Reversal Candle

The daily–H4 combination traders are to wait for the daily chart to produce a reversal candle first to look for entry. Once the chart produces a daily reversal candle, traders are to flip over to the H4 chart; wait for consolidation and an H4 reversal candle to trigger an entry. We must not forget that if the daily chart is trending, the daily-H4 combination trading strategy may offer entry as well. In today’s lesson, we are going to demonstrate an example of that.

The daily–H4 combination traders are to wait for the daily chart to produce a reversal candle first to look for entry. Once the chart produces a daily reversal candle, traders are to flip over to the H4 chart; wait for consolidation and an H4 reversal candle to trigger an entry. We must not forget that if the daily chart is trending, the daily-H4 combination trading strategy may offer entry as well. In today’s lesson, we are going to demonstrate an example of that.

The daily–H4 combination traders are to wait for the daily chart to produce a reversal candle first to look for entry. Once the chart produces a daily reversal candle, traders are to flip over to the H4 chart; wait for consolidation and an H4 reversal candle to trigger an entry. We must not forget that if the daily chart is trending, the daily-H4 combination trading strategy may offer entry as well. In today’s lesson, we are going to demonstrate an example of that.

This is a daily chart. The pair produced a bullish engulfing candle and three more bullish candles followed. The daily-H4 combination traders are to keep their eyes on the pair right after it produces that bullish engulfing candle. Let us assume on the fourth day, we flip over to the H4 chart as well.

This is how that H4 chart looks. The chart shows that after making a bullish move, the price starts having consolidation. The last candle comes out as a bearish pin bar. It seems the chart may take time to produce a bullish reversal candle to offer a long entry. Then again, we never know. It may be just around the corner.

The char produces a good-looking bullish engulfing candle closing well above 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. Let us move to the next chart to see how the trade goes.

The price consolidates again. After producing such a good-looking signal candle, it seems a bit unusual. The last candle has a bearish body but it has a long lower shadow. Be patient and see what the price does next.

Look at the last candle. It comes out as a bullish engulfing candle. This is a strong sign that the price may head towards the North now. As far as the last candle is concerned, the price may not take too long to hit the target.

As expected, the price heads towards the North with good bullish momentum. It produces only one bearish candle before hits the target. As it seems, a bearish inside bar followed by a bullish engulfing candle may push the price towards the North further. Anyway, the buyers have achieved their 1R here with ease.

The message we get from today’s lesson is that if the daily chart is trending, we may keep an eye on the H4 chart to take entries with the trend as well. If it produces a reversal candle, we may look for entries too. However, we must not look for short entries if the last daily candle is bullish and vice versa.

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 03 – Large BTC Miner Capitulation Causing The Price Drop? BTC Under $10,000 Again

The crypto market has declined and lost all the gains it made yesterday. This was all due to, allegedly, a large unknown Bitcoin miner moving and selling his coins.  Bitcoin is currently trading for $9,514, which represents a decrease of 6.12% on the day. Meanwhile, Ethereum lost 3.99% on the day, while XRP lost 4.09%.

The crypto market has declined and lost all the gains it made yesterday. This was all due to, allegedly, a large unknown Bitcoin miner moving and selling his coins.  Bitcoin is currently trading for $9,514, which represents a decrease of 6.12% on the day. Meanwhile, Ethereum lost 3.99% on the day, while XRP lost 4.09%.

The crypto market has declined and lost all the gains it made yesterday. This was all due to, allegedly, a large unknown Bitcoin miner moving and selling his coins.  Bitcoin is currently trading for $9,514, which represents a decrease of 6.12% on the day. Meanwhile, Ethereum lost 3.99% on the day, while XRP lost 4.09%.

Flexacoin took the position of today’s biggest daily gainer, with gains of 13.68%. Nexo lost 17.32% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance decreased slightly since we last reported, with its value currently at 65.22%. This value represents a 0.64% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization decreased drastically as most cryptos went back down in price when compared to yesterday’s value. The market’s current value is $269.53 billion. This value represents a decrease of $14 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Miners selling more BTC than they created

One of the largest unknown mining pools moved and sold thousands of Bitcoin, which allegedly triggered the price crash. This miner has produced 51 blocks over the past four days, earning 637.5 BTC in that period (this represents 9% of the total rewards mined in that period).

While some speculate that this mining pool is capitulating, it might be that it is only moving and selling Bitcoin as it reached the price point they want to sell at.

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization lost all of the gains it made just a day after breaking $10,000. The move towards the downside was just as sharp as the one to the upside and with even greater volume. While the price fell to $9,120 at one point, it stabilized just below the $9,580 resistance level.


Bitcoin’s volume is still elevated from the bearish move, while its RSI fell to 46.

Key levels to the upside                    Key levels to the downside

1: $9,580                                           1: $9,250

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

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

Ethereum

Ethereum followed Bitcoin’s spike yesterday as well as its collapse today. The second-largest cryptocurrency by market cap fell down to the $225.4 level before bouncing back and consolidating at above-$235 levels. Ethereum’s move towards the downside also managed to surpass the upswing in terms of magnitude as well as volume.


Ethereum’s volume came back to normal after the downswing, while its RSI level is at 52.5.

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 also had quite a violent day in terms of price movement. The third-largest cryptocurrency by market cap lost all its gains in a matter of minutes as its price fell from $0.215 all the way down to $0.197. However, the price went up slightly and started consolidating at the $0.202 level, right in between the support of $0.2 and resistance of $0.205.


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

The H1-15M Combination Trading: Waiting for an H1 Reversal Candle Ensures Better Reward

The H1 reversal candle plays a significant part in the H1-15M chart combination trading. If the traders wait to get an H1 reversal candle, by using candle’s lower low/higher high, they get a better risk-reward. In a bearish market, a trader needs to wait for an H1 bearish reversal candle after the breakout. In a bullish market, he needs to do the opposite. In today’s lesson, we are going to demonstrate an example of a bullish market where the H1-15M chart combination offers an entry upon producing an H1 bullish reversal candle. Let us get started.

The H1 reversal candle plays a significant part in the H1-15M chart combination trading. If the traders wait to get an H1 reversal candle, by using candle’s lower low/higher high, they get a better risk-reward. In a bearish market, a trader needs to wait for an H1 bearish reversal candle after the breakout. In a bullish market, he needs to do the opposite. In today’s lesson, we are going to demonstrate an example of a bullish market where the H1-15M chart combination offers an entry upon producing an H1 bullish reversal candle. Let us get started.

The H1 reversal candle plays a significant part in the H1-15M chart combination trading. If the traders wait to get an H1 reversal candle, by using candle’s lower low/higher high, they get a better risk-reward. In a bearish market, a trader needs to wait for an H1 bearish reversal candle after the breakout. In a bullish market, he needs to do the opposite. In today’s lesson, we are going to demonstrate an example of a bullish market where the H1-15M chart combination offers an entry upon producing an H1 bullish reversal candle. Let us get started.

This is an H1 chart. The chart shows that the price heads towards the North with good bullish momentum. The price, then upon finding its resistance, has been in a bearish correction. It consolidates around a level and heads towards the North. The buyers are to keep their eyes on the chart with a hope that it may make a bullish breakout.

The chart shows that the last candle makes a bullish breakout closing well above the last highest high. The buyers are to wait for the chart to produce an H1 bullish reversal candle followed by a 15M bullish candle to trigger a long entry. Let us keep watching the chart to get that H1 bullish reversal candle.

The chart shows that it produces two doji candles. It means the price has been in bearish correction at the minor charts. An H1 bullish reversal candle at the breakout level would be the ‘getting ready’ signal to go long in the pair.

Look at the last candle. The last candle comes out as a bullish candle forming at the breakout level. The buyers are waiting for the chart to produce such a candle. They may flip over to the 15M chart now. Let us flip over to the 15M chart.

The last candle comes out as a bearish inside bar. Since the H1 candle closes as a bullish candle, so a 15M bullish candle is the signal to trigger a long entry. Let us proceed to the next chart.

Here it is. The chart produces a bullish Pin Bar. The buyers may trigger a long entry right after the last candle closes. Traders may set their stop loss below the H1 bullish reversal candle’s lowest low, which is below the red-marked level. To set take profit, they may use Fibonacci levels. If the price trends from 61.8%, it usually goes up to the level of 161.8%. Let us find out how this one goes.

Yes, the price heads towards the level of 161.8% with good bullish momentum. If we flip over to the 15M chart right after the breakout, we would take entry by setting stop loss below 00.00%. By waiting for an H1 reversal candle, we may set the stop loss below 38.2%. This ensures a better risk-reward. On the other hand, if we always wait to get an H1 reversal candle after the breakout, we may not get it all the time. Thus, we end up being offered less number of entries in the H1-15M chart combination trading.

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jun 02 – Bitcoin Above $10,000; BTC Miners Selling More Than They Mine

The crypto market has spent the day making moves to the upside as Bitcoin broke $10,000.  Bitcoin is currently trading for $10,115, which represents an increase of 6.14% on the day. Meanwhile, Ethereum gained 4.96% on the day, while XRP gained 3.68%.

The crypto market has spent the day making moves to the upside as Bitcoin broke $10,000.  Bitcoin is currently trading for $10,115, which represents an increase of 6.14% on the day. Meanwhile, Ethereum gained 4.96% on the day, while XRP gained 3.68%.

The crypto market has spent the day making moves to the upside as Bitcoin broke $10,000.  Bitcoin is currently trading for $10,115, which represents an increase of 6.14% on the day. Meanwhile, Ethereum gained 4.96% on the day, while XRP gained 3.68%.

Nexo took the position of today’s biggest daily gainer, with gains of 20.30%. Flexacoin lost 12.56% 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 65.86%. This value represents a 0.24% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization increased drastically as most cryptos went up in price when compared to yesterday’s value, with its current value being $283.53 billion. This value represents an increase of $16.27 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Miners selling more BTC than they created

A report shows that Bitcoin miners sold 11% more Bitcoin than they were able to generate over the same period. The report comes from the ByteTree chain analysis portal.

According to ByteTree’s metric that tracks Bitcoin wallet addresses that are associated with miners, somewhere around 5,800 BTC was generated in the past seven days, while over 6,500 were sold by performing so-called “first spend” transactions.

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization finally broke $10,000 in an explosive attempt. After days of consolidation around the $9,300-$9,800 level, Bitcoin soared and went past many resistance levels, only to land back in the ascending trend it was in a while ago. The trend clearly keeps Bitcoins price within it (as shown on the chart), which is certainly a good thing in the short-term. However, long-term, this trend will be unsustainable. Traders can look for the exit from the trend as an opportunity to make a trade.


Bitcoin’s volume increased greatly during the spike but has since returned to normal. Its RSI level is in the overbought territory at the moment.

Key levels to the upside                    Key levels to the downside

1: $10,350                                         1: $10,010

2: $10,500                                         2: $9,870

                                                          3: $9,735

Ethereum

Ethereum followed Bitcoin’s spike and caught the train to the upside as well. The second-largest cryptocurrency by market cap managed to break the $240 resistance level and establish itself just below the $251.4 resistance, which it got rejected from overtaking.


Ethereum’s volume is currently normalizing, while its RSI level is walking on the overbought territory line.

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 do anything out of the ordinary and followed Bitcoin’s initiative towards the upside as well. The third-largest cryptocurrency by market cap is possibly creating a double top after being rejected from the $0.214 resistance level, which may open up short trades with the target of $0.205. However, traders may want to wait for confirmation in terms of volume or some other metric.


XRP’s volume increased (on average) in the past few days), while its RSI level is currently at 62.5.

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

                                                           3: $0.19

 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 2 – Top Trade Setups In Forex – Risk Sentiment Remains Mixed!

The U.S. dollar after this lost demand in the market and Wall Street’s main indexes started to move in positive territory. The U.S. Dollar Index dropped below 98, which further pushed the rising prices of EUR/USD pair on Monday.

The U.S. dollar after this lost demand in the market and Wall Street’s main indexes started to move in positive territory. The U.S. Dollar Index dropped below 98, which further pushed the rising prices of EUR/USD pair on Monday.

The U.S. dollar after this lost demand in the market and Wall Street’s main indexes started to move in positive territory. The U.S. Dollar Index dropped below 98, which further pushed the rising prices of EUR/USD pair on Monday.

On the news side, the economic calendar isn’t likely to have any high impact on economic events. Therefore, the market will wait for ADP figures tomorrow and NFP figures by the end of the week.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.11337 after placing a high of 1.11539 and a low of 1.11003. Overall the movement of the EUR/USD pair remained bullish throughout the day. On Monday, the EUR/USD pair rose for the 6th consecutive day, extended its previous day gains, and moved above 1.11500 level, which was highest since March 17.

Most major European markets were closed due to Whit Monday, which limited the trading activity for a large part of the day. Data from the United States showed that ISM Manufacturing PMI in May came in worse than expectations and weighed on the U.S. dollar. The ISM Manufacturing PMI was expected to rise by 43.6pints, but instead, it came as 43.1.

The U.S. dollar after this lost demand in the market and Wall Street’s main indexes started to move in positive territory. The U.S. Dollar Index dropped below 98, which further pushed the rising prices of EUR/USD pair on Monday.

The European Commission has approved Latvia’s support program to support tourism operators worth 800,000 euros. The tourism operators cover travelers’ repatriation costs in the context of the coronavirus outbreak. The Latvia support program was approved on March 19 and was amended on April 3 and May 8.

Furthermore, the European Commission also launched a dialogue initiative with the financial sector. The first roundtable meeting between the European Commission and the European financial sector, including business and consumer representatives, has launched. This meeting was conducted to find out the best practices to support E.U. citizens & businesses.

At the data front, at 12:15 GMT, the Spanish Manufacturing PMI came in line with the expectations of 38.3. The Italian Manufacturing PMI at 12:45 GMT exceeded the expectations of 35.5 and came in as 45.4.

Daily Support and Resistance

  • R3 1.122
  • R2 1.1187
  • R1 1.1161

Pivot Point 1.1128

  • S1 1.1101
  • S2 1.1069
  • S3 1.1042

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to prevail in the market as the EUR/USD is heading north towards the next target level of 1.1150 level. A bullish breakout of 1.1150 level may lead the pair towards 1.1220 level today while support holds around 1.1080 level. Bullish bias seems dominant today. Consider taking buying trades over 1.1140 level to target 1.1199. 

GBP/USD – Daily Analysis

The GBP/USD was closed at 1.24884 after placing a high of 1.25064 and a low of 1.23236. Overall the movement of GBP/USD pair remained bullish throughout the day. The British Pound rose to near one month high against the U.S. dollar on Monday, ahead of Brexit talks, which are scheduled on Tuesday. Market participants are cautious and fear that the U.K. and E.U. might fail to make progress on upcoming trade talks. Sterling rose above 1.2500 level, which is its highest since May 5.

The chances for any real progress in negotiations between the E.U. and U.K. are very low, and that is why GBP/USD was raised on Monday on the back of increased risk sentiment. Time for agreeing to extend the transition period by June 30 deadline is running out when the U.K. had already denied extending the transition period, the risk for no-deal Brexit increased and made investors cautious.

Market participants are buying Sterling with hope for failure in the next round of talks and catching big moves on Tuesday, and this large buying on Monday gave a push to GBP/USD pair. No-deal Brexit would further harm the already disturbed economy of Great Britain due to the coronavirus crisis, and it would make the recovery even more difficult.

Some market participants think that the increased economic growth concerns have made Britain’s bargaining power a little less, and they are waiting to place any big move. 

On the data front, at 13:30 GMT, The Final Manufacturing PMI from Britain in the month of May came in line with the expectations of 40.7. The U.S. dollar was weak across the board due to the poor-than-expected ISM Manufacturing PMI release, which came in short of expected 43.5 as 43.1 and weighed on the U.S. dollar. The weak U.S. dollar further added in the upward trend of GBP/USD on Monday.

Daily Support and Resistance

  • R3 1.2744
  • R2 1.2626
  • R1 1.256

Pivot Point 1.2441

  • S1 1.2375
  • S2 1.2256
  • S3 1.219

GBP/USD– Trading Tip

The GBP/USD continues trading bullish as it has violated the double top resistance area around 1.2545 level. Bullish crossover of this level is now likely to extend the buying trend until 1.2600, but on the way, the upward channel’s upward trendline is expected to provide resistance around 1.2560, while the support level stays at 1.2480 today. On the 4-hour timeframe, the 50 EMA is suggesting bullish bias, and now the MACD is suggesting buying trend in the GBP/USD pair as the histograms are forming above zero levels. Consider taking buying trades over 1.2510 and selling below the same level today.

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.587 after placing a high of 107.855 and a low of 107.376. Overall the movement of USD/JPY remained bearish throughout the day. The pair USD/JPY started its week on the back foot as the U.S. dollar faced pressure due to increased protests across the U.S. The U.S. Dollar Index extended its losses and moved below the handle of 98.

Thousands of protesters came out to the streets of cities around the U.S. despite curfew orders on Monday. The protests were against the killing of George Floyd, a black man in police custody. Angry protests continued nationwide a week after George Floyd’s death. Reports of looting, destruction, and firing came in from across the cities. On Monday, police used tear gas to clear a path for Donald Trump to visit a damaged church. Thousands of arrests have been made, and five deaths and millions of dollars in property damage were reported, which made investors sell the U.S. dollar, and hence, the U.S. dollar became weak across the board.

On the US-China front, the news conference of Donald Trump failed to entertain the hopes of new sanctions on China on Friday. Trump refrained from imposing new sanctions on China against the new security law on Hong Kong rather than announced to halt the U.S. relationship with WHO.

The threats of revoking phase-one trade deal, which was signed in January, are increasing day by day with the increasing tensions between China & the United States.

On the data front, at 4:50 GMT, the Capital Spending for the quarter from Japan was increased by 4.3% against the declined forecast of 5.1% and gave strength to JPY. At 5:30 GMT, the Final Manufacturing PMI for May came in line with the expectations of 38.4 from Japan. The stronger than expected data from Japan gave strength to the Japanese Yen and added in the downward pressure of the USD/JPY pair.

At 18:45 GMT, the Final Manufacturing PMI for May came in line with the expectations of 39.8. At 19:00 GMT, the closely watched ISM Manufacturing PMI fell short of expected 43.5 and released as 43.1 and weighed on the U.S. dollar.

The Construction Spending for the month fell less than expected -6.5% as -2.9% and supported the U.S. dollar. The ISM Manufacturing Prices rose to 40.8against the 40.0 of expectations and supported the U.S. dollar.

The closely watched and long-awaited ISM Manufacturing PMI fell short of expectations and weighed on the U.S. dollar resulted in a downward trend of USD/JPY at the starting day of the week.

Daily Support and Resistance    

  • R3 108.33
  • R2 108.1
  • R1 107.84

Pivot Point 107.61

  • S1 107.36
  • S2 107.12
  • S3 106.87

USD/JPY – Trading Tips

On Tuesday, the USD/JPY pair continues to trade sideways, maintaining the same trading range of 107.950 – 107.400. On the 4 hour timeframe, the USD/JPY pair has crossed below 50 EMA and has also formed a bearish engulfing candle supporting bullish bias among traders. The USD/JPY pair may find support at 107.425 and resistance at 107.900 level while the breakout of this range will determine the next trend in the pair. Today let’s consider buying over 107.400 and resistance around 107.900. All the best for today! 

 

Categories
Forex Daily Topic Forex Price Action

The Levels You Need to Pay Extra Attention

Support and Resistance are the two key factors of Forex trading. The good thing is in most cases time these levels can be guessed well earlier. By drawing support/resistance levels where the price reacts earlier,   we can spot those levels. This helps a trader set his stop loss, take profit and make a trading decision. […]

Support and Resistance are the two key factors of Forex trading. The good thing is in most cases time these levels can be guessed well earlier. By drawing support/resistance levels where the price reacts earlier,   we can spot those levels. This helps a trader set his stop loss, take profit and make a trading decision. […]

Support and Resistance are the two key factors of Forex trading. The good thing is in most cases time these levels can be guessed well earlier. By drawing support/resistance levels where the price reacts earlier,   we can spot those levels. This helps a trader set his stop loss, take profit and make a trading decision. In today’s lesson, we are going to demonstrate an example of how the previous levels where the price reacts earlier play a significant part as far as support/resistance is concerned.

Look at the chart carefully. The price makes a strong bearish move and makes an upside correction. The chart produces a spinning top followed by a bearish engulfing candle. If we consider the existent trend and candlestick pattern, it is a short signal. The question is whether it really is a short signal or not. Look at the next chart.

At the correction, one of the candles breaches through a level. This level was a level of support earlier. After being bearish, the level should work as a level of resistance. It does not. The price breaches through the level. In fact, it may work as a level of support again. If it produces a bullish reversal candle, the buyers are going to take control here.

The level seems to hold the price as a level of support. It produces two a bullish pin bar and a doji candle. If it produces a bullish engulfing candle here, the price may get bullish and head towards the North.

The chart produces a bullish engulfing candle closing well above the wave’s highest high. Let us calculate whether the buyers should go long here or not. The price makes a bullish move breaching a significant level. The price makes a bearish correction and the breakout level works as a level of support. As far as price action trading is concerned, traders may trigger a long entry right after the last candle closes.

As expected, the price heads towards the North with good bullish momentum. It gets the buyers 1R already. The last candle comes out as a bearish inside bar. The price may reverse now. However, there is still a 40% possibility that the price continues its bullish move. Let us assume that the buyers close the trade and cash in some profit.

If we consider the whole scenario, the market seems bearish in naked eyes. When we draw the significant level, it gives us a clearer picture of the breakout and correction. We, then realize that the market is actually bullish. A long entry at the pullback gets the buyers some green pips. This is what Support and Resistance (significant levels) do.

Categories
Forex Psychology

Do Not Let Your Losing Trade Chase You

Trading depends a lot on a trader’s mindset. It does not matter theoretically how strong a trader is. If he does not know how to deal with trading pressure accordingly, he will never be a successful trader. One of the biggest issues in trading is encountering losing trades. It diverts the traders’ mindset, which makes […]

Trading depends a lot on a trader’s mindset. It does not matter theoretically how strong a trader is. If he does not know how to deal with trading pressure accordingly, he will never be a successful trader. One of the biggest issues in trading is encountering losing trades. It diverts the traders’ mindset, which makes […]

Trading depends a lot on a trader’s mindset. It does not matter theoretically how strong a trader is. If he does not know how to deal with trading pressure accordingly, he will never be a successful trader. One of the biggest issues in trading is encountering losing trades. It diverts the traders’ mindset, which makes him make more mistakes and lose money in the end. We mostly choose winning trade setup in our trading lessons. However, we sometimes chose a trade setup that encounters a loss as a part of our trading psychology lesson. In today’s lesson, we are going to demonstrate a losing trade.

This is a daily chart. The price heads towards the North upon producing a C point. Look at the last candle. It comes out as a bearish engulfing candle producing right at the level, where the price had a rejection earlier. The H4-daily combination traders may flip over to the H4 chart to go short in the pair.

This is the H4 chart. The chart shows that the price heads towards the North with good bearish momentum. The sellers are to wait for the price to consolidate and produce a bearish engulfing candle to go short in the pair.

The chart produces a bullish inside bar. It seems that the chart may produce a short signal for the sellers soon. The H4-daily combination sellers must keep their eyes on the chart.

The last candle comes out as a bearish engulfing candle closing well below consolidation support. The sellers may trigger a short entry right after the candle closes. This looks like an A+ trade setup. It seems that the sellers do not have to wait too long to earn their profit.

Things do not go according to the sellers’ expectations. The chart produces a spinning top followed by a bullish engulfing candle. Some sellers may want to close their entry with some losses here. Let us assume that we let our trade run. Then, here comes the last candle. It looks good for the sellers again.

The chart produces a bullish engulfing candle again. This must be annoying for the sellers. Let us assume that we keep holding the position with the hope that it goes towards the South and hits Take Profit.

It does not. It hits Stop Loss instead. An A+ entry ends up being a losing trade. If you keep thinking about a losing trade (with your proven strategy) and do not look to find out new entry, it means a losing trade chases you much more than it should. You really have to find out a way to avoid it.

Categories
Forex Market Analysis

Daily F.X. Analysis, June 01 – Top Trade Setups In Forex – ISM Manufacturing PMI In Highlights

On Monday, the fundamentals side is likely to drive no major movement during the European session. Still, the U.S. session may offer some price action on the release of ISM manufacturing PMI figures today.

On Monday, the fundamentals side is likely to drive no major movement during the European session. Still, the U.S. session may offer some price action on the release of ISM manufacturing PMI figures today.

On Monday, the fundamentals side is likely to drive no major movement during the European session. Still, the U.S. session may offer some price action on the release of ISM manufacturing PMI figures today.

Economic Events to Watch Today

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.11032 after placing a high of 1.11450 and a low of 1.10676. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD continued its previous trend and finally crossed above 1.11 level on Friday and rose for the 5th consecutive day this week. The pair showed the longest run since late March at the end of this week on the back of Euro’s strength.

At 11:00 GMT, the German Import Prices for April were released as -1.8% against the -1.5% forecasted and weighed on Euro. The German Retail Sales dropped less than expected 12% as5.3% in April and supported single currency Euro. At 11:45 GMT, the French Consumer Spending for April was declined by 20.2% against the forecasted 14.5% and weighed on Euro. The French Prelim CPI for May dropped by0.05 from the expected drop of 0.1% and weighed on Euro.

However, the French Prelim GDP for the quarter dropped less than the expectations of 5.8% decline and came in as 5.3% and supported shared currency Euro. At 13:00GMT, the M3 Money Supply for the whole bloc surged to 8.3% from the forecasted 8.1% and supported Euro.

The Private Loans from the whole bloc for the year dropped to 3.0%from the forecasted 3.5%. At 14:00 GMT, the CPI Flash estimate for the year for the whole Eurozone came in line with the expectations of 0.1%.  

However, the Core CLPI Flash estimate of the whole bloc for the year increased to 0.9% from the expected 08% and supported Euro. The Italian CPI for May came in line with the expectations of -0.1%.

Better than expected GDP and CPI data from Eurozone gave strength to the Euro against the U.S. dollar and supported the upward trend of EUR/USD pair on Friday.

On the other hand, the United States’ economic data was gloomy and weighed on the U.S. dollar, which added in the upward movement of EUR/USD pair. At 17:30 GMT, the Core PCE Price Index for April was dropped more than the expected -0.3% as -0.4% and weighed on the U.S. dollar. Personal Spending also declined more than expectations of 12.6% decline as 13.6% in April and weighed on the U.S. dollar. The Goods Trade Balance for April showed a deficit of 69.7B against the forecasted deficit of 64.8B and weighed on the U.S. dollar. The Prelim Wholesale Inventories for April surged to 0.4% from the expected -0.5% and added in U.S. dollar weakness.

The Chicago PMI at 18:45 GMT came in as 32.3 points against 40.1 of expectations and weighed the U.S. dollar. The Revised Consumer Sentiment from the University of Michigan for May dropped to 72.3 from the expected 73.7 and weighed on the U.S. dollar. The Revised Inflation Expectations from the University of Michigan for May were reported as 3.2% from the previous 3.0%.


Daily Support and Resistance

  • R3 1.1158
  • R2 1.1141
  • R1 1.1129

Pivot Point 1.1113

  • S1 1.1101
  • S2 1.1085
  • S3 1.1073

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to prevail in the market as the EUR/USD is heading north towards the next target level of 1.1150 level. A bullish breakout of 1.1150 level may lead the pair towards 1.1220 level today while support holds around 1.1080 level. Bullish bias seems dominant today. Consider taking buying trades over 1.1140 level to target 1.1199. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.23459 after placing a high of1.23940 and a low of 1.22902. Overall the movement of GBP/USD pair remained bullish throughout the day. The pair GBP/USD reached above its two-week high level on Friday near 1.2400 level but could not stay there and dropped back to 1.2300 level. The drop in sterling was caused by the awaiting speech of U.S. President Donald Trump.

Sterling started its day on firm tone and extended its previous day’s gains on the back of broad-based U.S. dollar weakness due to poor than expected U.S. economic data release. The decline in U.S. Treasury bond yields also added to the fault of the U.S. dollar. The Chicago PMI for May dropped to 32.3 from the expected 40.1 and weighed on the U.S. dollar. The Revised Consumer Sentiment from the University of Michigan for May also dropped to 72.3 against the expected 73.7 and added negative pressure on USD.

Other than economic data, the comments from Fed Chair Jerome Powell also exerted pressure on the U.S. dollar. Powell said that the U.S. economy had crossed many red lines that had never crossed before. He also stated that the Fed was launching Main Street Lending Program, which had not used since the Great Depression. After these comments, the GBP/USD pair started to move upward.

Investors became cautious before U.S. President Donald Trump’s speech on Friday and started selling Sterling, who made the pair lose its early daily gains. However, after his speech, the pair continued its bullish trend and ended its day with a bullish candle. The heat between China and the United States was enhanced after the strong response from U.S. President Donald Trump over the new security bill in Hong Kong by China, which was highly awaited as Trump had announced it before earlier this week.

Daily Support and Resistance

  • R3 1.2388
  • R2 1.2371
  • R1 1.2358

Pivot Point 1.2341

  • S1 1.2328
  • S2 1.2311
  • S3 1.2298

GBP/USD– Trading Tip

The GBP/USD continues trading bullish as it has violated the double top resistance area around 1.2364 level. Bullish crossover of this level is now likely to extend the buying trend until 1.2458, but on the way, the upward channel’s upward trendline is likely to provide resistance around 1.2410, while the support level stays at 1.2370 today. 

On the 4-hour timeframe, the 50 EMA is suggesting bullish bias, and now the MACD is suggesting buying trend in the GBP/USD pair as the histograms are forming above zero levels. Consider taking buying trades over 1.2370 and selling below the same level today.

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.767 after placing a high of 107.894 and a low of 107.077. Overall the movement of USD/JPY remained bullish throughout the day. At 4:30 GMT, the Tokyo Core CPI for the year came in as 0.2% against -0.2% and supported the Japanese Yen. The Unemployment Rate from Japan also decreased in April to2.6% from the expectations of 2.7% and supported Yen.

However, the Prelim Industrial Production for April dropped by 9.1% against the expected drop of 5.5% and weighed on Yen at 4:50 GMT. The Retail Sales for the year from Japan also dropped by 13.7% against the expected drop of 11.2% and weighed on Yen. At 10:00 GMT, the Housing Starts for the year dropped by 12.9% against the drop of 12% expected and weighed on Yen. At 10:02 GMT, the Consumer Confidence for April increased to 24.0 from the expected 213 and supported Yen.

The increased confidence in Japan’s economy and better than expected CPI and Unemployment Rate supported Yen and made it stronger against the U.S. dollar, which dragged the USD/JPY currency pair in earlier Asian trading session on Friday.

 The pair dropped to its two weeks lowest level on Friday at 107.077 on the back of increased demand for safe-haven Yen amid escalating tensions between the U.S. and China. On Friday, the President of the United States, Donald Trump announced to revoke its relationship with WHO due to its mishandling of coronavirus pandemic. The U.S. had warned the WHO to be independent of China, change its reforms, and give it 30 days to do so. However, when on Friday, 30 days ended, and no response came back from WHO, the U.S. declared to end its relationship with it.

Trump said that the U.S.’s funds to transfer to WHO will be given to more deserving other nations where urgent help will be required. The decision came in after China issued and passed a new security bill on Hong Kong, and the U.S. said that it would retaliate.

Continue reading “Daily F.X. Analysis, June 01 – Top Trade Setups In Forex – ISM Manufacturing PMI In Highlights”
Categories
Crypto Market Analysis

Daily Crypto Review, Jun 01 – Ether and XRP making moves; McAfee Calls His Prediction Nonsense

The crypto market has spent the weekend mostly without any big moves.  Bitcoin is currently trading for $9,469, which represents a decrease of 1.75% on the day. Meanwhile, Ethereum lost 4.2% on the day, while XRP lost 1.37%.

The crypto market has spent the weekend mostly without any big moves.  Bitcoin is currently trading for $9,469, which represents a decrease of 1.75% on the day. Meanwhile, Ethereum lost 4.2% on the day, while XRP lost 1.37%.

The crypto market has spent the weekend mostly without any big moves.  Bitcoin is currently trading for $9,469, which represents a decrease of 1.75% on the day. Meanwhile, Ethereum lost 4.2% on the day, while XRP lost 1.37%.

Zilliqa took the position of today’s biggest daily gainer, with gains of 8.93%. Matic Network lost 12.56% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance decreased slightly since we last reported, with its value currently at 65.62%. This value represents a 0.77% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization increased when compared to Friday’s value, with its current value being $266.8 billion. This value represents an increase of $1.3 billion when compared to the value it had on Friday.

What happened in the past 24 hours

John McAfee on his prediction

John McAfee, a controversial cryptocurrency advocate, posted a tweet stating that his previous prediction of Bitcoin reaching $1 million a nonsense and that people who believed his prediction are absurd.

He repeated that the prediction was a joke and that the statement is ridiculous, as “If Bitcoin ever hit $1 million, it’s market cap would be greater than the entire North American Continent GDP.”

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization spent the weekend without much movement, except for the one push towards $10,000, which got shut down pretty quickly. Bitcoin is currently almost at the same place as when we last reported on Friday. It is bound within the resistance level of $9,580 and support of $9,250.


Bitcoin’s volume is slightly lower than during the past week, while its RSI is currently at 55.

Key levels to the upside                    Key levels to the downside

1: $9,580                                           1: $9,250

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

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

Ethereum

Ethereum has, unlike Bitcoin, made some moves over the weekend. The second-largest cryptocurrency by market capitalization surpassed its $225.4 resistance level, turning it into support. The push towards the upside even broke $240, but quickly returned below it. The move was accompanied by soaring volume.


Ethereum’s volume is currently normalizing, while its RSI level came back from the overbought levels and is now at 60.

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’s chart showed us quite a bit of volatility throughout the weekend. The third-largest cryptocurrency by market cap had a bull run, which broke the $0.2 resistance without any effort, $0.205 resistance with a bit of effort, and then stopped at $0.214 when the bulls ran out of steam. The price has since returned to the $0.205 levels, where XRP is fighting for whether the price will end up above or below it.


XRP’s volume increased when compared to the previous week, while its RSI level is currently at 53.5

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                                            3: $0.1785

 

Categories
Forex Fibonacci

How to Use Fibonacci Levels in the H1-15M Combination Trading

In today’s lesson, we are going to demonstrate an example of an H1 chart offering an entry. We find out how Fibonacci levels and 15-min chart help us take the entry. Let us get started.

In today’s lesson, we are going to demonstrate an example of an H1 chart offering an entry. We find out how Fibonacci levels and 15-min chart help us take the entry. Let us get started.

In today’s lesson, we are going to demonstrate an example of an H1 chart offering an entry. We find out how Fibonacci levels and 15-min chart help us take the entry. Let us get started.

This is an H1 chart. The chart shows that the price after making a strong bearish move has been making an upward correction. The chart produces a Shooting Star and creates a bearish momentum. However, the sellers are to wait for the chart to make a breakout at the lowest low of the wave. Let us proceed to the next chart to find out what the price does next.

The price keeps driving towards the South and makes a breakout at the lowest low. The breakout candle has a long lower shadow, but it closes well below the level of support. The H1-15M combination traders may flip over to the 15M chart now.

This is how the 15M chart looks. The last candle comes out as a bullish candle. The sellers are to wait for a bearish reversal candle to go short in the pair. They must concentrate hard on the chart. It is waiting time for the sellers.

The 15M chart produces a bearish reversal candle. The candle has a long lower shadow but has a thick bearish body. Moreover, the H1 chart makes a breakout, so a 15M bearish reversal candle means a lot to the sellers. The sellers may trigger a short entry right after the last candle closes. There is another equation, which we will reveal in a minute. Let’s now find out how the trade goes.

The price heads towards the South with good bearish momentum. The 15M chart shows that it consolidates now and then. The H1 chart should look much more bearish than this. Ok, here is the equation we have pointed out a bit earlier. Let us draw Fibonacci levels and find out how it may help us set our stop-loss and take-profit levels.

The Fibonacci levels show that the price trends from the level of 61.8%. It makes a breakout at the level of 100.0 and heads towards the level of 161.8. When the price trends from 61.8%, it creates an extra momentum. This is what this example shows, as well. With Fibonacci, we know where to set the take-profit level. Yes, it is to be at 161.8%. With stop-loss, you may set it above 61.8% if you are too defensive a trader. If you want to be too tight with your stop loss, you may set it between 78.6% to 100.0%. The first one offers less risk-reward, but it has a higher winning percentage. On the other hand, the second one offers excellent risk-reward but has less winning percentage. The choice is yours.

Categories
Crypto Market Analysis

Daily Crypto Review, May 29 – Bitcoin above $9,500; Goldman’s Criticism vs. Grayscale’s Optimism

The crypto market has spent the day gaining some more value, with Ethereum performing the best out of the top10 cryptos.  Bitcoin is currently trading for $9,512, which represents an increase of 4.15% on the day. Meanwhile, Ethereum gained 7.92% on the day, while XRP gained 2.24%.

The crypto market has spent the day gaining some more value, with Ethereum performing the best out of the top10 cryptos.  Bitcoin is currently trading for $9,512, which represents an increase of 4.15% on the day. Meanwhile, Ethereum gained 7.92% on the day, while XRP gained 2.24%.

The crypto market has spent the day gaining some more value, with Ethereum performing the best out of the top10 cryptos.  Bitcoin is currently trading for $9,512, which represents an increase of 4.15% on the day. Meanwhile, Ethereum gained 7.92% on the day, while XRP gained 2.24%.

Bancor took the position of today’s biggest daily gainer, with gains of 33.09%. Theta lost 6.56% 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 66.39%. This value represents a 0.02% difference to the downside when compared to yesterday’s value.

The cryptocurrency market capitalization increased when compared to yesterday’s value, with its current value being $265.5 billion. This value represents an increase of $9.18 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Goldman Sachs vs. Bitcoin investors

Goldman Sachs announced in its most recent conference call with investors that Bitcoin is not an asset class and that people shouldn’t invest in it. However, Bitcoin investors seem to not follow this advice, as the largest crypto by market cap increased from $8,800 to over $9,500 since then.

The rise may be somewhat related to recent news from Grayscale, a financial institution that believes in Bitcoin. Grayscale Bitcoin Trust analysis has shown that Grayscale has bought 150% of the newly-mined Bitcoin since the halving.

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization came back above $9,000 yesterday, only to break out again and push for $9,500 today. The move was stopped by $9,580 and Bitcoin went down slightly since. However, the outlook seems quite bullish and the possibility of breaking $10,000 in the short-term is incredibly high.


Bitcoin’s volume is returning to normal after a surge during the big price increase, while its RSI on the 4-hour chart approaches 66.

Key levels to the upside                    Key levels to the downside

1: $9,580                                           1: $9,250

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

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

Ethereum

Ethereum has finally gathered enough bullish pressure to attempt a break of a long-time resistance of $217.6. The push was successful and Ethereum is now trading at $220 after being stopped by the $225.4 resistance. This move is very important for Ethereum as it shows that its moves do not fully rely on Bitcoin’s initiative (or that even if they do, they can do better than Bitcoin).


Ethereum’s volume is above average for the whole day, while its RSI level on the 4-hour chart is at 72.3.

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’s chart shows that the third-largest cryptocurrency (XRP retook the third place from USDT with its most recent move) by market cap is in a pretty important stage. While the most recent move broke it from the loop of constantly making new lower highs, the move got stopped by the horizontal $0.2 resistance level.


XRP’s volume is higher than average for the whole day, while its RSI level is just under 60.

Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 29 – Top Trade Setups In Forex – Fed Chair Powell Speech in Focus! 

The European Commission will post May CPI (+0.1% on-year expected). The European Central Bank will publish the eurozone’s M3 money supply in April (+8.2% on-year expected). The German Federal Statistical Office will report April retail sales (-12.0% on month expected). France’s INSEE will release final readings of 1Q GDP (-5.4% on year expected) and May CPI (+0.3% on-year expected). The U.S. Commerce Department will post April wholesale inventories (-0.7% on month expected), advance goods trade balance (65 billion dollars deficit expected), personal spending (-12.8% on month expected), and personal income (-6.0% on month expected). The Market News International will release May Chicago PMI (40.0 expected). The University of Michigan will report its final data of the May Consumer Sentiment Index (74.0 expected).

The European Commission will post May CPI (+0.1% on-year expected). The European Central Bank will publish the eurozone’s M3 money supply in April (+8.2% on-year expected). The German Federal Statistical Office will report April retail sales (-12.0% on month expected). France’s INSEE will release final readings of 1Q GDP (-5.4% on year expected) and May CPI (+0.3% on-year expected). The U.S. Commerce Department will post April wholesale inventories (-0.7% on month expected), advance goods trade balance (65 billion dollars deficit expected), personal spending (-12.8% on month expected), and personal income (-6.0% on month expected). The Market News International will release May Chicago PMI (40.0 expected). The University of Michigan will report its final data of the May Consumer Sentiment Index (74.0 expected).

The European Commission will post May CPI (+0.1% on-year expected). The European Central Bank will publish the eurozone’s M3 money supply in April (+8.2% on-year expected). The German Federal Statistical Office will report April retail sales (-12.0% on month expected). France’s INSEE will release final readings of 1Q GDP (-5.4% on year expected) and May CPI (+0.3% on-year expected). The U.S. Commerce Department will post April wholesale inventories (-0.7% on month expected), advance goods trade balance (65 billion dollars deficit expected), personal spending (-12.8% on month expected), and personal income (-6.0% on month expected). The Market News International will release May Chicago PMI (40.0 expected). The University of Michigan will report its final data of the May Consumer Sentiment Index (74.0 expected).

Economic Events to Watch Today

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.10771 after placing a high of 1.10934 and a low of 1.09915. Overall the movement of the EUR/USD pair remained bullish throughout the day.

The EUR/USD pair continued its bullish streak for the 4th consecutive day on Thursday and rose near 1.1100level, highest since March 30. On Wednesday, the European Commission proposed an additional $18.2Billion for the European Union’s foreign spending as part of its COVID-19 recovery package. The proposed package gave relief to NGOs that had feared further rate cuts.

This proposal by the European Commission must be approved by E.U. states and would allocate 86 billion euros to the bloc’s development for 2021-2027. The additional resources would be drawn from the 750 billion euro recovery fund, which was also announced on Wednesday, which will be raised by borrowing on financial markets.

On the data front, the German Preliminary Consumer Price Index for May declined by -0.1% against the expected 0.1% and weighed on single currency Euro. While at 12:00 GMT, the Spanish Flash Consumer Price Index for the year came in line with the expectations of -1.0%.

The European Commission indicated that the Consumer Confidence Index in Eurozone edged higher to -18.8 from -22. Still, the Business Climate Index fell to -2.43 from -1.99 and stopped the shared currency from gathering strength against its rivals.

However, the risk-on market sentiment of the market continued to support the EUR/USD pair and weighing on the U.S. dollar. The potential coronavirus vaccines, reopening of economies across the globe, and potential risk for the second wave of corona kept the risk appetite in the market and continued weighing on the U.S. dollar. The weakness of the U.S. dollar gave a push to EUR/USD pair.

On American economic docket, the poor than expected data also kept the U.S. dollar under pressure on Thursday. The jobless claims from the United States for last week rose to 2.123M from the expected 2.1M and weighed on the U.S. dollar. At 19:00 GMT, the Pending Home Sales for April dropped more than expectations and weighed on the U.S. dollar. The actual figure came in as -21.8% against the expected -15%. The closely watched Prelim GDP for the quarter from the United States also weighed on the U.S. dollar when it was released as -5.0% against the expected -4.8%. The EUR/USD pair rose to its 12 weeks highest level on the back of broad-based U.S. dollar weakness on Thursday.

Daily Support and Resistance

  • R3 1.122
  • R2 1.1157
  • R1 1.1117

Pivot Point 1.1054

  • S1 1.1014
  • S2 1.0951
  • S3 1.0911

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to prevail in the market as the EUR/USD is heading north towards the next target level of 1.1150 level. The pair have already violated the triple top resistance level of 1.09985, and bullish crossover of 1.1146 level may lead the EUR/USD prices further higher towards 1.12118 level. The closing of three white soldiers in the daily timeframe is also supporting an upward trend in the market.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.23222 after placing a high of 1.23443 and a low of 1.22336. Overall the movement of GBP/USD pair remained bullish throughout the day.

According to the policymaker of Bank of England, Michael Saunders, easing too much rather than easing a little by Bank of England was easier in response to the coronavirus pandemic. He said that the U.K. was at risk of relatively slow recovery than other countries from the coronavirus crisis, and it could prove damaging to the U.K.’s economy.

On Thursday, Saunders added that if Bank of England failed to add more stimulus measures in the economy, than it could slip the economy into an “inflation trap.” Saunders was one of two policymakers of BoE that wanted an expansion inn asset purchases in May. While the other majority wanted to wait, though accepted, more stimulus would be required.

The first speech of Saunders after COVID-19 was encouraging the central bank to cut interest rates to a record low of 0.1%, increase the bond-buying, and boost the capital. However, in response to his speech, British Pound came under pressure on Thursday and fell by 0.2%. On the other hand, the U.S. dollar also remained weak during the day because of risk-on market sentiment along with the poor economic data. The broad-based U.S. dollar weakness overshadowed the drop in GBP and raised the GBP/USD pair.

The closely watched Prelim GDP for the second quarter from the United States was dropped by -5.90% against the expected drop by -4.8% and weighed on the U.S. dollar. At 17:30 GMT, the Unemployment Claims from last weeks also reported higher than expectations of 2100K as 2123K and weighed on the U.S. dollar. At 19:00 GMT, the Pending Home Sales for April also declined by 21.8% against the expected decline by 15%.

Despite reopening all 50 states from coronavirus induced lockdowns, unemployment claims still showed higher than expected figures, which resulted in the broad-based U.S. dollar weakness on Thursday.

On Brexit front, the final round of talks between the U.K. & E.U. before a summit in June will be held next week. Because of the last negotiations that went bad after the exchange of letters between the British negotiator, David Frost, and his E.U. counterpart, Michel Barnier, the hopes for the success of final round talks have decreased. This has raised the bars for no-deal Brexit possibility.

U.K. Prime Minister, Boris Johnson will travel to Brussels for talks with European leaders next month to attempt to revive the negotiations. The two sides were still far apart on fisheries, and the U.K. has said that it would abandon the talks if “shape of a deal” has not emerged by the end of June. The U.K. traders will keep an eye onus data and Brexit updates for further actions.

Daily Support and Resistance

  • R3 1.259
  • R2 1.2477
  • R1 1.2405

Pivot Point 1.2292

  • S1 1.222
  • S2 1.2107
  • S3 1.2035

GBP/USD– Trading Tip

On Friday, the GBP/USD is trading with a slightly bullish bias, facing a double top resistance area around 1.2364 level. Bullish crossover of this level may extend the buying trend until 1.2458. On the 4-hour timeframe, the 50 EMA is suggesting bullish bias, and now the MACD is suggesting buying trend in the GBP/USD pair as the histograms are forming above zero levels. 

Today, the Sterling may find immediate support around 1.2245 levels along with resistance at 1.2360 while the closing of candles above the 1.2360 level may drive buying until 1.2450 level. The violation of support is likely to push the cable further lower until 1.2160 level. Consider taking buying trades over 1.2162 and selling below the same level today.

USD/JPY – Daily Analysis

The USD/JPY currency pair extended its previous 2-days winning streak. They rose to 107.90 marks mainly due to the risk-on market sentiment, which undermined the Japanese yen’s safe-haven demand and exerted some bullish impact on the currency pair. On the other hand, the broad-based U.S. dollar weakness turned out to be one of the main factors that kept a lid on any additional gains in the pair. At this particular time, the USD/JPY currency pair is currently trading at 107.83 and consolidating in the range between 107.69 and 107.91.

However, the reason for the upbeat market sentiment could be attributed to the recent optimism about a possible COVID-19 vaccine and hopes of a global economic recovery, which eventually sent the currency pair higher.

Despite the bullish trend in the currency pair, the USD/JPY pair held well within a near two-week-old trading range. The reason behind the confined trading range could be the escalating tensions between the U.S. and China relations, which kept investors cautious about placing any strong position.

The intensifying tension between the United States and China was further bolstered by the U.S. Secretary of State Mike Pompeo’s statement in which he denied Hong Kong’s special status and said that it was no longer autonomous from China. 

At the USD front, the broad-based U.S. dollar erased its previous day gains and slipped 0.16% to 98.900 on the day due to the rise in Asian shares and U.S. stock futures, which eventually limited the additional gains in the pair. Whereas, The U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.16% to 98.900 by 11:26 AM ET (4:26 GMT). 

Daily Support and Resistance    

  • R3 108.39
  • R2 108.16
  • R1 107.86

Pivot Point 107.63

  • S1 107.33
  • S2 107.1
  • S3 106.79

USD/JPY – Trading Tips

The safe-haven Japanese yen continues to gain bullish momentum in the wake of increased safe-haven appeal for JPY, and it’s dragging the USD/JPY pair lower at 107.120. The odds of selling in pair remains strong as the pair is likely to drop towards the next support level of 106.850. The recent strong selling candle also suggests odds of further selling in the USD/JPY pair today. 

All the best for today! 

Categories
Forex Videos

The Forex BCI Indicator! Step Up Your Trade Game!

https://youtu.be/ojFfu-y8dO8

https://youtu.be/ojFfu-y8dO8

Fundamental Analysis For Novices Business Climate Indicator

Welcome to the educational video where in this session, we will be looking at Fundamental Analysis For Novices!

 

The Business Climate Indicator or BCI

So what is it, and how does it affect currency trading? Trading is a multifaceted and multi-layered business machine. Now just because the majority of new forex traders hardly ever bother with fundamental analysis, which, incidentally, is why over 70% fail, in institutional trading, traders will look closely at all fundamental indicators, of which the BCI is an important one. These institutions also have professional economists and analysts looking at this kind of data and relaying their findings to the trading desk, who will act on the views of the analysts. In essence, you are up against these teams when you trade, so it is better to be knowledgeable on such subjects in order to more fully understand price action.

Manufacturing is the process of taking raw materials, substances, and components and turning these into finished products that can be sold in the marketplace, both at home and abroad. There are many ways that analysts look at the health of a nation, but the BCI is a key barometer. It looks at the development conditions of the manufacturing sector.
In the Euro area, a sample of 23 thousand companies representing all sectors within manufacturing, including automotive vehicles and parts, planes, trains, transportation equipment, machinery, electrical sector, chemicals. Energy, construction, food industry, textiles, and consumer goods. Millions of people are employed in this sector.
Each month respondents are asked, during a brief prearranged phone call, five key questions: the number of new orders, for domestic and export consumption, production volumes, their inventories for the last three months, and their outlook for production volumes. The respondents are also asked if the situation has improved, deteriorated, or remained the same.
The results are converted into a unit measurement and released to the market at set times, subject to an embargo.


In the combined Eurozone BCI, numbers above 0 suggest increased confidence in near future business performance, and numbers below 0 indicate pessimism towards future performance. The minus numbers in this chart reflect the devastating effect that the coronavirus pandemic has had on manufacturing recently.
So, how to use this information when trading currencies. Quite simply, the worse the number, the worse the economic outlook for a country. However, keep an eye out for the release of this information in your economic calendar. And note, that the eurozone comprises 27 countries all releasing their individual BCI each month, and where 19 countries are using the Euro as their currency. Therefore, If you see sharp, unexpected moves in the BCI release, wait for the big guns to set trend direction and then jump on it according to your own trading methodology.

Categories
Forex Signals

BTCUSD: Consolidation after double bottom

Bitcoin made a high-volume bullish candle after a double bottom touching the lower edge of its bullish channel. After bouncing off of its 200-SMA has created a consolidation channel in which you see two engulfing candles, after a bounce from the 50% level of the initial bull candlestick.

Bitcoin made a high-volume bullish candle after a double bottom touching the lower edge of its bullish channel. After bouncing off of its 200-SMA has created a consolidation channel in which you see two engulfing candles, after a bounce from the 50% level of the initial bull candlestick.

Bitcoin made a high-volume bullish candle after a double bottom touching the lower edge of its bullish channel. After bouncing off of its 200-SMA has created a consolidation channel in which you see two engulfing candles, after a bounce from the 50% level of the initial bull candlestick.

On the other hand, the Stochastic RSI indicator is in its lower side of the range, ready to make a crossover to upper levels. Thus, instead of waiting for the $9,300 break, we could test the strength of the market and make a spot order at the current levels with a relatively tight stop 100 pips under the current level and see if the strength shown continues.

The channel shown is a linear regression channel, with the edges separated + and – two sigmas from the real regression line. Thus a bounce off the -2-sigma edge means a value buy and a progression towards the consensus, or fair price, which is represented by the regression line shown in dotted gray/red. This action is a high probability event in this kind of mean-reverting market, such as is happening with Bitcoin. Moreover, the trade goes with the main upward trend. Thus the target is set conservatively below that level, at 9,740.

The levels

Buy entry: 9,203

Invalidation level: 9042

Profit Target: 9,741

Risk: $100 on each BTC purchased

Reward: $540 on each BTC purchased

Reward/Risk: 3.34

Categories
Forex Daily Topic Forex Price Action

Double Top-Engulfing Combination and Trade Management

In today’s lesson, we are going to demonstrate an example of daily-H4-combination trading. The trade setup starts with a double top, and the trend-initiating candle comes out as a bearish engulfing candle. The price consolidates and produces another bearish engulfing candle closing below consolidation support. We find out what happens next and how we may manage the trade to get the best result out of it.

In today’s lesson, we are going to demonstrate an example of daily-H4-combination trading. The trade setup starts with a double top, and the trend-initiating candle comes out as a bearish engulfing candle. The price consolidates and produces another bearish engulfing candle closing below consolidation support. We find out what happens next and how we may manage the trade to get the best result out of it.

In today’s lesson, we are going to demonstrate an example of daily-H4-combination trading. The trade setup starts with a double top, and the trend-initiating candle comes out as a bearish engulfing candle. The price consolidates and produces another bearish engulfing candle closing below consolidation support. We find out what happens next and how we may manage the trade to get the best result out of it.

This is an H4 chart. The chart shows that the price produces a double top. At the second rejection, the reversal candle comes out as a bearish engulfing candle and drives the price towards the South with good bearish momentum. Upon finding its support, it consolidates for a while and produces another bearish engulfing candle. We know what the daily-H4 combination traders are to do here.

The daily-H4 combination traders may trigger a short entry right after the last candle closes by setting stop-loss above consolidation resistance and by setting take profit with 1R. Let us proceed to the next chart to find out what the price does after triggering the entry.

The next candle comes out as a bearish candle as well. It looks good for the sellers. It seems the price may not take too long to hit the target of 1R. Let us proceed to the next chart.

It does not look good for the sellers now. The last candle comes out as a bullish engulfing candle. It suggests that the price may get bullish and hit the stop loss. Since this is an H4 chart, traders are to manage their trades according to the candlestick. The entry is carrying a loss now. Traders have three options here.

  1. They may close the whole entry
  2. They may let the whole trade run
  3. They may close 50% of the entry

It depends on an individual trader how he likes to manage his trades. Some traders may want to keep the whole trade, and some may want to close the whole trade. There is a saying that cut your losses short and let your profit run. Thus, we may manage the trade by closing half of it and let the rest of it run. This is how we earn or lose 50% of the initial target. Let us see how it goes now.

The chart produces a spinning top and heads towards the downside. The last candle comes out a hammer, but it hits the target of 1R. This means the trade setup brings profit for the sellers. It may have gone another way round. Thus, in such a situation, taking out half of the trade offers us less profit but less loss as well in the end. It does not always happen. However, when it does, we may consider managing the trade by doing it so.

Categories
Forex Market Analysis

Daily F.X. Analysis, May 28 – Top Trade Setups In Forex – Prelim GDP In Highlights!  

On the news front, the U.S. GDP figures will remain the main highlight of the day. It’s expected to be weak, which may drive weakness in the U.S. dollar. The durable goods orders are also likely to come out during the U.S. session and may drive bullish bias in gold and bearish trend in USD.

On the news front, the U.S. GDP figures will remain the main highlight of the day. It’s expected to be weak, which may drive weakness in the U.S. dollar. The durable goods orders are also likely to come out during the U.S. session and may drive bullish bias in gold and bearish trend in USD.

On the news front, the U.S. GDP figures will remain the main highlight of the day. It’s expected to be weak, which may drive weakness in the U.S. dollar. The durable goods orders are also likely to come out during the U.S. session and may drive bullish bias in gold and bearish trend in USD.

Economic Events to Watch Today

 

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.10090 after placing a high of 1.10307 and a low of 1.09337. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair followed its previous day’s move and posted gains on Wednesday for the 3rd consecutive day on the back of new plans of European Union to borrow 750 billion euro to aid economic recovery. The pair EUR/USD climbed to its highest level of 1.10307 since early April on Wednesday.

The European Union unveiled its plans for a 750 billion euros recovery fund, which would help the region to face the worst economic crisis since the 1930s. The total of 750 billion euros includes 500 billion euros in grant and 250 billion euros in loans to member states. However, this plan still requires the backing of all 27 member states, which is more than the Franco-German proposal worth 500 billion euros that was revealed last week.

If member states approve the proposal, some funds will take effect from 2020, but the most significant portion of the proposal would come next year when the first bonds were issued. However, some market participants raised concerns about the lack of details on how the bonds issued will finance the funds.

The proposal was announced ahead of the European Central Bank’s monetary policy meeting, which is due next week, which will provide the bloc’s economic outlook in coronavirus crisis. The proposal lifted the demand for a single currency across the board and supported EUR/USD prices.

Furthermore, on Wednesday, the President of European Central Bank, Christine Lagarde, said that the 19 member euro area economy would likely contract by 8%-12% this year. She said that the previously estimated contraction in the Eurozone economy was recorded as 5%, which has probably become outdated now. She added that Eurozone might be somewhere between medium and severe scenarios.

In April, ECB estimated that the euro area’s GDP could fall by between 5% and 12% in 2020 due to the coronavirus pandemic, which had medium scenario as 8% contraction. This was depended on the duration of containment measures and the effectiveness of policies and measures to diminish the crisis.

Lagarde also announced that European Central Bank would soon publish a fresh forecast about GDP in early June. On the other and, U.S. dollar faced some pressure on Wednesday, and after dropping to its lowest level in 23 days at 98.72, the U.S. dollar Index raised beyond 99.00 and settled there in late session.

The U.S. economic data showed that the Richmond Fed Manufacturing Index advanced to -27 in May from -53 of April and beat the market expectations of-47. This supported the U.S. dollar across the board ad limited the EUR/USD pair’s gains on Wednesday.

Daily Support and Resistance

  • R3 1.1126
  • R2 1.1061
  • R1 1.1021

Pivot Point 1.0956

  • S1 1.0915
  • S2 1.0851
  • S3 1.081

EUR/USD– Trading Tip

The EUR/USD pair continued to exhibit bullish bias, having violated the triple top resistance level of 1.1004 level. Bullish crossover of the triple top-level is likely to drive more buying in the pair. On the higher side, the EUR/USD prices may head further towards 1.1056 resistance while the next resistance holds around 1.1139. The EUR/USD pair may find immediate support at 1.0995 and 1.0975 level.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.22601 after placing a high of 1.23538 and a low of 1.22041. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair dropped sharply on Wednesday on the back of speculations over Bank of England, potentially cutting interest rates into negative territory and lost near 1% on the day after reaching a high of 1.2353. 

Sterling’s mood was generally soured after the comments of chief economist Andy Haldane and Governor Andrew Bailey, who seemed to put the possibility of negative interest rates on the table.

According to Haldane, the consequences of Britain’s banks and lenders’ negative interest rates were the key factors for the Bank of England to consider before making any decision. Haldane said that reviewing and doing were different things, and Bank of England was currently in review phase and has not reached on doing phase yet.

Last week, Governor Andrew Bailey also said that he was less opposed to the negative interest rates given the coronavirus crisis’s circumstances. He also said that there were mixed reviews in the market about the experience of other central banks’ negative interest rates.

On Tuesday, Haldane said that some of the data came in just a shade better than the “scenario for the economy,” which was published by BoE earlier this month. Haldane added that risks remained there that the recovery could be slower as companies and consumers were still cautious because of the possible second wave of coronavirus.

Apart from possible negative interest rates, the Brexit trade agreement’s lack of progress also added to the downward movement of Pound on Wednesday. The United Kingdom has refused to extend the transition period beyond the end of the year, which has increased the odds of a no-deal Brexit, which has exerted negative pressure on British Pound.

However, there were reports on Tuesday that the E.U. might give up its demand for access to the U.K.’s fishing waters to push the paused trade negotiations between the U.S. & E.U. On the U.S. dollar front, the U.S. Dollar Index rose beyond 99.00 and settled there in late session on Wednesday and added the daily losses of GBP/USD pair.

Daily Support and Resistance

  • R3 1.259
  • R2 1.2477
  • R1 1.2405

Pivot Point 1.2292

  • S1 1.222
  • S2 1.2107
  • S3 1.2035

GBP/USD– Trading Tip

The GBP/USD slipped lower after facing resistance around 1.2360 level, which was extended by an upward channel. On the 4-hour timeframe, the 50 EMA is still bullish, but the MACD is suggesting odds of selling bias in the GBP/USD pair as the histograms are forming below zero levels. Today, the Sterling may find immediate support around 1.2225 level while the closing of candles above this level may drive buying until 1.2300 and 1.2360 level. While the violation of support is likely to push the cable further lower until 1.2160 level. Consider taking buying trades over 1.2162 and selling below the same level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.714 after placing a high of 107.945 and a low of107.364. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair surged on Wednesday on the back of the increased mixed market sentiment; the market participants were caught between the opening up of global economy from COVID-19 lockdown and the pressure of the second wave of the virus, emerging trade wars and the long term effects of Hong Kong fight.

On Wednesday, the cold war between China & the U.S. escalated after U.S. Secretary of State; Mike Pompeo reported the U.S. congress that Trump administration no longer consider the status of Hong Kong autonomous from China.

The decision to revoke the Hong Kong autonomous status from China by the United States came in against the new security law introduced by China recently. The law will be presented to the Chinese Parliament on Thursday for approval.

The relation between China and the United States was already disturbed due to the U.S. allegations on China about the spread of coronavirus pandemic and pressuring WHO to refrain it from taking any early action to combat the virus. China has denied such allegations and blamed them back on the U.S. that it was covering its failure to contain the virus by blaming it on China. The safe-haven demand increased after this news, and Japanese Yen gained traction, which kept a lid on any additional gains of the pair USD/JPY.

Daily Support and Resistance    

  • R3 108.39
  • R2 108.16
  • R1 107.86

Pivot Point 107.63

  • S1 107.33
  • S2 107.1
  • S3 106.79

USD/JPY – Trading Tips

The USD/JPY prices continue to trade sideways within a narrow trading range of 107.899 – 107.650 level. We may see further trends in the USD/JPY pair as soon as this trading range gets violated. On the higher side, a bullish breakout of 108.450 level while bearish breakout of 107.650 level can lead USDJPY prices lower to 107.350. Let’s look for choppy trading until the trading range gets violated. 

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, May 28 – “We Are All Satoshi” – Craig Wright Exposed?

The crypto market has spent the day trying to reach new highs (and mostly succeeding in doing that).  Bitcoin is currently trading for $9,229, which represents an increase of 4.22% on the day. Meanwhile, Ethereum gained 3.04% on the day, while XRP gained 1.67%.

The crypto market has spent the day trying to reach new highs (and mostly succeeding in doing that).  Bitcoin is currently trading for $9,229, which represents an increase of 4.22% on the day. Meanwhile, Ethereum gained 3.04% on the day, while XRP gained 1.67%.

The crypto market has spent the day trying to reach new highs (and mostly succeeding in doing that).  Bitcoin is currently trading for $9,229, which represents an increase of 4.22% on the day. Meanwhile, Ethereum gained 3.04% on the day, while XRP gained 1.67%.

Electroneum took the position of today’s biggest daily gainer, with gains of 17.25%. Theta lost 0.97% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased quite a bit since we last reported, with its value currently at 66.41%. This value represents a 0.74% difference to the upside when compared to yesterday’s value.

The cryptocurrency market capitalization increased when compared to yesterday’s value, with its current value being $256.32 billion. This value represents an increase of $7.2 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Craig Wright exposed?

The Kleiman estate legal team has announced that they have submitted evidence of 145 addresses so far claimed by Craig Wright are not controlled by him at all. They said that the new evidence proves the “CSW Filed List” is definitively not a list of Wright’s Bitcoin addresses, but instead a “purposeful fabrication” by Wright.

May 24 brought us a Bitcoin transaction signed by the private keys that belong to one of the CSW filed list addresses, saying, “Craig Steven Wright is a liar and a fraud. He doesn’t have the keys used to sign this message … We are all Satoshi.”

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization came back above $9,000 yet again as bulls came into the market. The price increase was most likely caused by the confirmation that the message sent from one of the CSW list addresses (which is supposedly owned by Satoshi Nakamoto) claiming that he is a fraud.


Bitcoin’s volume returned to normal after a surge during the big price increase, while its RSI on the 4-hour chart approaches 61.

Key levels to the upside                    Key levels to the downside

1: $9,250                                           1: $9,120

2: $9,580                                           2: $8,980

3: $9,735                                            3: $8,820

Ethereum

Ethereum has spent the day following Bitcoin’s initiative and pushing towards the upside. The second-largest cryptocurrency by market capitalization managed to reach $209 before losing momentum. While the uptick Ethereum has made is good, the fact that ETH has created another lower high does not look well as far as mid-term analysis is concerned.


Ethereum’s volume doubled during the uptick, while its RSI started reverting after reaching the value of 58.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP’s chart looked a lot like Ethereum’s chart yet another time. The fourth-largest cryptocurrency by market cap has created another lower high after a move up that brought it (briefly) to just above $0.2. However, the movement lost momentum, and XRP seems to be in a downturn at the moment.


XRP’s volume increased to several times its average during the uptick but quickly returned to its average levels. Its RSI on the 4-hour chart is currently at 54.

Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Signals

GBPJPY Bearish Engulfing after double top at the upper edge of the descending channel

GBPJPY has been moving in a descending channel since April 10. The action created a lot of volatility, driving prices back and forth from top to bottom of the channel. The last iteration drove its price to surpass the upper limit, a +2 sigma event, which means the pair was overpriced if we compare it with what we may call the fair price, which is the linear regression channel, the red mid-line.

GBPJPY has been moving in a descending channel since April 10. The action created a lot of volatility, driving prices back and forth from top to bottom of the channel. The last iteration drove its price to surpass the upper limit, a +2 sigma event, which means the pair was overpriced if we compare it with what we may call the fair price, which is the linear regression channel, the red mid-line.

GBPJPY has been moving in a descending channel since April 10. The action created a lot of volatility, driving prices back and forth from top to bottom of the channel. The last iteration drove its price to surpass the upper limit, a +2 sigma event, which means the pair was overpriced if we compare it with what we may call the fair price, which is the linear regression channel, the red mid-line.

After the double top, a large bearish engulfing candle was drawn, confirming the reversal signal; thus, we can set up a short trade with entry at the current level, an invalidation point beyond the last top and a target at the projected linear regression point. The Reward/risk ratio of 2 is a conservative value that will ensure our long-term profitability.

Key levels:

Short-Entry:132.175

Take.profit:130.575

Stop-Loss: 132.965

Reward Ratio: 2.03

Risk:735 USD per lot, 73.5 USD per mini-lot.

Reward: 1,491USD per lot, 149 USD per mini-lot.

Position sizing: 2% Risk equals 3 micro-lots for every $1,000 balance in the trading account.

Categories
Forex Elliott Wave

Advanced Applications in Wave Analysis – Part 2 of 4

Introduction

Introduction

Introduction

As we commented in previous articles that cover the corrective structures, R.N. Elliott considers its study as a key to understand the current market situation and what to expect for the next path.

In this educational article, we expand the observations of the flat and the zigzag pattern.

Corrective Patterns in Action

In the first part of this four-part series, we commented that impulsive waves create trends. Corrective waves correct or retrace the progression of the trending movement developed by the motive waves. A corrective structure will never appear in a wave 1, 3, 5, in a wave A and C of a zigzag, and wave C of a flat pattern.

The Flat Pattern

The flat pattern develops different variations depending on the strength of the trend or the level of complexity of the correction in progress. In its fundamental nature, the flat follows an internal sequence as 3-3-5.

On the other hand, variations in the flat pattern surge in the extensions of its waves B and C. In brief words, as wave B extends more than the 100% of wave A, wave C will tend to be short. And the lesser the retrace of wave A by wave B, the larger wave C will be.

  1. Failure in B. This case represents the scenario when wave B retrace between 61.8% and 81% the progress of wave A. If wave B extends beyond 81%, it means that the market is temporarily weak. Wave B will fail when the wave A be a double zigzag or a double combination. Wave C will tend to retrace the advance of wave B entirely. This variation could appear in waves 2, 4, A, B, or inside a horizontal triangle in its legs C, D, or E.
  2. Failure in C. This type of failure tends to occur when wave A experiences a complete or almost complete retracement made by wave B. When the price movement fails in wave C, the market shows a signal against the dominant trend. In this context, this pattern will appear in a terminal sequence. Wave C duration will be shorter than wave B and will show a similar duration than wave A. This variation could arise in waves 2, 4, A, B, or the wave 5 of a terminal impulsive wave.
  3. Regular. This formation is the typical flat pattern. Wave B retraces at least 81% of wave A, and wave C will advance wave B entirely. Also, this wave could extend between 10% and 20% beyond the end of wave A. In this variation, wave B will tend to be a complex structure, and its extension in time will be longer than waves A and C. The regular flat could rise in waves 2, 4, A, B, or in waves C, D, or E in a terminal impulsive wave.
  4. Double Failure. This scenario is infrequent; however, the double failure occurs when wave B to retrace beyond 81% of wave A, and wave C doesn’t extend beyond 100% of wave A. The double failure variation will look like a contracting triangle. Finally, this scenario will tend to appear in waves 2, 4, in wave A inside of a triangle or an irregular flat. When it happens in a wave B, it could belong to a zigzag, a regular on in an extended flat.
  5. Extended. This configuration occurs when wave C advance reaches between 138.2% or beyond 161.8% of wave B. Waves A and B must be similar in terms of price and time. This variation should tend to appear in waves 1, 3, or 5 as an impulsive terminal wave. In waves A, B, C, or D in a horizontal triangle, or wave E of an expanding triangle.
  6. Irregular. This is the most straightforward variation of the flat pattern. At the same time, it isn’t easy to find it in the real market. This pattern is indicative of the strength of the previous move. Wave B must be higher than wave A in price. Generally, wave C will be equal to wave A in price and time relation. This variation tends to appear in waves 2, 4, in wave B before the extended wave C of a flat, or as the wave B in a zigzag when wave C moves beyond 161.8% of wave A.
  7. Continuous. This correction is the most powerful variation of the flat pattern. This type of formation tends to imply volatile movements of the same degree. The continuous flat pattern tends to emerge in the second wave after an extended third wave. When it appears in the fourth wave, this variation could occur before a fifth extended wave. In a wave B, it surges before an extended wave C; in a triangle pattern, it could happen in the a-b-c series, or in a wave B of a zigzag that forms a triangle structure.

The following figure represents the seven flat pattern variations.

The Zigzag Pattern

The main difference between zigzag and flat pattern is that zigzag does not have a wide variety. The central aspect to take in consideration with the zigzag pattern is the extension of wave C compared with wave A, and the subdivisions number of wave C compared with wave A.

  1. Wave A. This wave must have an impulsive structure; this means that its internal structure must contain five segments. The A wave of a zigzag formation shouldn’t experience a retrace beyond 61.8% by wave B. If the wave B retraces beyond 61.8%, this could be indicative that the market is developing a complex correction as a double zigzag or a double combination.
  2. Wave B. This wave must show a corrective structure with three segments in its construction. As stated earlier, its progression should not go beyond 61.8% of wave A. This wave never will present a continuous correction. If this situation occurs, then the zigzag moves inside a triangle pattern. In this case, the zigzag will be the second wave of an impulsive sequence. Consequently, if this scenario occurs, then the wave B could not be a complex corrective structure as a double or triple zigzag, nor any other type of combination of corrective structures.
  3. Wave C. This part of the zigzag pattern contains five internal segments. Its extension could be from 61.8% to 161.8% of wave A.

Conclusions

In this educational article, we presented the variations of the flat pattern and the zigzag. These variations can provide a significative clue to the wave analyst respecting to the market situation and what to expect for the following sessions.

In the next educational article, corresponding to the third part of the advanced applications in wave analysis, we will present the variations in the triangle pattern.

Suggested Readings

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

Daily Crypto Review, May 27 – BTC Transaction Fees Down More Than 50%

The crypto market has spent the day slowly testing out immediate support and resistance levels.  Bitcoin is currently trading for $8,836, which represents a decrease of 1.28% on the day. Meanwhile, Ethereum lost 0.37% on the day, while XRP gained 0.08%.

The crypto market has spent the day slowly testing out immediate support and resistance levels.  Bitcoin is currently trading for $8,836, which represents a decrease of 1.28% on the day. Meanwhile, Ethereum lost 0.37% on the day, while XRP gained 0.08%.

The crypto market has spent the day slowly testing out immediate support and resistance levels.  Bitcoin is currently trading for $8,836, which represents a decrease of 1.28% on the day. Meanwhile, Ethereum lost 0.37% on the day, while XRP gained 0.08%.

SOLVE took the position of today’s biggest daily gainer, with gains of 15.32%. Theta Fuel lost 10.48% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance decreased quite a bit since we last reported, with its value currently at 65.77%. This value represents a 0.34% difference to the downside.

The cryptocurrency market capitalization decreased when compared to yesterday’s value, with its current value being $249.12 billion. This value represents a decrease of $0.87 billion when compared to the value it had yesterday.

What happened in the past 24 hours

BTC transaction fees

After spiking to Feb 2018 level-highs just a week ago, the average Bitcoin transaction fee has dropped by more than 50%.

The data shows that Bitcoin’s average fee fell from $6.65 on May 20 all the way down to $3.07 on May 25, representing a nearly 54% decrease.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization had quite a slow day of testing its support and resistance levels. As it failed to break $8,980 resistance line, Bitcoin started dropping towards the downside and only stopping at the $8,650 support level. However, the bounce from the $8,650 level was strong enough to put Bitcoin back to where it was, practically nullifying all efforts made by both the bulls and the bears.


Bitcoin is still trading between the $8,820 support and $8,980 resistance. Breaking above the resistance level could trigger another strong push towards the upside, while a break below the support is less valuable as a signal (unless accompanied by a strong volume and goes below $8,650).

Key levels to the upside                    Key levels to the downside

1: $8,980                                           1: $8,820

2: $9,120                                           2: $8,650

3: $9,250                                            3: $8,000

Ethereum

Ethereum has spent most of the day dropping towards the $198 support line and testing its strength. The level held strong, and ETH bulls came in and picked up the slack and struck when bears were weakened from the push. Ethereum has, over a couple of hours, managed to reach $205 levels.


Ethereum’s volume is still incredibly small, while its RSI is in the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP’s chart looked a lot like Ethereum’s chart yet again. The price has fallen slightly as bears tried to take over the market, but it then corrected to the upside and came back to the previous levels. Out of the three cryptocurrencies we are covering, XRP was the only one that ended up in the green today.


XRP’s volume decreased slightly when compared to yesterday, while its RSI stayed just below the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 27 – Top Trade Setups In Forex – ECB President Lagarde Speaks! 

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the basket of 6 currencies, but it started to erase its daily gains in late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the basket of 6 currencies, but it started to erase its daily gains in late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the basket of 6 currencies, but it started to erase its daily gains in late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.09821 after placing a high of 1.09956 and a low of 1.08913. Overall the movement of EUR/USD remained bullish throughout the day. On Tuesday, EUR/USD prices surged and recovered its previous three days’ losses and regained strength in the market on the back of the renewed risk-on market sentiment. The risk appetite after easing of lockdown throughout the world gave strength to the riskier assets like EUR/USD pair and rose them across the board.

The rising hopes for potential coronavirus vaccine added in the risk sentiment and increased expectations for a quick economic recovery. A bid pharmaceutical company, which was the first to make the Ebola vaccine revealed its plans on Tuesday and said that it was working on two potential vaccines and one drug to cure the virus’s infection. The CEO of the company was cautious that it might take a long time to deliver vaccines across the globe.

This raised optimism around the market and raised the bars for riskier assets and moved EUR/USD pairs to recover its previous day’s losses.

On the other hand, in the economic docket, EUR found extra support after the German Consumer Climate from Gfk came in as -18.9 against the expectations of -19.1.

Furthermore, the European Central Bank said that the coronavirus pandemic had amplified the existing vulnerabilities of the financial sector, which will make Eurozone banks face significant losses.

ECB reported that the pandemic had caused one of the sharpest economic contraction in recent history. Still, a wide range of policy measures has been proved helpful in averting a financial meltdown.

Daily Support and Resistance

  • R3 1.1126
  • R2 1.1061
  • R1 1.1021

Pivot Point 1.0956

  • S1 1.0915
  • S2 1.0851
  • S3 1.081

EUR/USD– Trading Tip

On the 4 hour timeframe, the EUR/USD pair is testing triple top level, which is providing resistance around 1.0995 level. Closing of candles below this level may drive selling trades until 38.2% Fibonacci retracement level of 1.0970, and below this, the next support holds around 1.0920, which marks 61.8% Fibonacci area. Overall, 1.0995 is a crucial trading level as above this; the EUR/USD pair may lead it’s prices further higher towards 1.1137. Bullish bias seems dominant today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.23373 after placing a high of 1.23630 and a low of 1.21807. Overall the movement of GBP/USD pair remained bullish throughout the day. The Pound outperformed on Tuesday and rose to a level 1.236 highest since May 12 on the back of raised optimism about the EU-UK trade deal.

The next round of Brexit talks are due next week, and there have been headlines revolving that British negotiators could seal their first victory in next talks with the E.U. Reports suggested that the European Union was willing to shift its stance on fisheries in the next round of talks with Great Britain next week. If that happens, it would be a significant concession from the bloc in talks with the U.K. on their new relationship after Brexit.

The fisheries were important to the E.U. as most of the fishing takes place in U.K. waters, but the catch goes to E.U. fishers. U.K. wanted to ensure that after Brexit, which will take effect from next year, the U.K. as a newly independent coastal state could be solely in control of its waters and fish.

So far, the European Union has been reluctant to give up U.K. waters and demanded the things to remain the same as they were before in fisheries. However, on Tuesday, an E.U. official said that the bloc’s executive committee, which will negotiate with the U.K. in the name of all 27 E.U. member states, could ease its demand if the U.K. were to move as well.

According to Michel Barnier, surrendering the access to Britain’s fishing waters would be just one of the costs the British government must pay for a trade deal with the bloc. However, he faced pressure from other officials not to surrender to Britain too soon.

Daily Support and Resistance

  • R3 1.259
  • R2 1.2477
  • R1 1.2405

Pivot Point 1.2292

  • S1 1.222
  • S2 1.2107
  • S3 1.2035

GBP/USD– Trading Tip

The GBP/USD prices traded sharply bullish soaring from 1.2200 level to place a high around 1.2360 level. The resistance level of 1.2360 is extended by an upward channel, which can be seen on the 4-hour timeframe. The 50 EMA is bullish, but the MACD is suggesting odds of selling bias in the GBP/USD pair, perhaps because the Sterling is in the overbought zone. Bullish crossover of 1.2360 level may lead Sterling prices further higher towards 1.2460, while support is likely to be found around 1.2289 and 1.2165. Consider taking buying trades over 1.2292 and selling below the same level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.539 after placing a high of 107.921 and a low of 107.399. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair showed a bearish trend on Tuesday but consolidated in a range between 107.3 and 107.9.

At 18:00 GMT, the Housing Price Index for March from the United States was dropped to 0.1% against the forecasted 0.6% and weighed on the U.S. dollar. The S&P/CS Composite-20 HPI for the year advanced to 3.9% against the expectations of 3.4% and supported the U.S. dollar. At19:00 GMT, the Consumer Confidence from Conference Board for May decreased to 86.6 from the forecasted 87.1 and weighed on the U.S. dollar. The New Home Sales for April were recorded as 623K against the expected 429K and supported the U.S. dollar.

The closely watched Consumer Confidence from the United States declined and made the U.S. dollar weak across the board and ultimately dragged the USD/JPY pair on Tuesday. From the Japanese side, at 4:50 GMT, the Services Producer Price Index (SPPI) for the year was dropped to 1.0% against the forecasted 1.3%and weighed on Japanese Yen. At 9:30 GMT, All Industrial activities for March came in line with the expectations of -3.8%. At 10:00 GMT, the Core CPI for the year from Bank of Japan also dropped to -0.1% from the expected 0.0% and weighed on Japanese Yen.

The Governor of Bank of Japan, Haruhiko Kuroda, said that the central bank was ready to ease monetary policy further. To add more stimulus measures, the bank decided to expand its loan programs, cut the rates further, and ramp up the risky asset purchases. In his semiannual testimony to parliament, Kuroda said that Bank of Japan was ready to do whatever it can to ensure markets were stable. He added that the stability of markets was its first importance now because once the pandemic was over, Japan’s economy could resume a solid recovery path.

Daily Support and Resistance    

  • R3 108.39
  • R2 108.16
  • R1 107.86

Pivot Point 107.63

  • S1 107.33
  • S2 107.1
  • S3 106.79

USD/JPY – Trading Tips

The USD/JPY pair continues to trade choppy sessions within the same trading 107.950 – 107.350. Above 107.950 level, we may see USD/JPY prices heading towards the next resistance level of 108.330. The 50 EMA is currently supporting the USD/JPY around 107.350. Breakout of USD/JPY support area of 107.35 can lead the USD/JPY prices towards 106.850. So let’s consider taking buying trades over 107.63 and selling below the same level today. 

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, May 26 – Tether (USDT) now Third-Largest Cryptocurrency by Market Cap; XRP Down to Fourth

The crypto market has spent the day trying to slowly regain the lost value. However, most of the cryptocurrencies failed in doing so, which triggered a small pullback.  Bitcoin is currently trading for $8,893, which represents an increase of 0.52% on the day. Meanwhile, Ethereum lost 0.4% on the day, while XRP lost 0.06%.

The crypto market has spent the day trying to slowly regain the lost value. However, most of the cryptocurrencies failed in doing so, which triggered a small pullback.  Bitcoin is currently trading for $8,893, which represents an increase of 0.52% on the day. Meanwhile, Ethereum lost 0.4% on the day, while XRP lost 0.06%.

The crypto market has spent the day trying to slowly regain the lost value. However, most of the cryptocurrencies failed in doing so, which triggered a small pullback.  Bitcoin is currently trading for $8,893, which represents an increase of 0.52% on the day. Meanwhile, Ethereum lost 0.4% on the day, while XRP lost 0.06%.

THETA took the position of today’s biggest daily gainer, with gains of 16.53%. Theta Fuel lost 19% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased quite a bit since we last reported, with its value currently at 66.11%. This value represents a 0.22% difference to the upside.

The cryptocurrency market capitalization decreased when compared to yesterday’s value, with its current value being $249.89 billion. This value represents a decrease of $5.87 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Tether

Tether (USDT) has managed to overtake Ripple’s XRP and became the third-largest cryptocurrency by market capitalization. Ripple has, as a consequence, fell to fourth place.

While many explain this event with XRP’s failure to gain adoption amongst retail investors, Tether’s insane volume, as well as constant total market cap additions, made this “dethroning” event possible.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization tried to recover from its most recent bear push which brought it under $9,000. It tried to revitalize and go for the $9,000 push even though the volume was quite low. As expected, the move got stopped at $8,980 and Bitcoin retraced to $8,820, where the support stopped the move.


Bitcoin is currently trading between the $8,820 support and $8,980 resistance. Breaking above the resistance level might trigger another strong push up, while a break below the support has less of a chance of turning into a sharp move down.

Key levels to the upside                    Key levels to the downside

1: $8,980                                           1: $8,820

2: $9,120                                           2: $8,650

3: $9,250                                            3: $8,000

Ethereum

Ethereum has, after bouncing from the $198 level, started to recover and gain a bit of value slowly. However, the most recent Bitcoin move stopped Ether from freely rising even more, triggering a stagnation (or a slow retracement) phase.


Ethereum’s volume is incredibly small, while its RSI is in the middle of the value range, both suggesting that there is no independent move on the horizon.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP’s chart looked a lot like Ethereum’s chart in the past couple of days. The now-fourth-largest cryptocurrency by market cap was slowly rising towards its $0.2 resistance, when it was stopped by Bitcoin’s retracement after failing to break $9,000. XRP retraced just slightly, and is already stabilizing.


XRP’s volume decreased slightly when compared to yesterday, while its RSI stayed in the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 26 – Top Trade Setups In Forex – CB Consumer Confidence Ahead

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the basket of 6 currencies, but it started to erase its daily gains in late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the basket of 6 currencies, but it started to erase its daily gains in late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the basket of 6 currencies, but it started to erase its daily gains in late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

Economic Events to Watch Today

 

   

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.08964 after placing a high of 1.09144 and a low of 1.08702. Overall, the EUR/USD pair showed a null movement on Monday as the open and closed levels were almost the same.

On Monday, the EUR/USD pair moved in a tight range between 1.087 to 1.089 while managed to cut earlier losses and touched 1.091 level. The upbeat movement in the previous trading session on Monday for the pair was due to the German IFO Business Climate, which came in favor of EUR for May. 

At 11:00 GMT, the German Final GDP for the quarter came in line with the expectations of -2.2% and had null-effect on the currency pair. However, at 13:00 GMT, the German IFO Business Climate, which measures the business conditions and expectations from Eurozone, was released as 79.5 against the expectations of 78.3 and April’s 74.2. The Index rebounded from the expectations and recovered from its worst decline in April on the reopening of Europe’s largest economy, which boosted corporate hopes.

At 17:56 GMT, the Belgian NBB Business Climate was dropped by 34.4 points against the expected decline of 29.7 and April’s 36.1. The more than expected decline in Belgian Business Climate weighed on EUR currency and dragged down the pair EUR/USD in late sessions.

In the meantime, the pair kept looking at U.S. dynamics for near term directions with the latest US-China & Hong Kong conflict which has reduced the importance of coronavirus development as the primary driver of global price action.

In this time, when investors are cautious about adding to their equity holdings because of the uncertain conditions of the post-lockdown world, Germany’s IFO institute survey for May granted some relief to them.

The lockdown measures introduced in mid-March have put the global economy on track for a recession this year. In recent weeks, the world’s market has only been held up due to the stimulus measures taken by central banks. 

EUR remained steady on Monday near 1.09 level and recovered from earlier losses, as the focus of market participants shifted to the proposal the European Commission will release on Wednesday.

On Wednesday, the European Central Bank’s president Christine Lagarde will speak, and traders will be looking at it for fresh bids along with the EMU’s Consumer Confidence & Advanced Inflation data from Eurozone. On Tuesday, Consumer Confidence by the Conference Board is due to release. The Claims & Durable Goods Orders will be published on Thursday later this week.

Daily Support and Resistance

  • R3 1.0965
  • R2 1.094
  • R1 1.092

Pivot Point 1.0895

  • S1 1.0875
  • S2 1.085
  • S3 1.0829

EUR/USD– Trading Tip

The EUR/USD pair is on a bullish run, trading over 1.0914 level, having violated the horizontal resistance level of 1.0914 level. Above 1.0914, we may see the EUR/USD prices heading further higher towards the next resistance area of 1.0590. The EUR/USD pair had completed 50% Fibonacci retracement at 1.0885 and has bounced off over this level. For now, the pair is holding over 50 EMA, which is also suggesting the chances of a bullish trend continuation. We should consider taking buying positions over 1.0894 today while selling should be preferred only below this level. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.21752 after placing a high of 1.22034 and a low of 1.21637. Overall the movement of GBP/USD pair remained flat throughout the day. The GBP/USD pair remained flat and moved on a consolidating range on Monday as investors were cautious about the relaxation of lockdown measures, which gave a push to equities while ding the U.S. dollar demand.

On Monday, the Prime Minister of the U.K. instructed officials to draw up plans to reduce the involvement of Huawei Technologies Co in the U.K.’s fifth-generation mobile networks in the wake of the COVID 19 outbreak.

Johnson gave his officials instructions to draw up plans for reducing China’s involvement in the 5G infrastructure of the U.K. to a scale of zero by 2023. It looks like China’s pandemic handling has triggered calls from U.K.’s PM to rethink having closer ties with China.

In January, the U.K.’s government decided to give Huawei a limited role in 5G wireless networks and fiber. PM Johnson has amicable ties with U.S. President Donald Trump, and it looks like Johnson has taken this step to improve his relationship with the U.S.

Furthermore, on Brexit front, the trade negotiations between E.U. & U.K. have been negative for Sterling throughout the session and will likely remain the same in the coming days. The chances for hard-Brexit have increased as the UK-EU transition period is coming closer day by day, and there are no signs of any deal happening sooner. However, calls to extend the transition period have made due to pandemic; this decision will have to be made by June 30. But PM Johnson and negotiating team from the U.K. has so far been unequivocal that no extension would be made.

Johnson had articulated the Brexit deal with a clear timeline and has promised not to make any changes or compromise or bow to pressure for an extension. The deadline to call for an extension is coming up next month, and this has exerted downside pressure on GBP.

In the absence of any macroeconomic data from the U.K. and U.S. side due to bank holiday, the pair GBP/USD remained flat on Monday and continued its previous moves.

Daily Support and Resistance

  • R3 1.225
  • R2 1.2227
  • R1 1.2209

Pivot Point 1.2186

  • S1 1.2167
  • S2 1.2145
  • S3 1.2126

GBP/USD– Trading Tip

On Tuesday, the GBP/USD prices continue to trade in line with our previous forecast as the sideways trading range remains intact. The overall trading range remains 1.2170 – 1.2270. In the 4 hour timeframe, we can see a symmetric triangle pattern, which is exhibiting indecision among traders. On the downside, the GBP may gain support against the U.S. dollar around 1.2170 level, and violation of this level may extend selling until the next support area of 1.2080. Consider taking buying trades over 1.2186 and selling below the same level today.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.704 after placing a high of 107.780 and a low of 107.556. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair fluctuated in a tight range of 15 pips because of the absence of American traders for Memorial Day.

On Monday, Japanese Prime Minister Shinzo Abe lifted the coronavirus state of emergency in Tokyo and other areas. The nationwide end of restrictions and reopening of businesses were to take effect as of Monday.

The Japanese PM also introduced a new plan for a new stimulus package to support the businesses and Japan’s economy hit by the COVID-19 pandemic. Abe said that Japan has managed to bring the epidemic under control, and the exit from it was in sight. However, this announcement from Abe had little to no impact on JPY’s movement against its rival currencies.

Meanwhile, on the US-China relation front, China’s move to impose a new security law on Hong Kong has escalated concerns about the stability of the city and global trade prospects, which upset the United States and thus, US-Sino relation worsen even more.

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the six currencies. Still, it started to erase its daily gains in the late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

Furthermore, the USD/JPY pair moved very little on Monday amid thin trading conditions. At the same time, the U.S. dollar Index remained flat near 99.80 level throughout the day as investors showed no interest in the greenback. Moreover, the market participants will be looking at the release of the Corporate Service Price Index and All Industry Activity Index from Japan on Tuesday. From the American side, the Fed National Activity Index and New Homme Sales & C.B. Consumer Confidence data will be under consideration.

Daily Support and Resistance    

  • R3 108.03
  • R2 107.91
  • R1 107.8

Pivot Point 107.68

  • S1 107.57
  • S2 107.45
  • S3 107.35

USD/JPY – Trading Tips

On Tuesday, the USD/JPY continues following the same technical setups that we spoke about on a previous day. The pair is still trading choppy, but it’s peaking out of tight trading range of 107.630 – 107.350. Above 107.650 level, we may see USD/JPY prices heading towards the next resistance level of 108.130. The ascending triangle pattern was already violated, and the upward trendline is expected to keep the USD/JPY supported around 107.350. Breakout of USD/JPY support area of 107.35 can lead the USD/JPY prices towards 106.850. So let’s consider taking buying trades over 107.68 today. 

All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 25 – Top Trade Setups In Forex – Memorial Day Holiday! 

On Monday, the U.S. stock markets will be closed to observe the Memorial Day holiday. The U.K. stock markets will be closed for the Spring Bank Holiday. The German Federal Statistical Office will post final readings of 1Q GDP (-2.3% on year expected). Germany’s IFO Business Climate Index for May will be released (78.5 expected).

On Monday, the U.S. stock markets will be closed to observe the Memorial Day holiday. The U.K. stock markets will be closed for the Spring Bank Holiday. The German Federal Statistical Office will post final readings of 1Q GDP (-2.3% on year expected). Germany’s IFO Business Climate Index for May will be released (78.5 expected).

On Monday, the U.S. stock markets will be closed to observe the Memorial Day holiday. The U.K. stock markets will be closed for the Spring Bank Holiday. The German Federal Statistical Office will post final readings of 1Q GDP (-2.3% on year expected). Germany’s IFO Business Climate Index for May will be released (78.5 expected).

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD dropped 0.4% to 1.0902. European Central Bank’s latest monetary policy accounts showed that officials agreed that “a swift V-shaped recovery could probably already be ruled out at this stage” and “the Governing Council would have to stand ready to adjust the Pandemic Emergency Purchase Program and potentially other instruments if it saw that the scale of the stimulus was falling short of what was needed.”

During the previous week, the FOMC minutes failed to impress the market as there was no surprise element in the presentation of the Powell presentation and was ignored by market participants. It was widely expected that the coronavirus outbreak would continue to weigh on the economy, and the economic outlook would remain somewhat pessimistic. Greenback holds onto its losses as there was no room for surprises in the minutes of the meeting. 

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies.

Furthermore, the latest Franco-German proposal for a 500 euros fund to fight coronavirus crisis helped EUR pair to gain traction in the market and remain stronger than other currencies; this ultimately supported the upward trend of EUR/USD pair.

Later today, the U.S. stock markets will be closed to observe the Memorial Day holiday. The U.K. stock markets will be closed for the Spring Bank Holiday. The German Federal Statistical Office will post final readings of 1Q GDP (-2.3% on year expected). Germany’s IFO Business Climate Index for May will be released (78.5 expected).

Daily Support and Resistance

  • R3 1.1067
  • R2 1.1038
  • R1 1.0994

Pivot Point 1.0965

  • S1 1.092
  • S2 1.0892
  • S3 1.0847

EUR/USD– Trading Tip

The EUR/USD prices are holding at 1.0840 as these were facing strong resistance around 1.0993, which marks the triple top resistance level and can trigger selling in the pair. Conversely, the EUR/USD pair may find support around 1.0853, as the 1.0993 level is already violated. The MACD is recently forming selling candles, which suggests the trend of the sale in the pair. So the overall trading range can be from 1.0924 level to 1.0856. Today, we can look for selling trades under 1.0915 for 40/50 pips profit. 

GBP/USD – Daily Analysis

The GBP/USD lost 0.5% to 1.2166. Official data showed that U.K. retail sales declined 18.1% on month in April (-15.5% expected). The GBP/USD pair continued to follow its previous day’s trend of downward movement and dropped during the previous week. The decline in currency pair could be attributed to the increasing speculations that the Bank of England will consider to ease monetary policy further. The Governor of Bank of England, Andrew Bailey, said that he had changed his position into negative interest rates given the crisis.

On the other hand, the broad-based U.S. dollar posted major weight on the GBP. As the U.S. dollar flashed green and took bids due to multiple reasons, most were concerned with global trade relations. The U.S. and China trade tussle further fueled by China’s action to impose new Hong Kong security law. Whereas, The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.19% to 199.593 by 11:44 PM ET (4:44 AM GMT). The U.S. dollar will likely continue its bullish bias during the weekend if the geopolitical tensions remain the same, keeping the currency pair under pressure.

The BoE Governor Andrew Bailey hinted on Wednesday that the Bank of England was thinking about introducing negative interest rates in more than 300 years of history, which instantly weighed on the GBP and turned out to be one of the major factors that kept a lid on any gains in the pair.

Looking forward, the U.S. stock markets will be closed to observe the Memorial Day holiday. The U.K. stock markets will be closed for the Spring Bank Holiday.

Daily Support and Resistance

  • R3 1.232
  • R2 1.2285
  • R1 1.2255

Pivot Point 1.222

  • S1 1.219
  • S2 1.2155
  • S3 1.2124

GBP/USD– Trading Tip

On Monday, the Cable is finding hurdle around 1.2269 marks, and it extends to form a doji and bearish engulfing beneath 1.2269 zones, which has lead a bearish correction in the Cable. On the downside, the GBP may gain support against the U.S. dollar around 1.2170 level. The MACD and 50 EMA are supporting selling bias in the pair. The bullish breakout of 1.2270 level can lead the Sterling prices towards 1.2360. While breakout of the support level of 1.2169 may lead the Sterling pair towards the 1.2080 support zone. 

USD/JPY – Daily Analysis

The USD/JPY was flat at 107.63. The Bank of Japan announced plans to start a new 75 trillion yen lending program in June, to support coronavirus-hit businesses while keeping its benchmark rate at -0.1% and 10-year government bond yield target at about 0% unchanged. Meanwhile, it is reported that the Japanese government is finalizing a new Y100 trillion coronavirus relief package.

While explaining the key factor behind the risk-off market sentiment, the already intensified conflict between the United States and China further bolstered by the Zhang Yesui warning to the United States that China will strongly defend its U.S. does anything to undermine China’s core interests. Besides, China’s decision to impose new Hong Kong security law further fueled concerns about a major US-China tussle that underpinned Japan’s safe-haven status and excreted downside pressure on the currency pair.

On the other hand, the upticks in the safe-haven Japanese yen were further bolstered by the Bank of Japan’s decision to leave its monetary policy unchanged during the unscheduled meeting held this Friday. As well as, the Japanese central bank announced targeted loans for small and mid-sized firms in order to control the negative impact caused by the coronavirus pandemic.

However, the broad-based U.S. dollar is performing the pair’s role and helping the pair to limit its losses. After using the very harsh word from US-China, investors turned to the safe-haven dollar, which tried to exert some positive impact on the currency pair. Whereas, The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.19% to 199.593 by 11:44 PM ET (4:44 AM GMT). Moving on, the U.S. dollar will likely continue its bullish bias during the weekend if the geopolitical tensions remain the same.

Daily Support and Resistance    

  • R3 108.21
  • R2 108.04
  • R1 107.83

Pivot Point 107.65

  • S1 107.44
  • S2 107.26
  • S3 107.05

USD/JPY – Trading Tips

The USD/JPY continues trading sideways in between 107.630 – 107.350. Above 107.650 level, we may see USD/JPY prices heading towards the next resistance level of 108.130. The ascending triangle pattern was already violated, and the upward trendline is expected to keep the USD/JPY supported around 107.350. Breakout of USD/JPY support area of 107.35 can lead the USD/JPY prices towards 106.850. So let’s consider taking buying trades over 107.350 today. 

All the best for today! 

Categories
Forex Elliott Wave

Advanced Applications in Wave Analysis – Part 1 of 4

Introduction

Introduction

Introduction

The Elliott wave theory applied in financial markets allows the wave analyst to support its forecasting process and make a decision in the investment stage.

This educational article corresponds to the first of four parts, which aim to help understand the current market position. In particular, we’ll present the impulsive waves and its variations.

Impulsive Waves in Action

The impulsive movements appear only in advance positions. In consequence, waves 2, 4, b, d, or x, will never be part of a motive wave. The wave analyst can find motive waves in only two market stages, in a trend structural series or when the markets develop a terminal sequence.

Trending Impulsive Waves

  1. First Extended Wave. When the market progress in a first extended wave, the second wave shouldn’t retrace beyond 38.2% of the first wave and should take more time in its formation than the fourth wave. The fifth wave will be the shortest motive wave. 
  2. First Non-Extended Wave. When the first wave is not the extended wave, the second wave can retrace it until 99%. If the first wave surges after a noticeable decline, the third wave will be the extended wave.
  3. Second Wave. If the first motive wave is (or probably will be) the extended wave, the second wave should not retrace beyond 38.2%. If the first wave is not the extended wave of the impulsive sequence, the second wave could retrace it until 99%. If in the second wave, its wave A retraces beyond 61.8%, thus the second wave should fail in its wave C.
  4. Third Extended Wave. This sequence has more chances to occur in the real market. In general, the fourth wave tends to take more time in its completion than the second wave. When the third wave is the extended move, the fifth wave tends to fail.
  5. Third Non-Extended Wave. When the third wave is not the extended wave, then the first or fifth wave will be the extended wave. However, the third wave will never be the shortest.
  6. Fourth Wave. If the fifth wave is the extended wave, then the fourth wave will be the complex correction of the complete five-wave sequence. If the first wave is the extended move, then the fourth wave will be a simple correction, and the second wave the complex correction. Generally, when the fifth wave is the extended move, the third wave will experience a retrace between 50% and 60%. If the third wave is the extended wave, the fourth wave will be the complex and retrace the third wave between 38.2% and 61.8%.
  7. Fifth Extended Wave. When the fifth wave is the extended move, its length in terms of price will be at least the length between the first and the end of the third wave. In general, this extended wave should not experience a complete retrace.
  8. Fifth Non-Extended Wave. In this case, the fifth wave should experience a retracement near to 100%. If the fifth wave belongs to the third wave of upper degree, then the fifth wave will experience a retrace until the fourth wave zone.
  9. Failure in Fifth Wave. This case is possible when the third wave is the extended wave.

Terminal Impulsive Waves.

In his work “The Wave Principle,” R.N. Elliott defined this kind of pattern as “triangle diagonal.” However, Glenn Neely to avoid confusion re-calls to this pattern as “terminal impulsive wave,” providing an intuitive and it-self definition. 

  1. First Extended Wave. In this case, the terminal impulsive wave tends to appear. The second wave shouldn’t retrace beyond 61.8% of the first wave. The third wave should extend near to 61.8% of the first wave, but it should never be less than 38.2%. The fourth wave will tend to be 61.8% of the second wave, and the guideline that connects the ends of waves 2 and 4, should be clear in its identification.
  2. First Non-Extended Wave. When this scenario occurs, the terminal structure will be the wave C of a corrective formation and not the end of an impulsive sequence.
  3. Second Wave. As we said previously, if the first wave is the extended wave, the second wave should retrace until 61.8% of the first wave. If the first wave is not an extended wave, thus the second wave could retrace until 99% the first wave.
  4. Third Extended Wave. When the third wave is the extended wave, rarely the market will develop a terminal impulsive wave. The likely context in its appearance could occur in a wave C, not in a motive wave.
  5. Third Non-Extended Wave. If this scenario occurs, the first wave will likely be the extended wave, and the fifth wave will be the terminal impulsive wave.
  6. Fourth Wave. The third wave should not experience a retrace beyond 61.8% by the fourth wave.
  7. Fifth Extended Wave. This scenario can happen if the structure advances inside of the fifth wave of upper degree or when the terminal impulsive sequence is the wave C of a corrective pattern, except in a horizontal triangle.
  8. Fifth Non-Extended Wave. In this scenario, the fifth wave shouldn’t be higher than 61.8% of the third wave, and the fifth wave shouldn’t be more complex than the other two impulsive waves. The fourth wave should take less time and price than the second wave.

Conclusions

In this educational article, we reviewed the context of each case of extended, non-extended, and corrective waves, which advances in a motive sequence.

In particular, the wave analyst must maintain in consideration that in an impulsive sequence must have only one extended wave, in this context, a complex correction should appear before or after an extended wave.

In our next article, that corresponds to the second part, we’ll present the observations in corrective waves, in particular, we’ll discuss the flat and zigzag patterns.

Suggested Readings

  • Neely, G.; Mastering Elliott Wave: Presenting the Neely Method; Windsor Books; 2nd Edition (1990).
  • Prechter, R.; The Major Works of R. N. Elliott; New Classics Library; 2nd Edition (1990).
Categories
Crypto Market Analysis

Daily Crypto Review, May 25 – Bitcoin Under $9,000; Goldman Sachs Hosting a Conference Call on Crypto

The crypto market has spent the weekend retracing as Bitcoin fell under $9,000.  Bitcoin is currently trading for $8,790, which represents a decrease of 5.05% on the day. Meanwhile, Ethereum lost 3.15% on the day, while XRP lost 3.4%.

The crypto market has spent the weekend retracing as Bitcoin fell under $9,000.  Bitcoin is currently trading for $8,790, which represents a decrease of 5.05% on the day. Meanwhile, Ethereum lost 3.15% on the day, while XRP lost 3.4%.

The crypto market has spent the weekend retracing as Bitcoin fell under $9,000.  Bitcoin is currently trading for $8,790, which represents a decrease of 5.05% on the day. Meanwhile, Ethereum lost 3.15% on the day, while XRP lost 3.4%.

Theta Fuel took the position of today’s biggest daily gainer, with gains of 59.67%. DxChain Token lost 19.32% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance decreased quite a bit since we last reported, with its value currently at 65.89%. This value represents a 1.16% difference to the downside.

The cryptocurrency market capitalization decreased when compared to Friday’s value, with its current value being $256.67 billion. This value represents a decrease of $5 billion when compared to the value it had on Friday.

What happened in the past 24 hours

Goldman Sachs hosting a conference on crypto 

Goldman Sachs, the largest investment bank in the world, will host a conference call titled US Economic Outlook & Implications of Current Policies for Gold, Inflation, and Bitcoin on May 27.

The event will be hosted by Sharmin Mossavar-Rahmani, the Chief Investment Officer of Goldman Sachs’ Investment Strategy Group, Harvard economics professor Jason Furman, as well as Goldman Sachs’ chief economist Jan Hatzius.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization had quite turbulent weekend as its price dropped below $9,000. The 4th failed attempt of going above $10,000 on May 20 confirmed the appearance of another bearish turn for Bitcoin. However, the most recent events regarding Bitcoin mining, Satoshi Nakamoto and many more made bulls scared and bears more eager to sell their Bitcoin.


The price found support at the $8,650 level, with it currently pushing towards $8,820.

Key levels to the upside                    Key levels to the downside

1: $8,980                                           1: $8,820

2: $9,120                                           2: $8,650

3: $9,250                                            3: $8,000

Ethereum

While Ethereum did follow Bitcoin in its move towards the downside, it did not quite match its intensity. The second-largest cryptocurrency by market cap retraced as bears took over the market, but only fell in price up to the $198 support level. It has consolidated since and even made moves towards regaining previous highs.


Ethereum’s volume increased greatly during the price drop but normalized as the price found support.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP was, just like the aforementioned Ethereum, matching Bitcoin in price direction, but not in intensity. The third-largest cryptocurrency by market cap entered a short bull period, which brought it to $0.19 levels before recovering to a price closer to $0.195.


XRP’s volume was normal throughout the price drop, while its RSI level bounced from the oversold territory to (at the time of writing) 37.7.

Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Signals

Gold Choppy Sessions Continues – Wait for Breakout! 

The safe-haven-metal prices regain its bullish traction and rose from a one-week low of $1,717.34 to $1,734.05, mainly due to the risk-off market sentiment in the wake of US-China intensified tussle and coronavirus (COVID-19) second wave fears. On the other hand, the U.S. dollar also draws safe-haven bids and managed to limit any additional gains in the gold prices. At this moment, the safe-haven-metal prices are currently trading at 1,734.97 and consolidating in the range between 1,724.50 and 1,735.55.

The safe-haven-metal prices regain its bullish traction and rose from a one-week low of $1,717.34 to $1,734.05, mainly due to the risk-off market sentiment in the wake of US-China intensified tussle and coronavirus (COVID-19) second wave fears. On the other hand, the U.S. dollar also draws safe-haven bids and managed to limit any additional gains in the gold prices. At this moment, the safe-haven-metal prices are currently trading at 1,734.97 and consolidating in the range between 1,724.50 and 1,735.55.

The safe-haven-metal prices regain its bullish traction and rose from a one-week low of $1,717.34 to $1,734.05, mainly due to the risk-off market sentiment in the wake of US-China intensified tussle and coronavirus (COVID-19) second wave fears. On the other hand, the U.S. dollar also draws safe-haven bids and managed to limit any additional gains in the gold prices. At this moment, the safe-haven-metal prices are currently trading at 1,734.97 and consolidating in the range between 1,724.50 and 1,735.55.

The reasons behind the gold pullback could be attributed to the tussle between the world’s top two economies, which was further bolstered by China’s indirect warning to the U.S., from the 13th National People’s Congress. As a Chinese speaker for the National People’s Congress, Zhang Yesui, said that China would strongly take its stand against the U.S. accuses and firmly defend its interest if the U.S. takes any action to ease the dragon nation’s core interests. 

Apart from this, China’s ruling Communist Party has set a controversial national security law in motion for Hong Kong separation. This law would be able to ban foreign interference, terrorism, and external interference aimed at collapsing the central government, which eventually fueled concerns about a major US-China tussle and sent the gold prices higher.

On the other hand, fresh upticks in the yellow metal are also driven by the report that showed the Asian major dropped its economic growth target, 6-6.5% for GDP in 2019. This eventually increased the market uncertainty because the world’s 2nd biggest economy faced much disappointment from the GDP, which pushed investors into the safe-haven metal.

At the coronavirus front, the second wave of coronavirus kept the market risk sentiment under pressure and urged the global policymakers to rethink their reopening of the economies. However, U.S. President Donald Trump recently clearly said he would not shut down the economy during the second round of the virus.

The U.S. dollar continued to draw the haven demand on the back of the US-China tussle. As in result, investors turned to the safe-haven dollar, which kept the global stocks under pressure. Whereas, The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.19% to 199.593 by 11:44 PM ET (4:44 AM GMT). However, the U.S. dollar bullish bias turned out to be one of the major factors that kept a cover on any further gains in the gold prices.

As a result, the U.S. 10-year Treasury yields continued to report losses near 0.70%, while Japan’s NIKKEI struggled for direction around 20,560 by the press.

Looking ahead, the U.S. dollar price action and risk tone will continue to influence the gold trades. However, the near-term sentiment around the yellow-metal may remain strengthened by the huge stimulus announcing globally to control the virus’s impact.


Daily Support and Resistance

S1 1676.16

S2 1702.89

S3 1715.19

Pivot Point 1729.63

R1 1741.93

R2 1756.36

R3 1783.1

Gold slipped sharply from 1,740 level to 1,717 support level, which was extended by the upward trendline on the 4-hour timeframe. Bullish trend continuation may drive buying until 1,745 level and even higher towards 1,754 level while bearish breakout of 1,717 can open further room for buying until 1,708 level. Odds of bullish bias remains strong today. Good luck! 

Categories
Forex Videos

Elliot Wave Education In Forex – Trading With Confidence!

https://youtu.be/HW64xScAuYI

https://youtu.be/HW64xScAuYI

Elliot Wave Theory

 

This video is an example of a wave counting case when the movement starts from a different level to the lowest point of the movement recorded in the price chart.

The following chart corresponds to the cross Euro Pound in its hourly timeframe.

Different techniques of technical analysis teach that the price should be analyzed from the lowest point to the highest level, or vice versa. However, in Elliott’s wave theory, an impulsive, or corrective movement, does not always start or end at the lowest level shown on the price chart.

In this example, we see that the price comes from a bearish movement, which ends with an aggressive fall. However, this did not end at level 0.82758, but ended at level 0.82767, from where we observed that the euro pound cross initiated an impulsive sequence in five waves, which developed an extended third wave, also shows the advance on a fourth wave which is longer in time than the second wave and this impulsive sequence ended on January 14, 2020.

Now we will see the internal structure of the extended third wave. Here we see the first wave, the second, third, fourth, fifth. The degree of the sequence would correspond to Subminuette in green.

Remember that both colors and grades are used for convenience for analysis purposes. Elliott, when he developed his wave theory, he never pointed out an obligation of a time range with a specific degree. The important thing in wave counting is the existing order in the analysis process.

We have already seen the third extended wave, now we see the principle of alternation between the corrective waves, from the graph we see that wave 2 is a simple correction and the fourth is a complex correction.

In the fourth wave, we see that its structure corresponds to a triangular formation, and we see its internal segments a, b, c, d, and e, and here we can observe the initiation of impulsive movement in 5 waves belonging to the fifth wave.

The start of the fifth wave is validated once the price breaks the b-d triangle guideline. Likewise, the upward movement of the fifth wave is considered finished after the low rupture of the upward guideline that joins waves 2 and 4.

This corrective sequence should correspond to a corrective process of a similar degree to this training that began on December 13, 2019. However, for the purposes of this analysis, we will only analyze the impulsive structure. 

Another detail that we must take into account in the impulsive structure is related to the extended third wave, which has a particularity that we can observe in this case. When the share price goes back beyond 38.2% of Fibonacci, the price warns us that the momentum bullish is running out, and it is very likely that the price will not exceed the previous maximum. In this case, we see that the price exceeded the maximum of wave 3 for only 4 pips reaching the level 0.85959.

 

Categories
Forex Price Action

The H1-15M Breakout Trading: Concentrate on Breakout and Reversal Candle

In today’s lesson, we are going to demonstrate an example of a trade setup based on the H1-15M chart combination. Usually, the straighter the first move, the better it is.  However, the price sometimes consolidates in the first arm as well. Such consolidation makes a move look weak and may hold us back from eyeing on the chart. We try to find out whether we should skip eyeing on such a chart or not.

In today’s lesson, we are going to demonstrate an example of a trade setup based on the H1-15M chart combination. Usually, the straighter the first move, the better it is.  However, the price sometimes consolidates in the first arm as well. Such consolidation makes a move look weak and may hold us back from eyeing on the chart. We try to find out whether we should skip eyeing on such a chart or not.

In today’s lesson, we are going to demonstrate an example of a trade setup based on the H1-15M chart combination. Usually, the straighter the first move, the better it is.  However, the price sometimes consolidates in the first arm as well. Such consolidation makes a move look weak and may hold us back from eyeing on the chart. We try to find out whether we should skip eyeing on such a chart or not.

This is an H1 chart. The chart shows that the price makes a bullish move. Then, it produces a bearish inside bar followed by a bullish engulfing candle. The H1-15M buyers may flip over to the 15M chart to get a 15M bullish reversal candle to trigger a long entry. However, those two bearish H1 candles suggest that the 15M chart does not produce any bullish reversal candle after the H1 breakout. The price starts having a bearish correction instead.

The chart makes its bullish move, followed by a bearish correction. The bullish move does not look that impressive. It consolidates before making the bearish correction. Many traders may skip eyeing on this chart to go long in the pair. Ideally, the H1-15M combination trading requires an H1 breakout followed by a 15M bullish reversal to offer a long entry. Let us proceed to the next chart to find out what the price does here.

The price finds its support and heads towards the North. The last candle closes above the level of resistance. This is an H1 breakout. The H1-15M combination traders are to flip over to the 15M chart to trigger a long entry. Let us flip over to the 15M chart first.

This is how the 15M chart looks right after the H1 breakout. If the price comes back to the breakout level, and the level produces a 15M bullish reversal candle, the buyers may trigger a long entry.

The 15M chart produces a bearish engulfing candle closing within the breakout level. The next candle comes out as a bullish engulfing candle. The H1-15M 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 never looks back before hitting 1R. It heads towards the North at a very good pace. Consolidation and bullish reversal candle come out exactly the buyers would want to get. Do not forget that the first bullish move does not look that impressive. The breakout and 15M chart’s price action attract the buyers to go long here, though. This is what we are to look for in the H1-15M combination trading. It is good if the price makes a strong move in the first arm. However, if it does not, we may still eye on the chart to see whether it makes an H1 breakout and offers us an entry by producing a 15M bullish reversal candle.

Categories
Crypto Market Analysis

Daily Crypto Review, May 22 – Bitcoin at $9,000; Craig Wright Has The Keys to 820,000 BTC?

The crypto market has spent the day following Bitcoin’s spike down, most likely due to the fear of Satoshi Nakamoto moving their funds (which is most likely not true, as the more likely scenario would be that one of the miners was moving the BTC).  Bitcoin is currently trading for $9,091, which represents a decrease of 4.2% on the day. Meanwhile, Ethereum lost 4.38% on the day, while XRP lost 0.55%.

The crypto market has spent the day following Bitcoin’s spike down, most likely due to the fear of Satoshi Nakamoto moving their funds (which is most likely not true, as the more likely scenario would be that one of the miners was moving the BTC).  Bitcoin is currently trading for $9,091, which represents a decrease of 4.2% on the day. Meanwhile, Ethereum lost 4.38% on the day, while XRP lost 0.55%.

The crypto market has spent the day following Bitcoin’s spike down, most likely due to the fear of Satoshi Nakamoto moving their funds (which is most likely not true, as the more likely scenario would be that one of the miners was moving the BTC).  Bitcoin is currently trading for $9,091, which represents a decrease of 4.2% on the day. Meanwhile, Ethereum lost 4.38% on the day, while XRP lost 0.55%.

OmiseGO took the position of today’s biggest daily gainer, with gains of 65.98%. THETA lost 16.34% 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 67.05%. This value represents a 0.03% difference to the downside.

The cryptocurrency market capitalization decreased when compared to yesterday’s value, with its current value being $251.67 billion. This value represents a decrease of $10.92 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Kleiman vs. Wright getting heated 

Ira Kleiman’s legal team announced that Dr. Craig Wright already has keys to the encrypted file that is believed to contain more than 820,000 Bitcoin. The Kleiman estate is currently suing Wright over the Bitcoin he allegedly mined by partnering with the late Dave Kleiman. On the other side, Wright claims there was no partnership.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization had quite a price drop in the past 24 hours. Most likely sparked up by news of someone moving Bitcoin mined in the first month of Bitcoin’s existence, as well as new information on the Craig Wright case, investors have started to get cautions and exit their positions, bringing BTC to under $9,000 at one point. After falling to $8,800, Bitcoin bulls woke up and lifted the price above $9,000, where it is standing at the moment. Bitcoin is currently trying to pass the $9,210 resistance level.


Key levels to the upside                    Key levels to the downside

1: $9,250                                           1: $9,120

2: $9,580                                           2: $8,980

3: $9,735                                            3: $8,820

Ethereum

Ethereum followed Bitcoin and dropped in value quite a bit over the past 24 hours. The second-largest cryptocurrency by market cap even fell to $190 at one point, before being picked up by the bulls. It is currently trying to establish its position above the $198 support level, which it seems it will succeed in doing.


Ethereum looks like it might make a head and shoulders pattern, which will be a safe trade (if it plays out correctly). However, it is too early to speculate on such things.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

Even though XRP was the most stable cryptocurrency out of the top3 in the past couple of days (including today), it is far from being completely stable. The third-largest cryptocurrency by market cap dropped below its $0.2 support level (now turned resistance). XRP has since consolidated and is trying to pass $0.2 to the upside.


Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 22 – Top Trade Setups In Forex – ECB Monetary Policy Meeting Accounts Ahead! 

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies. Let’s keep an eye on U.K. Retail sales and ECB Monetary Policy Meeting Minutes.

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies. Let’s keep an eye on U.K. Retail sales and ECB Monetary Policy Meeting Minutes.

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies. Let’s keep an eye on U.K. Retail sales and ECB Monetary Policy Meeting Minutes.

Economic Events to Watch Today

 

 

 

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.09777 after placing a high of 1.09988 and a low of 1.09185. Overall the movement of EUR/USD remained bullish throughout the day. The EUR/USD pair remained near 1.1000 after the release of FOMC meeting minutes. The surge in the EUR/USD pair suggested that the pair might break its 7-week range and move further to earn more gains.

The FOMC minutes failed to impress the market as there was no surprise element in Powell’s presentation and was ignored by market participants. It was widely expected that the coronavirus outbreak would continue to weigh on the economy, and the economic outlook would remain somewhat pessimistic. Greenback holds onto its losses as there was no room for surprises in the minutes of the meeting. 

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies.

On the data front, at 13:00 GMT, the Current Account Balance from the Eurozone showed a balance of 27.4B during March against 37.8B of February. At 14:00 GMT, the Final CPI from Eurozone for the year declined to 0.3% against the expectations of 0.4% and weighed on EUR. The Final Core CPI for the year came in line with the hopes of 0.9%. 

At 19:00 GMT, the Consumer Confidence on the Eurozone economic condition showed a decline to 19 forms the forecasted decline of 23 and supported EUR. The market participants ignored the poor than expected CPI from Eurozone, and EUR got its support after the release of consumer confidence, which showed less decline than expected.

Furthermore, the latest Franco-German proposal for a 500 euros fund to fight coronavirus crisis helped EUR pair to gain traction in the market and remain stronger than other currencies; this ultimately supported the upward trend of EUR/USD pair.

Daily Support and Resistance

  • R3 1.1067
  • R2 1.1038
  • R1 1.0994

Pivot Point 1.0965

  • S1 1.092
  • S2 1.0892
  • S3 1.0847

EUR/USD– Trading Tip

On Friday, the EUR/USD prices are holding at 1.0940 as these were facing strong resistance around 1.0993, which marks the triple top resistance level and can trigger selling in the pair. Conversely, the EUR/USD pair may find support around 1.0883, once the 1.0993 level gets violated. The MACD is recently forming selling candles, which suggests the trend of the sale in the pair. So the overall trading range can be from 1.0994 level to 1.0886. On Friday, we can look for selling trades under 1.0965 for 40/50 pips profit. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.22225 after placing a high of 1.22495 and a low of 1.21855. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair continued to follow its previous day’s trend of downward movement and dropped on Thursday as well. The decline in currency pair could be attributed to the increasing speculations that the Bank of England will consider to ease monetary policy further. The Governor of Bank of England, Andrew Bailey, said that he had changed his position into negative interest rates given the crisis.

He added that more easing measures from the Bank of England were more likely, but the interest rates were below on his priorities. He said that though it was not the time for negative interest rates, they could not be excluded from options.

Furthermore, on the lack of progress on trade talks with the European Union, the U.K. was driving its way towards no-deal Brexit. This raised fear amongst investors and raised uncertainty about the future relationship of Great Britain with E.U., making GBP weaker on the board. In the current context of coronavirus shutdown, the U.K. economy was already disturbed, and chances for an unfriendly exit from E.U. along with coronavirus would impact highly negative on the common currency. 

On the data front, at 13:30 GMT, the Flash Manufacturing PMI from Great Britain showed a surge in Index with 40.6 points against the 35.1 of forecast and supported GBP. Sterling was also supported by Flash Services PMI, which exceeded the expectations of 24.1 and came in as 27.8. From the U.S. side, the increased Jobless Claims last week by 2.43M weighed on the U.S. dollar. However, the Flash Manufacturing PMI, which was key data on Thursday from the American side, came in support of the U.S. dollar when released as 39.8 against the expectations of 39.3.

The strong U.S. dollar on Thursday amid better than expected PMI data added in the downfall of GBP/USD pair.

Daily Support and Resistance

  • R3 1.232
  • R2 1.2285
  • R1 1.2255

Pivot Point 1.222

  • S1 1.219
  • S2 1.2155
  • S3 1.2124

GBP/USD– Trading Tip

The GBP/USD continues to trade within the same technical levels, which we discussed a day before. The Cable is facing resistance around 1.2269 level, and it continues to develop doji and bearish engulfing candles below 1.2269 zones, which has driven a bearish retracement in the Cable. On the lower side, the Sterling may find support against the U.S. dollar around 1.2170 level. The MACD and 50 EMA are supporting selling bias in the pair. Today, the release of U.K. Retail Sales m/m may help drive further movement in the market. Therefore, the bullish breakout of 1.2270 level can lead the Sterling prices towards 1.2360. While breakout of the support level of 1.2169 may lead the Sterling pair towards the 1.2080 support zone. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.604 after placing a high of 107.847 and a low of 107.415. Overall the movement of the USD/JPY pair remained bullish throughout the day. At 4:50 GMT, Japan’s Merchandise Trade Balance for April showed a deficit of 1.0 Trillion Japanese Yen on Thursday. At 5:30 GMT, the Flash Manufacturing PMI came in as 38.4 during May compared to 41.9 of April.

The exports from Japan showed a decline of 21.9% and imports by 7.2%, while overall trade balance showed a deficit and weighed on Japanese Yen. The weak JPY gave strength to the USD/JPY pair on Thursday.

On the American side, the U.S. jobless Claims for the past week exceeded over 2.43M from the expectations of 2.4M and weighed on the U.S. dollar at 17:30 GMT. The Philly Fed Manufacturing Index for May declined by 43.1 against 40.0 expected and weighed on the U.S. dollar.

However, at 18:45 GMT, the Flash manufacturing PMI from the U.S. for the month of May surged to 39.8 against the expected 39.3 and supported the U.S. dollar. The Flash Services PMI for May also exceeded to 36.9 from 32.6 of expectations. 

The C.B. Leading Index for April was expected to be declined by 5.5%, but in actual, it showed a decline of 4.4% and supported the U.S. dollar. The Existing Home Sales remain flat with expectations of 4.33M.

Better than expected economic data from the United States gave strength to the U.S. dollar and moved USD/JPY pair in an upward direction to post daily gains. On the other hand, Fed Chairman Jerome Powell showed concerns about the economic indicators to hit their bleakest levels since the Great Depression. He said that the U.S. economy was facing a whole new level of uncertainty amid the coronavirus crisis. 

Daily Support and Resistance    

  • R3 108.21
  • R2 108.04
  • R1 107.83

Pivot Point 107.65

  • S1 107.44
  • S2 107.26
  • S3 107.05

USD/JPY – Trading Tips

On Friday, the USD/JPY continues trading sideways in between 107.630 – 107.350. Above 107.650 level, we may see USD/JPY prices heading towards the next resistance level of 108.130. The ascending triangle pattern was already violated, and the upward trendline is expected to keep the USD/JPY supported around 107.350. Breakout of USD/JPY support area of 107.35 can lead the USD/JPY prices towards 106.850. So let’s consider taking buying trades over 107.350 today. 

All the best for today! 

Categories
Forex Elliott Wave

Additional Observations in Wave Analysis – Advanced Level

Introduction

Introduction

Introduction

R.N. Elliott, in his treatise “The Wave Principle,” emphasizes the importance of the corrective patterns knowledge. Elliott adds that its comprehension can provide to wave analyst an advantage in the forecasting process.

Glenn Neely, in his work “Mastering Elliott Wave,” not only expands this information defining a set of observations about the different corrective patterns and its potential implication for the next path. He also extends these observations to impulsive structures.

Corrective Patterns

The significative movements occur after a correction; in this sense, the knowledge of the potential extension of the next move provides a valuable edge to wave analyst.

The following list shows the corrective formations according to their strength level.

  1. Triple zigzag. This complex corrective pattern is the strongest of the corrections group. The triple zigzag rarely appears in the real market; however, its appearance is indicative of its strength (or weakness) level. When it surges, it will raise on a terminal structure, or in a triangle pattern. Once the triple zigzag ends, the next move will not experience a complete retracement.
  2. Triple Combination. This type of complex correction can be formed by a combination of flat, zigzag, and triangle. Usually, it will end with a triangle pattern. Once the triple three formation ends, the next path would tend to retrace the entire movement even in an upper degree. If this pattern surges as a terminal structure, the next move should entirely retrace the formation triple three.
  3. Triple Flat. This complex formation corresponds to the combination of three flat patterns. In this case, the next path should not retrace its advance completely, except when the Elliott wave structure surges as a terminal structural series in the fifth wave.
  4. Double Zigzag. This complex corrective pattern should not experience a complete retracement by the next movement.
  5. Double Combination. The double combination is a complex corrective pattern that generally could contain a zigzag or a flat formation with a triangle. In the same way, this structure tends to end with a failure in wave c. This pattern tends to be entirely retraced by the next path.
  6. Double Flat. This complex combination surges in rare cases. However, when it rises, generally, the next move will not retrace the complex structure fully.
  7. Extended Zigzag. This variation of the zigzag pattern generally appears in triangle formations or at the end of a terminal structure. The next path of an extended zigzag generally will never be entirely retraced.
  8. Extended Flat. This variation tends to emerge in triangle patterns. In the same way that the extended zigzag, the next move should not retrace it completely.
  9. Zigzag. This standard corrective pattern can be found in the real market. In general, the next path could retrace wholly and partially the extension of the zigzag pattern.
  10. Flat. Although this pattern and its variations are typical, the retracement of the next movement tends to be unclear.
  11. Double Three. In general, the extension of this complex corrective pattern tends to warn about the potential next movement. In short, while most extended being the double three pattern, the next move will be stronger.

Triangles

Glenn Neely, in his work, considers that triangle patterns require a different treatment. 

  1. Contracting Triangle. The thrust developed in a contracting triangle is a movement with a higher level of momentum. This move will be bigger or smaller, in terms of time, depending on its nature. If the contracting triangle is horizontal, the next path will be equal to the largest segment of the triangle. In the irregular contracting triangle case, the next movement will reach the 161.8% respecting to the largest leg of the triangle. Finally, in the continuous contracting triangle, the thrust can reach the 261.8% of the broadest segment of the triangle. 
  2. Expanding Triangle. In this kind of triangle, the thrust differs from the case of the contracting triangles. The thrust of an expanding triangle tends to be minor than the most extended segment of the triangle.

Impulses

The advantage of the next movement of an impulsive wave is the knowledge of the potential correction. In this context, it is tough to determine what kind of correction will occur before the corrective sequence begins. 

  1. Trend. After the motive wave completion, the impulsive movement should not experience a retracement beyond the origin of its first segment, except if the impulsive wave corresponds to a fifth wave. In general, waves A, 1, or 3, should not experience a retrace greater than 61.8% by the next move.
  2. First Extended Wave. When the extended wave is the first move, the motive wave should experience a retracement until the end of wave 4. 
  3. Third Extended Wave. In this case, once the impulsive wave is completed, the motive structure should experience a retrace between the high and low of the fourth wave.
  4. Fifth Extended Wave. The next corrective structure of a fifth extended wave should retrace more than 61.8% to the impulsive move.
  5. Terminal Structure. The movement after a terminal structure should retrace the progression of the terminal structure completely. The time elapsed in the evolution of the corrective move should be shorter than 50% of the time elapsed in the making of the terminal structure.

Conclusions

In this educational article, we discussed the observations described by Glenn Neely in his work “Mastering Elliott Wave” concerning the potential next movement, depending on the pattern in progress.

In this context, Neely, following the steps of R.N. Elliott, provides an ample proportion of time to describe what to expect after a corrective structure. This knowledge could provide the wave analyst an advantage in its comprehension about the market situation and what should be the potential next move.

In our following article, we will present the advanced applications in the wave analysis in a four-part series.

Suggested Readings

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

Categories
Forex Daily Topic Forex Price Action

The H1-15M Combination Trading in a Bearish Market

In today’s lesson, we are going to demonstrate an example of the H1-15M combination trading strategy offering a short entry. In one of our previous lessons, we demonstrated an example of a long entry. Let us see how it ends up offering us the entry.

In today’s lesson, we are going to demonstrate an example of the H1-15M combination trading strategy offering a short entry. In one of our previous lessons, we demonstrated an example of a long entry. Let us see how it ends up offering us the entry.

In today’s lesson, we are going to demonstrate an example of the H1-15M combination trading strategy offering a short entry. In one of our previous lessons, we demonstrated an example of a long entry. Let us see how it ends up offering us the entry.

This is an H1 chart. The chart shows that the price gets caught within two horizontal levels. The chart shows that the price after getting the last rejection has been heading towards the South. The sellers are to wait for a bearish breakout to go short in the pair.

Here it comes. The last candle breaches the level of support closing well below it. The H1-15M combination traders may flip over to the 15M chart to get a bearish reversal candle for triggering a short entry. Let us flip over to the 15M chart.

This is how the 15M chart looks. As expected, the last candle comes out as a bearish candle. If the next 15M candle comes out as a bearish candle closing below the last candle, the sellers may trigger a short entry. If the chart consolidates, the sellers are to wait for a 15M bearish reversal candle to take the entry. Let us find out what happens here.

The chart produces a bullish corrective candle. The sellers are to wait for a bearish reversal candle to go short in the pair. Usually, if the price makes a correction, it goes towards the breakout level and produces a reversal candle there. Let us find out where it produces a bearish reversal candle for the sellers.

The chart produces a bearish engulfing candle closing below consolidation support. The sellers may trigger a short entry right after the last candle closes. Stop Loss and Take Profit are to be set according to the H1 chart. Stop Loss is to be set above H1 horizontal resistance before the breakout, and Take Profit is to be set with 1R. Let us now find out how the entry goes.

This is the H1 chart. We see that the price heads towards the South with good bearish momentum and hits the target of 1R with ease. After producing the 15M bearish reversal candle, the price never looks back but goes towards the trend’s direction. This is what usually happens in the H1-15M combination trading. The price heads towards the trend’s direction without wasting time.

Do a lot of backtesting in your trading chart to find out some entries based on the H1-15M chart. Then, do some demo trading with the strategy before going live. It will help you be a better trader.

 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 21 – Top Trade Setups In Forex – Services & Manufacturing PMI! 

On the news front, the EUR, GBP, and USD remain in the highlight due to manufacturing and services. The PMI figures are expected to improve all of the economies, perhaps due to smart lockdown strategy, which may have driven some business activity during the last month.

On the news front, the EUR, GBP, and USD remain in the highlight due to manufacturing and services. The PMI figures are expected to improve all of the economies, perhaps due to smart lockdown strategy, which may have driven some business activity during the last month.

On the news front, the EUR, GBP, and USD remain in the highlight due to manufacturing and services. The PMI figures are expected to improve all of the economies, perhaps due to smart lockdown strategy, which may have driven some business activity during the last month.

 

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.09777 after placing a high of 1.09988 and a low of 1.09185. Overall the movement of EUR/USD remained bullish throughout the day. The EUR/USD pair remained near 1.1000 after the release of FOMC meeting minutes. The surge in the EUR/USD pair suggested that the pair might break its 7-week range and move further to earn more gains.

The FOMC minutes failed to impress the market as there was no surprise element in Powell’s presentation and was ignored by market participants. It was widely expected that the coronavirus outbreak would continue to weigh on the economy, and the economic outlook would remain somewhat pessimistic. Greenback holds onto its losses as there was no room for surprises in the minutes of the meeting. 

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies.

On the data front, at 13:00 GMT, the Current Account Balance from the Eurozone showed a balance of 27.4B during March against 37.8B of February. At 14:00 GMT, the Final CPI from Eurozone for the year declined to 0.3% against the expectations of 0.4% and weighed on EUR. The Final Core CPI for the year came in line with the hopes of 0.9%. 

At 19:00 GMT, the Consumer Confidence on the Eurozone economic condition showed a decline to 19 forms the forecasted decline of 23 and supported EUR. The market participants ignored the poor than expected CPI from Eurozone, and EUR got its support after the release of consumer confidence, which showed less decline than expected.

Furthermore, the latest Franco-German proposal for a 500 euros fund to fight coronavirus crisis helped EUR pair to gain traction in the market and remain stronger than other currencies; this ultimately supported the upward trend of EUR/USD pair.


Daily Support and Resistance

  • R3 1.1097
  • R2 1.1048
  • R1 1.1014

Pivot Point 1.0966

  • S1 1.0932
  • S2 1.0884
  • S3 1.0849

EUR/USD– Trading Tip

The EUR/USD prices are facing strong resistance around 1.0993, which marks the triple top resistance level and can trigger selling in the pair. Conversely, the EUR/USD pair may find support around 1.09512, and below this, the next support is likely to be seen around 1.0910. The bearish bias remains strong today. On the downside, the EUR/USD has odds of bouncing off above 1.0933. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.22375 after placing a high of 1.22875 and a low of 1.22212. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair remained in a consolidation phase on Wednesday and showed a slight bearish movement amid poor than expected economic data from Great Britain. The CPI, RPI & PPI data showed a decline in the month of April and provided a weak economic outlook and weighed on GBP, which ultimately dragged the GBP/USD pair on Wednesday.

At 11:00 GMT, the Consumer Price Index (CPI) for the year from the United Kingdom fell short of expected 0.9% ad came in as 0.8% and weighed on GBP. The PPI Input in the month of April showed a decline of 5.1% against the expected decline of 4.2% and weighed on Pound. The PPI output of April also declined by 0.7% from the forecasted decline of 0.5% and weighed on GBP.

At 11:02 GMT, the Core CPI for the year from the United Kingdom came in line with the expectations of 1.4%. The RPI for the year from Britain also declined to 1.5% from 1.6% of expectations and weighed on GBP. At 13:30 GMT, the HPI for the year from Great Britain exceeded the expectations of 1.5% and came in as 2.1% and supported Pound.

Apart from economic data, news about considering negative rates as an option by BoE added in the pressure on GBP on Wednesday. According to Governor Andrew Bailey, the Bank of England studied how low U.K. interest rates can be cut even more to cope with the coronavirus crisis and did not exclude the idea of lowering borrowing costs below zero.

Daily Support and Resistance

  • R3 1.2346
  • R2 1.2317
  • R1 1.2279

Pivot Point 1.225

  • S1 1.2211
  • S2 1.2183
  • S3 1.2144

GBP/USD– Trading Tip

After exhibiting sharp bullish trends, the GBP/USD faced resistance around 1.2269 level. As we can see on the 4-hour chart, the pair has closed doji and bearish engulfing candles below 1.2269 zones, which has driven a bearish retracement in the Cable. On the lower side, the Sterling may find support against the U.S. dollar around 1.2170 level. The MACD and 50 EMA are supporting selling bias in the pair. Today, the release of UK PMI figures may help drive further movement in the market. Therefore, the bullish breakout of 1.2270 level can lead the Sterling prices towards 1.2360. While breakout of the support level of 1.2169 may lead the Sterling pair towards the 1.2080 support zone. 

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.535 after placing a high of 107.982 and a low of 107.335. Overall the movement of the USD/JPY pair remained bearish throughout the day. After posting gains for the previous two sessions, the USD/JPY pair starting to lose on Wednesday amid broad-based U.S. dollar weakness and renewed safe-haven demand. 

The U.S. dollar remained weak on Wednesday after Federal Reserve failed to provide any surprising element in its April meeting minutes. The Fed Chairman Jerome Powell said that risk remained on the downside and held the interest rates on the same level.

Powell said that the second wave of coronavirus would impact on U.S. economy with more intensity, and the lockdown in that time would be stricter and for the longer time period, which would cause massive destruction of U.S. economy.

Powell showed his concerns about the impact of the second wave of coronavirus, which was still onboard due to no improvement in vaccine trials. Powell said that the lower-income households would suffer more due to another wave of the virus if it happened. 

However, adding in the U.S. dollar weakness, the uncertainty about the potential coronavirus vaccine emerged in the market. After the trails of the Moderna vaccine in 6 monkeys, it was reported that all six monkeys out of which 3 received the vaccine were tested positive for COVID-19. The virus was found in the noses on all monkeys who participated in animal trials for that vaccine. This report decreased the risk sentiment in the market and added uncertainty.

Daily Support and Resistance    

  • R3 108.57
  • R2 108.28
  • R1 107.91

Pivot Point 107.62

  • S1 107.25
  • S2 106.96
  • S3 106.59

USD/JPY – Trading Tips

The USD/JPY mostly remains mostly bearish following a bullish breakout of the choppy trading range of 107.480 – 107.029 level. For now, the pair is holding at 107.630, having immediate support around 107.500. Above this level, we may see USD/JPY prices heading towards the next resistance level of 108.130. The ascending triangle pattern has already been violated, and it’s expected to kee the USD/JPY supported around 107.500. So let’s consider taking buying trades over 107.500 today. 

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, May 21 – Satoshi Nakamoto Moving Crypto? Crypto Payments Available on Shopify

The crypto market has spent the day slightly retracing, with most of its cryptocurrencies being in the red.  Bitcoin is currently trading for $9,505, which represents a decrease of 2.41% on the day. Meanwhile, Ethereum lost 1.59% on the day, while XRP lost 1.57%.

The crypto market has spent the day slightly retracing, with most of its cryptocurrencies being in the red.  Bitcoin is currently trading for $9,505, which represents a decrease of 2.41% on the day. Meanwhile, Ethereum lost 1.59% on the day, while XRP lost 1.57%.

The crypto market has spent the day slightly retracing, with most of its cryptocurrencies being in the red.  Bitcoin is currently trading for $9,505, which represents a decrease of 2.41% on the day. Meanwhile, Ethereum lost 1.59% on the day, while XRP lost 1.57%.

THETA took the position of today’s biggest daily gainer, with gains of 29.39%. Steem lost 17.74% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance moved down slightly since we last reported, with its value currently at 67.08%. This value represents a 0.38% difference to the downside.

The cryptocurrency market capitalization decreased when compared to yesterday’s value, with its current value being $262.25 billion. This value represents a decrease of $4.01 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Crypto payments on Shopify 

Shopify platform sellers can now utilize cryptocurrencies in their online stores after a partnership with CoinPayments (a crypto payment processor) reached a deal with Shopify.

“Shopify is a natural fit for us,” said CoinPayments CEO Jason Butcher, and also added that “it just makes sense to create an integration that enables secure, easy, and cost-effective transactions.

Honorable mention

On May 20, Reports show that Satoshi Nakamoto may have shown up and reactivated himself. The news came out as someone tried to move 50 Bitcoin that were mined all the way back in Feb 2009.

What’s more interesting is that the Bitcoin that were moved were actually the ones that Craig Wright said he owns.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization spent the past 24 hours in a slight downturn. The drop below $9,735 as well as $9,580 was stopped by the ascending trend, which is being tested at the time of writing. In order not to become even more bearish, Bitcoin has to reach over the trend line and establish itself above some of the horizontal support levels, or to fall within the trend and continue moving like that.


Key levels to the upside                    Key levels to the downside

1: $9,580                                           1: $9,250

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

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

Ethereum

Ethereum has been quite inactive when compared to Bitcoin in the past 24 hours. The second-largest cryptocurrency by market cap dropped a few percent on the day but held up quite good within a range bound by $198 to the downside and $217.6 to the upside. More so, the price has held above $200, which is a great show of strength.


Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP has spent yet another day pretty much doing the same thing. The third-largest cryptocurrency by market cap almost didn’t move throughout the day, only dropping slightly to the $0.2 support level.


XRP’s volume is still incredibly low, while its RSI is at the value of 45.

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Daily Topic Forex Price Action

When a Double Top and an Engulfing Candle Comes Together

In today’s lesson, we are going to demonstrate an example of a chart where the price heads towards the downside upon making a double top. At the second rejection, the chart produces a bearish engulfing candle. Usually, a combination of these two does not usually go wrong. The price does not make a deep consolidation afterward. However, it still heads towards the South with good bearish momentum. Let us have a look at how it happens.

In today’s lesson, we are going to demonstrate an example of a chart where the price heads towards the downside upon making a double top. At the second rejection, the chart produces a bearish engulfing candle. Usually, a combination of these two does not usually go wrong. The price does not make a deep consolidation afterward. However, it still heads towards the South with good bearish momentum. Let us have a look at how it happens.

In today’s lesson, we are going to demonstrate an example of a chart where the price heads towards the downside upon making a double top. At the second rejection, the chart produces a bearish engulfing candle. Usually, a combination of these two does not usually go wrong. The price does not make a deep consolidation afterward. However, it still heads towards the South with good bearish momentum. Let us have a look at how it happens.

This is a daily chart. The chart shows that the last candle comes out as a Shooting Star. The daily –H4 combination traders may consider it as a bearish reversal candle and flip over to the H4 chart.

The H4 chart shows that the price produces a double top. At the second bounce, the reversal candle comes out as a bearish engulfing candle. This combination may attract the sellers to look for short entries upon consolidation and getting bearish reversal candle.

The chart produces a bullish candle. It finds its resistance and produces a bearish engulfing candle closing below consolidation support. The sellers may trigger a short entry right after the last candle closes by setting stop-loss above consolidation resistance and take profit with 1R. Here is an equation that we may think about that. The price does not make a deep consolidation. Since the price is bearish upon a double top and an engulfing candle, most probably, it will make a strong bearish move. However, if you are in doubt, leave it out. Let us proceed to the next chart to find out what happens.

The next candle comes out as a doji candle. The price heads towards the Stop Loss, but it does not hit, though. It looks good for the sellers since the candle closes below the breakout level. Let us proceed to the next chart to find out what the price does.

The chart produces a long bearish candle and hits the target of 1R. Shallow consolidation may hold the price back a little to hit the target in a hurry. However, in the end, the sellers make some green pips with a combination of a Double Top and an Engulfing candle.

This trade setup does not meet all the requirements for combination breakout trading. The trend starts from a Double top resistance along with a bearish engulfing candle; it continues its bearish journey with more candles even after a shallow consolidation. This is what a combination of a Double Top/Bottom along with an engulfing candle can do. Thus, be keen on a chart if a trend starts with a combination of these two.

Categories
Forex Market Analysis

Daily F.X. Analysis, May 20 – Top Trade Setups In Forex – European CPI Figures Ahead! 

The U.S. Federal Reserve will release its latest FOMC meeting minutes. The European Commission will post the May Consumer Confidence Index (-23.7 expected) and final readings of April CPI (+0.4% on-year expected). The U.K. Office for National Statistics will release April CPI (+0.9% on-year expected).

The U.S. Federal Reserve will release its latest FOMC meeting minutes. The European Commission will post the May Consumer Confidence Index (-23.7 expected) and final readings of April CPI (+0.4% on-year expected). The U.K. Office for National Statistics will release April CPI (+0.9% on-year expected).

The U.S. Federal Reserve will release its latest FOMC meeting minutes. The European Commission will post the May Consumer Confidence Index (-23.7 expected) and final readings of April CPI (+0.4% on-year expected). The U.K. Office for National Statistics will release April CPI (+0.9% on-year expected).

Economic Events to Watch Today 

 

 

 

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.09228 after placing a high of 1.09759 and a low of 1.09020. Overall the movement of the EUR/USD pair remained bullish throughout the day. After gaining almost 100 pips on Monday, the EUR/USD pair rose to near its highest level in 2 weeks of 1.0976 level on Tuesday. The upbeat market mode was derived by the Franco-German recovery fund proposal, which was announced on Monday and provided a boost to the single currency EUR. 

The Vice President of the European Commission, Valdis Dombrovskis, said that the European Stability Mechanism (E.S.) strongly supported the Franco-German proposal. Commission was also looking forward to presenting the proposal in the upcoming European summit on May 27.

Following the previous day’s gains, the EUR/USD pair continued to rise and was further supported by the better than expected economic data release on Tuesday.

At 14:00 GMT, the ZEW Economic Sentiment from the European Union showed that the economic outlook of the Eurozone in the view of institutional investors and analysts increased to 46.0 from the expected27.4 and supported EUR. 

The German ZEW Economic Sentiment also showed an improved economic outlook after releasing as 51.0 against the expected 30.0 during the month of May and supported EUR.

The better than the expected economic outlook of the whole bloc, along with Germany even in the lockdown time, gave a sudden push to the already prevailing bullish trend in EUR/USD and rose its prices above two weeks high. However, pair failed to hold its gains and started to drop in late-session but managed to end its day with a bullish candle.

On the other hand, the greenback lost its demand in the absence of any significant economic data. Only Housing Starts in the month of April were released from the U.S. on Tuesday, which declined to 0.89M against the 0.95 forecasted and weighed on the U.S. dollar.

Meanwhile, the Fed Chair Jerome Powell also refrained from providing any specific surprising remarks about the economy or policy outlook and hence kept the U.S. dollar under pressure. He said that the Fed would remain committed to using its all tools to recover the U.S. economy from a corona-induced crisis. U.S. Dollar Index fell near 99.50 level on that day.

Daily Support and Resistance

  • R3 1.1089
  • R2 1.1008
  • R1 1.0961

Pivot Point 1.088

  • S1 1.0833
  • S2 1.0752
  • S3 1.0705

EUR/USD– Trading Tip

The technical outlook for EUR/USD pair seems bullish as the pair is trading at 1.0938, having formed a bullish engulfing pattern above an immediate support level of 1.0918 level. On the 4 hour timeframe, the pair is also forming a higher high and higher low pattern, which can drive further buying trends in the EUR/USD pair. The MACD is bullish, while the 50 EMA is also supporting the bullish bias among traders. The pair has the potential to trade towards north to target 1.0993 triple top area while support holds at 1.0918 and 1.08850 level today.

GBP/USD – Daily Analysis

The GBP/USD prices were closed at 1.22482 after placing a high of 1.22961 and a low of 1.21839. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair rose for 2nd consecutive day on Tuesday amid the broad-based U.S. dollar weakness and better than expected employment data from the U.K. 

The U.S. dollar was already under pressure the previous day after the announcement of the Franco-German recovery fund proposal, which consists of 500 Billion euros. The increased risk appetite in the market also made the U.S. dollar weaker on Tuesday. 

Furthermore, better than expected U.K. employment data on Tuesday gave strength to GBP and raised GBP/USD prices. The office for National Statistics reported that U.K. Unemployment Rate in April dropped to 3.9% from the expected 4.4% and supported GBP.

Despite the decreased unemployment rate, around 857K people filed for jobless claims in April against the forecasted 675K. The decreased unemployment rate, which covers three months to March, showed that unemployment might have fallen sharply during April considering the increased numbers of jobless claims that month.

Meanwhile, U.K. announced a new tariff regime for Brexit that will remove tariffs on 30 billion pounds worth of imports or about 60% worth of trading coming into the U.K. The latest tariff named U.K. Global Tariff (UKCT) will become effective from January 2021 when the transition period will end.

AT 11:00 GMT, the Claimant Count Change for April showed that almost 856.5K people applied for jobless benefit claims against the expectations of 675.0K and weighed on Sterling. At 11:02 GMT, the Average Earning Index for the quarter showed a decline to 2.4% from the expected 2.7% and weighed on U.S. Dollar. However, the Unemployment rate for March showed a decline to 3.9% against the anticipated 4.4% and supported Pound.

Daily Support and Resistance

  • R3 1.2411
  • R2 1.2319
  • R1 1.2257

Pivot Point 1.2166

  • S1 1.2104
  • S2 1.2013
  • S3 1.195

GBP/USD– Trading Tip

On Wednesday, the GBP/USD traded sharply bullish to trade at 1.2245 level despite the release of worse than expected Labor market reports from the U.K. At the moment, Cable faces resistance around 50 EMA, which holds at 1.2255 level. The closing of candles below 1.2260 can drive selling. Still, considering the recent bullish engulfing and long histograms of GBP/USD pair, we may see a continuation of a bullish trend in the Sterling. On the upper side, the violation of 1.2246 level may lead Sterling towards 1.2318 today.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.700 after placing a high of 108.086 and a low of 107.261. Overall the movement of the USD/JPY pair remained bullish throughout the day. The pair USD/JPY moved above 108.00 level on Tuesday, which was the one-month top-level amid increased risk-on market sentiment. The safe-haven Japanese Yen was under pressure after the latest optimism related to the encouraging initial results of coronavirus vaccine trials. Weaker Yen moved the USD/JPY pair in the opposite direction and made it to post gains above 108.00 level.

The intraday selling bias towards the Japanese Yen increased after the Bank of Japan called out for an unscheduled meeting on Friday. This fueled speculations that Bank would announce more easing measures.

The strong positive momentum due to weakened Yen lifted the USD/JPY prices to its highest level since April 13. However, the rally remained limited due to the rising concerns about the US-China relationship.

Another reason behind the limited rally on Tuesday was the fears about the second-wave of coronavirus. Senators questioned the Fed Chair Jerome Powell and the U.S. Treasury Secretary Steven Mnuchin about their stewardship of specific aspects of the $2 trillion package on Tuesday.

The Senate Banking Committee held its first look at spending under the package announced in March to assist people affected by the coronavirus pandemic. Mnuchin and Powell showed different perspectives on the economic outlook. Mnuchin remained optimistic and said that in the second half of 2020, the economy would see an upturn, while Powell suggested that congress might need more than trillions to aid the economy.

Daily Support and Resistance    

  • R3 108.04
  • R2 107.78
  • R1 107.56

Pivot Point 107.3

  • S1 107.09
  • S2 106.82
  • S3 106.61

USD/JPY – Trading Tips

On Wednesday, the USD/JPY mostly remains mostly bearish following a bullish breakout of the choppy trading range of 107.480 – 107.029 level. For now, the pair is holding at 107.630, having immediate support around 107.500. Above this level, we may see USD/JPY prices heading towards the next resistance level of 108.130. The ascending triangle pattern has already been violated, and it’s expected to kee the USD/JPY supported around 107.500. So let’s consider taking buying trades over 107.500 today. All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, May 20– Will BTC reach $20,000 in 2020? Option Traders Say No

The crypto market has spent the day moving towards the upside. While most of the market is in the green, the majority of cryptocurrencies didn’t move much.  Bitcoin is currently trading for $9,757, which represents an increase of 1.23% on the day. Meanwhile, Ethereum gained 0.87% on the day, while XRP gained 1.12%.

The crypto market has spent the day moving towards the upside. While most of the market is in the green, the majority of cryptocurrencies didn’t move much.  Bitcoin is currently trading for $9,757, which represents an increase of 1.23% on the day. Meanwhile, Ethereum gained 0.87% on the day, while XRP gained 1.12%.

The crypto market has spent the day moving towards the upside. While most of the market is in the green, the majority of cryptocurrencies didn’t move much.  Bitcoin is currently trading for $9,757, which represents an increase of 1.23% on the day. Meanwhile, Ethereum gained 0.87% on the day, while XRP gained 1.12%.

Steem took the position of today’s most prominent daily gainer, with gains of 23.81%. Electroneum lost 12.87% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance moved up slightly since we last reported, with its value currently at 67.46%. This value represents a 0.03% difference to the upside.

The cryptocurrency market capitalization increased slightly when compared to yesterday’s value, with its current value being $264.26 billion. This value represents an increase of $0.02 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Bitcoin options market speaks about the BTC price 

The Bitcoin options market spoke about Bitcoin’s price in the future (or at least their prediction). The options market, which is mostly dominated by Deribit and CME, predicted a 9% chance of Bitcoin reaching past its all-time high of $20,000 by the end of the year.

As Bitcoin has a tendency to prolong its rally six to eight months after its halving event, Bitcoin options traders exercise cautious trading in the medium-term.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization spent the past 24 hours being indecisive in terms of where its future path will be. It reached past the $9,735 resistance line, turning it to support once again. However, the main trend isn’t decided quite yet, as these small support and resistance levels aren’t strong enough to determine a trend.


Bitcoin’s volume dropped over the past 24 hours, while its RSI level stayed pretty stable around the 55 mark.

Key levels to the upside                    Key levels to the downside

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

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

3: $10,505                                          3: $9,250

Ethereum

Ethereum didn’t make any major moves in the past 24 hours. The second-largest cryptocurrency by market cap is taking its time to consolidate and prepare for the next move (to either side).


Ethereum has recently gained most of its value based on fundamentals. ETH traders should take that into consideration before doing any trading just based on technicals.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP is proving that it has become a relatively stable cryptocurrency day in and day out. The third-largest cryptocurrency by market cap almost didn’t move at all, hovering around the $0.205 level. While it has spent most of the day below it, $0.205 level is now acting as slight support.


XRP’s volume decreased slightly in the past 24 hours, while its RSI level currently stands at the value of 56.

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Videos

The Dow Jones Bull Trap! Don’t Get Caught Buyers!

https://youtu.be/tDwa_ll_zJc

https://youtu.be/tDwa_ll_zJc

Dow Jones Index – Bull Trap

A bull trap is a misleading signal which tells financial traders that an asset, which has recently fallen, has reversed and is currently heading upwards, when in fact, the asset will continue to decline. Thus trapping buyers who went long, often at the top of the rebound, only to go on to suffer losses when the asset crashes.
We may well find ourselves in such a situation with the Dow Jones Index currently.


This is a daily chart of the Dow Jones index, and we can see that after a record-breaking run during February 2020, when the American economy was flying high, it crashed to a low of 18.200 just a few weeks later after the outbreak of Covid-19 as the US shut down its economy to protect citizens. This is the first time their economy has been closed down by Government consent.

The Federal Reserve threw money at the economy in the form of reducing interest rates and massive rounds of financial relief packages worth over $3 trillion, so far, and yet still with the majority of the economy flatlining, the Dow Jones Index rallied to a recent high of 24.900. This was effectively a massive bull run during a slump. It caught a lot of investors off guard, many who were selling stocks and shares seem to have sold out too soon during the first crash down to 18.200. But will those investors who started buying again after that low now suffer as the index falls lower, or will we continue to see momentum to the upside?

The issue for investors, as the Dow sits at 23.650 level, is that Banks are not paying dividends to investors this year as they try to shore up losses caused by the pandemic. This makes bank stock highly unattractive to traditional investors who would previously buy such stocks while accepting the risk of a potential fall in stock value while receiving dividend payments. They were happy to ride out any financial storms while waiting for better times ahead after the economy recovers and thus a return in the share price.
However, this crisis is not the same as the financial crisis in 2008, where investors such as Warren Buffet piled in through his investment vehicle, Berkshire Hathaway, to pick the stock up cheaply looking for long term growth. Boy, did he do well when the economy went on to surge higher?

However, Berkshire Hathaway has suffered heavy losses in this current crash, having lost an estimated $50 billion, and Mr. Buffet claims to have made a mistake in buying airline stocks and has just sold 84% of his stake in Goldman Sachs, the darling of the Wall Street investment banks. Could the writing be on the wall for US stocks now? He said that while the trains had come off the tracks in 2008, they are currently in the sidings in this event.

So, with over 20 million currently unemployed, GDP at -4.8% for March, manufacturing down, Government debt growing, and with 1.5 million cases of Covid-19 and almost 90 thousand poor souls having lost their lives, what on earth seems so attractive about buying US stocks right now?
The simple truth is that there are more buyers than sellers right now, many investors believing that the economy will bounce back quickly after similar health crises, such as Ebola, Sars Bird Flu, and Zika, where there were crashes in stocks but where they quickly recovered. And also where firms and

executives of those firms have bought their own stock on the dip lower. Some economists believe there will be a V-shaped recovery: a quick fall and a quick recovery. This sort of talk causes F.O.M.O or fear of missing out, a very big reason why we see such rallies, as they pile in buying up stock believing that the worst is over.


This is the number one reason that stocks are getting bought while the news is getting worse. But the elephant in the room is Covid-19 is still an unknown disease and the moment markets hear of second waves they will drop stocks like hot potatoes. There will highly come a time, very shortly, which will be the straw that broke the camel’s back, bringing the current bull run to a crashing end. And that will confirm what we see as a bull trap.

Categories
Forex Signals

Gold Trades Within Sideways Range – Buckle Up for A Breakout Setup! 

The safe-haven-metal prices flashed green and erased its previous session losses mainly due to intensifying trade war tensions between the US-China. However, the yellow metal hit its highest level since December of 2012 at $1,765 on Monday, but after that, the gold prices dropped sharply during the American trading session. The reason for the sharp decline could be attributed to the positive news about the COVID-19 vaccine. 

The safe-haven-metal prices flashed green and erased its previous session losses mainly due to intensifying trade war tensions between the US-China. However, the yellow metal hit its highest level since December of 2012 at $1,765 on Monday, but after that, the gold prices dropped sharply during the American trading session. The reason for the sharp decline could be attributed to the positive news about the COVID-19 vaccine. 

The safe-haven-metal prices flashed green and erased its previous session losses mainly due to intensifying trade war tensions between the US-China. However, the yellow metal hit its highest level since December of 2012 at $1,765 on Monday, but after that, the gold prices dropped sharply during the American trading session. The reason for the sharp decline could be attributed to the positive news about the COVID-19 vaccine. 

At this moment, the yellow-metal prices are currently trading at 1,733.71 and are consolidating in the range between 1,732.05 –and 1,740.38, while representing 0.18% gains and having hit the high of $1,735.84. Moreover, the broad-based US dollar modest weakness kept a lid on any additional losses in the gold and contributed to the pair’s bullish moves.

Gold futures were higher by 0.27% at $1,739.35 by 12:43 AM ET (5:43 AM GMT). Stocks, which normally have an inverse relationship with gold, were also up on Tuesday. Despite the optimism surrounding the market about Moderna (NASDAQ: MRNA) reports of positive results on Monday from its phase one experiment for its COVID-19 vaccine, the investors preferring into safe-haven yellow metal manly because the US-China trade tussle was getting worse day by day. 

Trump warned about stopping US funds to WHO if the United Nations body will not be able to show bigger improvements and independence from China in the next 30 days. The reason behind the high preference of gold in the market could be the report that the NASDAQ stock exchange set to implement new restrictions on Chinese IPOs.


Daily Support and Resistance

S1 1666.87

S2 1704.45

S3 1718.73

Pivot Point 1742.02

R1 1756.3

R2 1779.6

R3 1817.17

On the technical side, the yellow metal gold is trading sideways below 1,739 resistance and above the support level of 1,726 level. In between this range, the market is likely to offer choppy trading sessions, until the trading range gets violated. We may see an extension of a bullish trend upon the bullish breakout of 1,739, which may open further room for buying until the next target level of 1,750 and 1,759. Below 1,726 old prices can drop until 1,716 level. Let’s wait for a breakout, and then we will open a position accordingly. Good luck! 

Categories
Forex Daily Topic Forex Price Action

The H1-15M Combination Trading Has a Lot to Offer

In today’s article, we are going to demonstrate a combination strategy. The combination is made of the H1 and the 15M chart. Since these two are busy intraday charts, thus a trader can find a good number of entries with this strategy. Let us now proceed and find out how it works.

In today’s article, we are going to demonstrate a combination strategy. The combination is made of the H1 and the 15M chart. Since these two are busy intraday charts, thus a trader can find a good number of entries with this strategy. Let us now proceed and find out how it works.

In today’s article, we are going to demonstrate a combination strategy. The combination is made of the H1 and the 15M chart. Since these two are busy intraday charts, thus a trader can find a good number of entries with this strategy. Let us now proceed and find out how it works.

The above image displays the H1 chart. The chart shows that the price gets caught within two horizontal levels. At the last bounce, the chart produces a bullish engulfing candle and heads towards the North. The sellers may wait for the chart to produce a bearish reversal candle at the level of resistance. On the other hand, the buyers are to wait for a breakout at the level.

The bull wins. A good-looking bullish candle breaches through the level of resistance, closing well above the level of resistance. Some traders may trigger a long entry right after the last candle closes. Some may initiate their long entries by setting limit order above the level of resistance. Every strategy has some advantages as well as disadvantages. Anyway, we are going to flip over to the 15 M chart to trigger an entry.

This is how the 15M chart looks. The last candle closes as a bullish candle too. This suggests that the bull has taken control. The H1-15M combination traders are to wait for the price to consolidate and produce a 15 M bullish candle to offer them a long entry.

The chart produces a bearish engulfing candle followed by a bullish engulfing candle. The buyers (H1-15M combination traders) may trigger a long entry now. The stop loss is to be set below the level of new support (breakout level), and take profit may be set with 2R. Let us proceed to the next chart to find out what the price does after triggering the entry.

This is the H1 chart. The chart shows that the price heads towards the North with good bullish momentum. The buyers achieve their 1R with ease. The point we may notice that the price never even comes back to the breakout level again after triggering the entry.

By using the H1-15M strategy, traders can get an excellent risk-reward. It offers a high winning percentage as well. In most cases, the price heads towards the trend’s direction with good momentum. On the contrary, the 15M chart may not always consolidate and produce the signal candle. Thus, traders may not get as many entries as they would like. However, since it is the H1-15M combination, it still offers a good number of entries per week in major pairs.

Categories
Forex Market Analysis

Daily F.X. Analysis, May 19 – Top Trade Setups In Forex – Buckle Up for Fed Chair Powell Testimony!  

On Tuesday, eyes will be on the U.K. Jobless claims data, which are coming out shortly. COVID could badly impact the news release, and it may drive selling bias in the Sterling pairs. Besides, the G7 meeting and Fed Chair Powell testimony will also remain in the highlights today.

On Tuesday, eyes will be on the U.K. Jobless claims data, which are coming out shortly. COVID could badly impact the news release, and it may drive selling bias in the Sterling pairs. Besides, the G7 meeting and Fed Chair Powell testimony will also remain in the highlights today.

On Tuesday, eyes will be on the U.K. Jobless claims data, which are coming out shortly. COVID could badly impact the news release, and it may drive selling bias in the Sterling pairs. Besides, the G7 meeting and Fed Chair Powell testimony will also remain in the highlights today.

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.09141 after placing a high of 1.09268 and a low of 1.07966. Overall the EUR/USD pair remained strongly bullish throughout the day. The EUR/USD pair surged to its highest since May 5 on the back of a proposal, which was announced by France & Germany on Monday. Both countries joined to provide $543 in recovery fund, which would offer grants to regions of the bloc, which were highly affected by coronavirus pandemic. 

They also proposed to allow the European Commission to borrow more money on markets to finance the fund. The president of the European Central Bank, Christine Lagarde, has been urging more fiscal measures and welcomed and targeted the Franco-German proposal. She said that monetary policy transmission was as important as the policy, and there was no risk to the euro currency, which was irreversible.

Single currency euro gained on Monday due to the jointly raised debt from France & Germany. The pair EUR/USD rose above 1.0900 level and gave a robust bullish move on that day. The U.S. dollar, on the other hand, remained weaker due to increased risk appetite in the market after the hopes for a possible COVID019 vaccine increased in the market. The optimism raised after the first trial of the vaccine gave early reports positively and increased the demand for riskier assets like EUR/USD pair.

The markets were fueled by the increased hopes for a vaccine and the rising risk-appetite in the market along with the announcement of a recovery fund worth 500 billion euros by German Chancellor Merkel and French President Macron. The fund was introduced to reduce the effect of coronavirus pandemic on the region’s economy.

Across Europe, many measures have been taken to reduce the coronavirus impact on the economy, including PEPP bond purchases by ECB, the 55billio package from Italy government, and the extension of job retention scheme from the U.K.’s Chancellor. Apart from the measures mentioned above to recover the eurozone’s economy, more measures might include more asset purchases in June.


Daily Support and Resistance

  • R3 1.1089
  • R2 1.1008
  • R1 1.0961

Pivot Point 1.088

  • S1 1.0833
  • S2 1.0752
  • S3 1.0705

EUR/USD– Trading Tip

The EUR/USD is trading at 1.0817, trading below 50 periods EMA resistance at 1.0838 level. Last week, the pair bounced off over the double bottom support level of 1.07756. The direct currency pair is consolidating in a sideways range of 1.09070 – 1.09250, and violation of this will determine further trends in the market. On the higher side, the EUR/USD pair may head upward until the next target level of 1.0956 level while support holds at 1.08850 today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.21952 after placing a high of 1.22272 and a low of 1.20752. Overall the movement of GBP/USD pair remained bullish throughout the day. The pair GBP/USD spiked to fresh daily gains around 1.2200 level during early American sessions on the back of broad-based U.S. dollar weakness and increased risk appetite.

GBP was dropping continuously in previous sessions on the back of delayed Brexit talks, which could result in no-deal Brexit. Still, on Monday, it showed a recovery after the renewed U.S. dollar selling bias. The Sterling was supported by the weak U.S. dollar on Monday and was forced to move upward.

In recent months, the trade talks between the U.K. & E.U. has shown no progress due to increased frustrations over each other’s ideological approach and lack of understanding. Diplomats & officials had forecasted that before the deadline of June 30, the questions would be raised in the market for companies about future trade between U.K. & E.U. Before coronavirus, the total amount of trade between the world’s fifth-biggest economy and its biggest trading bloc accounted for 650 billion pounds.

The negotiation between U.K. & E.U. has been affected due to video-conferencing; officials suggested that if they had to conduct meeting in a face-to-face environment, then results would have been different. 

Britain left the European Union on January 31, and both sides now run under a tight schedule to sign a deal before 2021, when on 31st December U.K. will leave E.U. with or without a deal. U.K. wanted a free trade agreement with E.U. just like Canada has with E.U. or Japan while E.U. has been arguing for a wider agreement, including Britain’s proximity to the bloc.

Daily Support and Resistance

  • R3 1.2411
  • R2 1.2319
  • R1 1.2257

Pivot Point 1.2166

  • S1 1.2104
  • S2 1.2013
  • S3 1.195

GBP/USD– Trading Tip

The GBP/USD traded sharply bullish to trade at 1.2245 level despite the release of worse than expected Labor market reports from the U.K. At the moment, the cable is facing resistance around 50 EMA level, which holds at 1.2255 level. The closing of candles below 1.2260 can drive selling. Still, considering the recent bullish engulfing and long histograms of GBP/USD pair, we may see a continuation of a bullish trend in the Sterling. On the upper side, the violation of 1.2246 level may lead Sterling towards 1.2318 today.  

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.327 after placing a high of 107.503 and a low of 107.058. Overall the movement of the USD/JPY pair remained bullish that day. Despite U.S. dollar weakness, USD/JPY pair rose on Monday to touch a fresh daily high above 107.500 level and posted gains of 0.32% on that day.

The risk-on market sentiment on that day weighed on safe-haven Japanese Yen after the hopes about quick global economic recovery re-emerged in the market. A coronavirus vaccine trial gave hopes to the possible cure for the virus and revived optimism in the market to raise stock indexes.

A company named Moderna has announced that its first human trials for its coronavirus vaccine reported more or similar blood levels, which include virus-fighting antibodies in participants than the recovered patients of COVID-19. It reported that the vaccine could help improve the immune system.

According to the New York Times, A phase 1 study by Moderna has developed the vaccine in collaboration with the National Institute of Allergy, and Infectious Diseases has gone very well. Phase 2 of the study has been granted an expected enroll of 600 volunteers half older than 55 to provide additional immunogenicity data. Phase 3 will begin in July, which will aim at proving that vaccines could actually prevent the viral disease.

Meanwhile, the risk-sensitive currencies like EUR and GBP gained a lot of traction in the market against the U.S. dollar, which weighed on the U.S. dollar and decreased its demand on Monday. The U.S. dollar index, which measures the value of the U.S. dollar against the basket of six currencies, lost more than 0.5% on Monday and fell near 99.80 level.

Daily Support and Resistance    

  • R3 108.04
  • R2 107.78
  • R1 107.56

Pivot Point 107.3

  • S1 107.09
  • S2 106.82
  • S3 106.61

USD/JPY – Trading Tips

The technical side of the USD/JPY mostly remains the same as the pair continues to exhibit choppy sessions in between 107.480 – 107.029 level. Overall, the pair has formed an ascending triangle pattern, and it’s been trading within the same triangle pattern. Bullish crossover of 107.485 level may extend buying until the next resistance level of 107.650, and violation of this could determine the actual trend in the pair. So far, the traders seem confused over the market sentiments. On the lower side, the pair is facing support by the upward trendline, which holds around 107 mark. Let’s trade choppy until the violation occurs. 

All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, May 19 – Bitcoin Not Producing Enough Blocks?

The crypto market has spent the day either stagnating or slowly moving to the downside. Bitcoin is currently trading for $9,643, which represents a decrease of 2.5% on the day. Meanwhile, Ethereum lost 1.02% on the day, while XRP lost 0.6%.

The crypto market has spent the day either stagnating or slowly moving to the downside. Bitcoin is currently trading for $9,643, which represents a decrease of 2.5% on the day. Meanwhile, Ethereum lost 1.02% on the day, while XRP lost 0.6%.

The crypto market has spent the day either stagnating or slowly moving to the downside. Bitcoin is currently trading for $9,643, which represents a decrease of 2.5% on the day. Meanwhile, Ethereum lost 1.02% on the day, while XRP lost 0.6%.

SOLVE took the position of today’s most prominent daily gainer, with gains of 20.58%. Crypterium lost 12.01% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance moved down slightly since we last reported, with its value currently at 67.43%. This value represents a 0.05% difference to the downside.

The cryptocurrency market capitalization decreased slightly when compared to yesterday’s value, with its current value being $264.31 billion. This value represents a decrease of $0.9 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Bitcoin produced less than 100 blocks in a 24h period

Data presented by Bitcoin analysts known as digitalik.net shows that Bitcoin’s network generated only 95 blocks on Sunday. Bitcoin’s network generated less than 100 blocks in a 24 hour period only eight days in the last ten years, mostly in 2017.

The block time is mostly attributed to the Bitcoin halving, as the event decreased the profit margins of many miners.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization had a bearish outlook throughout the past 24 hours. It fell below the $9,735 support level (which is now acting as resistance) and established its price there. The price started going up and tested the level, now as resistance, but failed to break it. The whole day was accompanied by low volume


When it comes to trading Bitcoin, breakout traders should either wait for a big bull run that will break $10,000 or some form of a heavy volume drop towards the downside. As we stated yesterday, traders that like trading ranging moves might use leverage to scalp a few dollars here and there on moves such as the one that happened today.

Key levels to the upside                    Key levels to the downside

1: $9,735                                           1: $9,580

2: $9,870                                           2: $9,250

3: $10,010                                          3: $9,120

Ethereum

Ethereum spent the day consolidating after the move towards the upside. After failing to reach past $217.6, Ethereum retraced slightly. Due to the extremely low volume, ETH currently has no potential to go up or down in any significant way.


Ethereum gained most of its value based on fundamentals. ETH traders should take that into consideration before trading just based on technicals.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP has been the most stable cryptocurrency out of the top3 in the past week. The third-largest cryptocurrency by market cap moved only slightly to the downside in the past 24 hours, breaking the $0.205 support level. The low volume currently makes XRP almost untradeable.


The volume increased slightly during yesterday’s spike but returned to its usual low levels today. Its RSI level currently stands at the value of 50.

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Signals

EUR/AUD Engulfing Pattern at the bottom of the channel

EURAUD has been moving inside a slightly ascending channel. The last interaction of the price drove the pair to the bottom of the channel. On Monday afternoon, the price did a strong reversal on increased volume, confirmed by a second bullish candle. We see also that the MACD made a bullish transition, as the RSI reversed from the 30 level.

EURAUD has been moving inside a slightly ascending channel. The last interaction of the price drove the pair to the bottom of the channel. On Monday afternoon, the price did a strong reversal on increased volume, confirmed by a second bullish candle. We see also that the MACD made a bullish transition, as the RSI reversed from the 30 level.

EURAUD has been moving inside a slightly ascending channel. The last interaction of the price drove the pair to the bottom of the channel. On Monday afternoon, the price did a strong reversal on increased volume, confirmed by a second bullish candle. We see also that the MACD made a bullish transition, as the RSI reversed from the 30 level.

A bullish setup can be created with entry at the current levels and target at the top of the channel, and stop-loss below the last lows.

Main levels:

  • Buy order: 1.67777
  • Stop-loss: 1.67017
  • Take-Profit: 1.69037

Reward/Risk: 1.66

Risk:76 pips, or $491 per lot, 49,1 per mini-lot, and 4.91 per micro-lot

Reward: 126 pips, or  $816 per lot, 81.6 per mini-lot, and 8.16 per micro-lot.

A knowledgeable trader will invest no more than 2 percent of its funds in a trade. A rookie trader should start less, no more than 1 percent. That means five micro-lots every $1,000 in the trading account.

 

 

Categories
Forex Elliott Wave

Additional Basic Rules in Wave Analysis – Advanced Level

Introduction

Introduction

Introduction

In our previous educational article, we learned to recognize and count waves finishing the essential topics in the wave analysis process.
From now, we will start to present additional concepts and rules described by Glenn Neely in his work “Mastering Elliott Wave,” which would support the wave study.

Points of Tangency in the Guidelines

The tangency rule will help wave analysts in the process of identification between impulsive and corrective waves. This rule establishes that in a five segments pattern, only four internal movements will be touched simultaneously. This rule can be applied in impulsive and triangular formations.

The following figure illustrates a different set of Elliott wave structures where the wave analyst can apply this rule.

From the figure, the guidelines of both the first and second patterns converge each other. In the third figure, the guideline is parallel. The wave analyst must consider that the different segments that conform to the Elliott wave structure under analysis must have the same degree.

The following figure illustrates the tangency rule application in complex corrections.

From the figure, we distinguish that once touched the fourth point, corresponding to wave C completion, the price reacts against the direction of wave C. This reaction corresponds to a wave X. Its finalization will give the start of a new corrective structure from where the wave analyst could apply the tangency rule.

Rule of Time

Time is an essential element when the wave analyst makes its market study. According to the Elliott wave theory, in an impulsive structure, the two non-extended waves tend to be similar in price, time, or both. In corrective waves, a zigzag pattern its waves A and C tends to be identical in terms of time.

In short, the rule of time establishes that there can not be three adjacent waves of the same degree, which be equivalent or similar in time in a simultaneous way. 

The next picture illustrates the rule of time applied in impulsive structures.

From the figure, we observe that:

  1. If the two first segments of a pattern are equal or similar, the third segment will be different in terms of time, price, or both. The theory says that the third move will elapse the sum of the first and the second part.
  2. If the second segment lapses more than the first move, the third segment will be related in 61.8% or 161.8% of the first movement.
  3. If no one of the waves matches in terms of time, these could be adjusted in a Fibonacci ratio.

The following figure exposes the rule of time applied in corrective waves, in particular, the case of a flat pattern.

In some cases, the time elapsed by the wave C will be the sum of the time-lapsed by waves A and B. However, in the real market, the typical situation that could occur is that waves A and C will tend to match in terms of time, and wave B will be longer.

Conclusions

In this educational article, we started to present two basic rules for the wave analysis process. The first one corresponds to an extension of the canalization process, which its use allows the wave analyst to visualize with an objective method to define what kind of structure could be developing the price action.

The second one will bring the wave analyst a tool that would make a forecast of what could be the next path the market could take.

In the next educational article, we will present the advanced rules defined by Glenn Neely in his work “Mastering Elliott Wave.”

Suggested Readings

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

 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 18 – Top Trade Setups In Forex – Sideways Trading In Play!

On the news front, the economic calendar remains busy on Friday. Today’s releases may trigger some price action in the Euro and U.S. related pairs, especially on the release of German GDP, Eurozone Flash GDP, and U.S. core retail sales figures, which are due to come out during European and U.S. session respectively.

On the news front, the economic calendar remains busy on Friday. Today’s releases may trigger some price action in the Euro and U.S. related pairs, especially on the release of German GDP, Eurozone Flash GDP, and U.S. core retail sales figures, which are due to come out during European and U.S. session respectively.

On the news front, the economic calendar remains busy on Friday. Today’s releases may trigger some price action in the Euro and U.S. related pairs, especially on the release of German GDP, Eurozone Flash GDP, and U.S. core retail sales figures, which are due to come out during European and U.S. session respectively.

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

During the early Asain trading session, the EUR/USD pair was closed at 1.08181 after placing a high of 1.08509 and a low of 1.07887. Overall the movement of the EUR/USD pair remained bullish throughout the day.

EUR/USD pair gained on Friday after falling for two consecutive days and recovered some of its weekly losses at the ending day of the week. 

The pair recovered its upward trend on the back of stronger EUR against weaker USD. Euro remained robust due to better than expected economic data from the whole bloc, and the U.S. dollar was ineffective due to poor than expected data on Friday. At 11:00 GMT, the German Purchasing Price Index for April was released, which showed a decline of 0.7% against the expected decline of 0.6% and weighed on single currency Euro. At 11:45 GMT, the French Final CPI for April came in as 0.0% against the expected 0.1% and weighed on Euro. 

At 13:00 GMT, the German Prelim GDP for the quarter came in line with the expectations of -2.2%. At 14:00 GMT, the Flash Employment Change for the quarter came in as -0.2% against the expectations of -2.0% and supported Euro. The Flash GDP for the whole bloc during the quarter came in line with the expected -3.8%. The Trade Balance for the whole bloc showed a surplus by 23.5B against the expected 17.2B and supported Euro.

Better than expected Employment data and Trade Balance from the whole bloc gave strength to the single currency and moved the pair towards the upside. On the other hand, the U.S. dollar was weaker against EUR due to poor than expected Retail Sales and Industrial Production data on Friday. The headline U.S. Retail Sales dropped by 16.4% during the month of April and weighed on the U.S. dollar while the Core Retail Sales were dropped by 17.2%, which added in the weakness of the dollar against Euro and moved the pair EUR/USD on the upside direction.

The U.S. Industrial Production showed a decline by 11.2% in the month of April against the forecasted decline by 11.5%, despite falling under the expected figure, the drop in U.S. industrial production gave an impact of weak U.S. economy and weighed on U.S. dollar. Stronger Euro against U.S. dollar and weaker dollar combined gave a push to EUR/USD pair on Friday to place a high of 1.08509.

Daily Support and Resistance

  • S1 1.0673
  • S2 1.0758
  • S3 1.079

Pivot Point 1.0843

  • R1 1.0874
  • R2 1.0928
  • R3 1.1013

EUR/USD– Trading Tip

The EUR/USD is trading at 1.0817, trading below 50 periods EMA resistance at 1.0838 level. Last week, the pair bounced off over the double bottom support level of 1.07756. On the 4 hour chart, the EUR/USD is closing candles within a symmetric triangle pattern, which drives mixed sentiment in the market. Extension of selling below 1.0843 level may lead the EUR/USD prices towards 1.07782 level, and below this, the next support is likely to be found around 1.0730. Consider staying bullish above and bearish below 1.0770 level today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.21040 after placing a high of 1.22386 and a low of 1.31013. Overall the movement of pair remained bearish throughout the day. The GBP/USD pair was dropped to its fresh seven-week lowest level near 1.2100 on Friday on the back of the sudden pickup in demand for the U.S. dollar at last hours. Despite poor than expected Retail Sales data from the United States on Friday, the pair GBP/USD was dropped to its multi-week low level at the ending day of the week.

The growing fears of second-wave of coronavirus faded the hopes for quick global economic recovery and weighed on the U.S. dollar. The already weaker trend was then escalated after the relationship between the United States and China started to become even worse. The Sino-US relation headed towards a renewed trade war, especially after the U.S. commerce department cited security concerns against China on Friday. The U.S. Commerce Dept. took another step to cut off Chinese telco Huawei from the overseas chip manufacturing companies. 

The U.S. also accused Huawei of building backdoors in network infrastructure to help the Chinese government spying efforts. Huawei repeatedly denied this accusation of spying efforts by Trump’s administration. Chinese officials have said they would respond to this, which decreased the risk appetite and gave a push to the greenback’s perceived safety-haven status. This ultimately dragged down the pair GBP/USD on Friday as there was no economic data to be released from the United Kingdom. The pair’s movement was solely dependent on the greenback’s demand.

Furthermore, over the weekend, the Cabinet Office Minister Michael Gove said that Brexit negotiations were going well, but E.U. needed to show some flexibility. He added that very little progress was made after the third Brexit talks, which were conducted on Friday. Both sides have shown frustration over the slow progress in trade talks, and the U.K. has geared up its preparations to leave the block without any deal. The U.K. has already said that it will not extend the negotiations process beyond December 31. 

The sticking point during the negotiations has been the access to fishing waters. E.U. wanted to have the same access they had to the U.K.’s fishing water, but Britain was not allowing it. If no-deal Brexit happened then, both parties would have to follow the rules of the World Trade Organization. On the other side, E.U.’s top negotiator, Mr. Barnier, has said that the U.K. could not have the best of both worlds, and if it were meant to be No-deal Brexit, then E.U. would step up to prepare for no-deal outcomes. 

The E.U. has also denied that the U.K. was wrong to think that slowing the process of talks would end up E.U. accepting the deal at any price. Growing fears of No-deal Brexit also caused GBP’s weakness against the U.S. dollar and dragged the pair to its lowest for seven weeks.

Daily Support and Resistance

  • R3 1.2137
  • R2 1.2123
  • R1 1.2104
  • Pivot Point 1.209
  • S1 1.2071
  • S2 1.2057
  • S3 1.2038

GBP/USD– Trading Tip

The GBP/USD fell into the oversold zone to trade at 1.2070 level, but the recent closing of Doji candle and bullish engulfing above 1.2076 support zone is likely to drove bullish correction in the market. On the higher side, the GBP/USD is likely to provide resistance around 1.2177, while the support level continues to hold around 1.2070. Below this, the next support could be found around 1.2040, which is extended by the bottom of the downward channel and can be seen on the 4-hour chart. Let’s consider staying bullish above 1.2070 today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.086 after placing a high of107.434 and a low of 106.855. Overall the movement of the USD/JPY pair remained bearish throughout the day. The decreased appetite for the risk helped the safe-haven JPY to gather strength in the early American trading session and dragged the USD/JPY pair prices on Friday below the 107 level. However, the pair USD/JPY managed to erase some of its daily losses after gaining traction in the late trading session.

 At 4:50 GMT, the Purchasing Price Index for the year from Bank of Japan was released, which dropped to -2.3% against the forecasted decline by -1.4% and weighed on JPY. From the American side, the closely watched Retail Sales data was released, which came in poor than expectations and weighed on the U.S. dollar. At 17:30 GMT, the Core Retail Sales for April dropped by 17.2% compared to -8.6% forecasted. The Retail Sales from the United States also declined in April by 16.4% while it was expected to be decreased by 12%.

More than expected decline in the total value of sales at the retail level from the United States during the previous month showed a decline in consumer spending and gave the negative impact of the U.S. economy, which in turn weighed on U.S. currency. Weak USD dragged the USD/JPY pair along with it below the 107 level on Friday.

The Empire State Manufacturing Index showed a decline to 48.5 against the expected reduction of 65.0. At 18:15 GMT, the Capacity Utilization Rate, which measures the capacity by which raw-material was used by manufacturers during April increased to 64.9% from the forecasted 63.9% and supported USD.

The Industrial Production in April also dropped by 11.2% but remained less than the forecasted decline of 11.3%. At 19:00 GMT, the Consumer Sentiment from the University of Michigan showed an improvement in consumers’ confidence over the U.S. economy when released as 73.7 against 68.0 in May. 

Daily Support and Resistance    

  • R3 109.37
  • R2 108.57
  • R1 108.12

Pivot Point 107.33

  • S1 106.88
  • S2 106.09
  • S3 105.64

USD/JPY – Trading Tips

On Monday, the USD/JPY traded bearishly to trade below the support level of 107, which marked the 50% Fibonacci retracement level. The USD/JPY is holding at 107.05, where the 50 EMA is supporting the pair, and it may drop further below the 107 level. At the moment, the 4-hour candle appears to close below 107 support become resistant, and this may drive more selling in the USD/JPY pair. The pair may extend selling until 106.600 level, whereas the closing of buying candles above 107 can trigger bullish bias until 107.50. By the way, bearish bias seems solid today. All the best for today! 

Categories
Crypto Market Analysis

Daily Crypto Review, May 18 – Robert “Rich Dad Poor Dad” Kiyosaki predicts $75,000 BTC

The crypto market has spent the weekend mostly trying to break its resistance levels, which it did to a certain extent. Still, Bitcoin is under $10,000, and the general trend direction is not completely bullish. Bitcoin is currently trading for $9,778, which represents an increase of 2.62% on the day. Meanwhile, Ethereum gained 5.91% on the day, while XRP gained 1.17%.

The crypto market has spent the weekend mostly trying to break its resistance levels, which it did to a certain extent. Still, Bitcoin is under $10,000, and the general trend direction is not completely bullish. Bitcoin is currently trading for $9,778, which represents an increase of 2.62% on the day. Meanwhile, Ethereum gained 5.91% on the day, while XRP gained 1.17%.

The crypto market has spent the weekend mostly trying to break its resistance levels, which it did to a certain extent. Still, Bitcoin is under $10,000, and the general trend direction is not completely bullish. Bitcoin is currently trading for $9,778, which represents an increase of 2.62% on the day. Meanwhile, Ethereum gained 5.91% on the day, while XRP gained 1.17%.

Numeraire took the position of today’s most prominent daily gainer, with gains of 11.28%. Electroneum lost 14.78% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance moved down slightly since we last reported, with its value currently at 67.48%. This value represents a 0.73% difference to the downside.

The cryptocurrency market capitalization increased slightly when compared to Friday’s value, with its current value being $265.23 billion. This value represents an increase of $6.13 billion when compared to the value it had on Friday.

What happened in the past 24 hours

Robert Kiyosaki bullish on Bitcoin

Robert Kiyosaki, a famous businessman and best selling author (most famous by his book “Rich Dad, Poor Dad”) has announced his bullish stance on Bitcoin and even made a prediction regarding its price.

Kiyosaki tweeted that BTC’s price is heading towards $75,000 in three years. He also mentioned that he holds gold and silver besides Bitcoin.

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization spent the weekend mostly testing new resistance levels and then retracing slightly to the most recent supports. All in all, the weekend was net-positive for Bitcoin as its price increased slightly. The $9,735 resistance level was broken, and Bitcoin is consolidating above it.


When it comes to trading Bitcoin, breakout traders would either wait for a big bull run that will break $10,000 or a heavy volume drop towards the downside. On the other hand, traders that like ranging moves might use leverage to scalp a few dollars here and there, as Bitcoin is currently moving within a few narrow support-resistance levels.

Key levels to the upside                    Key levels to the downside

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

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

3: $10,500                                          3: $9,250

Ethereum

Unlike Bitcoin, Ethereum did not move slowly to the upside. The second-largest cryptocurrency by market cap rushed to the upside, reaching the $217.6 resistance level where it lost the momentum. However, the gains ETH made over the weekend were greater than Bitcoin. The sudden surge in price was mostly due to good news and ETH-based events during this weekend.


Without the additional boost in terms of fundamentals, or Bitcoin breaking $10,000, Ethereum will have a hard time going above $217.6 level.

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

XRP spent the weekend moving sideways for the most part, with the exception of one slight move to the upside, which brought it above the $0.205 resistance. The third-largest cryptocurrency by market cap has finally broken the pattern of going above and below the $0.2 support, but only up to the $0.205 level.


The volume increased slightly during the spike, while the RSI level currently stands at the value of 60.

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Fibonacci

Fibonacci Trading: How Fibonacci Levels Give Clues to the Traders

In today’s Fibonacci lesson, we are going to demonstrate an example of a chart, which makes a bearish move. We dig into the charts and find out how we can take an entry based on Fibonacci levels and how the levels may help us giving clues to execute our plan. Let us get started.

In today’s Fibonacci lesson, we are going to demonstrate an example of a chart, which makes a bearish move. We dig into the charts and find out how we can take an entry based on Fibonacci levels and how the levels may help us giving clues to execute our plan. Let us get started.

In today’s Fibonacci lesson, we are going to demonstrate an example of a chart, which makes a bearish move. We dig into the charts and find out how we can take an entry based on Fibonacci levels and how the levels may help us giving clues to execute our plan. Let us get started.

The above figure shows an H1 chart. The chart shows that the price makes a bearish move at a moderate pace. It seems that the price finds its support. It has been having consolidation around the level of support having bounces three times. The last candle in this chart comes out as a bullish Marubozu candle. This may push the price towards the North. However, the sellers may still have the hope that they may get a bearish breakout here. Let us proceed to the next chart to find out what the price does.

The chart produces a bearish engulfing candle breaching the level of support. The pair trades for two more candles after the breakout. An important point is to be noticed here that the price is having an upside correction after the breakout. Sometimes price keeps trending after a breakout, whereas sometimes price makes the correction. Fibonacci levels have an important role to play in this. Thus, if we use Fibonacci levels, we are able to find out whether the price trends or makes correction well ahead. Let us now find out how we take the entry. We are to flip over to the minor chart. Since this is an H1 chart, we may flip over to the 15 M chart to trigger the entry.

Look at the arrowed candle. The candle comes out as a bearish Marubozu candle forming track rail. The candle is formed right at a flipped resistance. A short entry may be triggered right after the arrowed candle closes. The chart also shows how the price heads towards the South after the signal candle. Let us now see the H1 chart with Fibonacci levels.

The chart shows that the price trends from 78.6% level. Thus, it may reverse at 138.2%. It hits 161.8% here. However, we may set our target at 138.2% if the price trends from 78.6% to be safe. The Stop Loss may be set here above 100.0 Fibonacci level.

These are the things we must remember when we trade a chart trending from a 78.6% level.

  1. The price may make a reversal at 138.2.
  2. If the price trends from 78.2%, it most probably makes a correction after the breakout. Otherwise, it does not give a good risk-reward as well.