Tag: Technical Analysis

Gold Holds Below Top Triple Pattern – Can Retail Sales Drive Breakout?

Post author By Ali B.
Post date 15 May, 2020
No Comments on Gold Holds Below Top Triple Pattern – Can Retail Sales Drive Breakout?

The safe-haven-metal prices extend its 3-winning streak and take bids near 3-weeks high around $1,733 while representing 0.12% increase on the day as US-China tension keeps traders in a cautious mode. As well as, investors turned into the safe-haven-metal after mixed Chinese industrial production and retail sales data, as well as Thursday’s U.S. jobless claims data.

Earlier in the morning, the yellow-metal erases some gains in the wake of Increasing odds of no negative rates. While the possibility of another stimulus recently favored the market risk-tone before the China data. At this moment, the yellow-metal prices are currently trading at 1,735.55 and consolidate in the range between the 1,728.84 – 1,738.61.

China showed a confusing picture of its recovery from the COVID-19 virus as it’s said that industrial production in April rose 3.9% year-on-year, higher than the 1.5% predicted by analyst forecasts. Whereas, it also said that retail sales in the same month slipped 7.5% year-on-year, against analyst estimates of a 7% drop. The U.S. showed that 2.981 American citizens lost their jobs during the past week, Anyhow, the number of unemployment has been declining gradually over six weeks, but 36 million claims have been filed so far since late March.

On the other hand, the market risk sentiment got some support during the earlier morning from the increasing odds of another stimulus from the U.S., as well as, the reason for the risk-on market sentiment could also be attributed to the statement from the Fed policymakers about ruled out negative Fed rates.

Apart from these, the yellow-metal bullish moves also bolstered by the bill, which is recently passed by U.S. Senate about enabling the administration to fresh levy sanctions on Chinese officials involved in the Xinjiang case.

Support Resistance
1722.44 1752.94
1703.97 1764.97
1691.94 1783.44
Pivot Point 1734.47

Gold prices continue to hold below the triple top resistance level of 1,740. Bullish crossover of this level may drive more buying in gold, leading to its prices towards the next resistance level of 1,748. The support continues to hold around 1,728 and 1,722 level today, while the MACD is showing neutral sentiments ahead of the release of U.S. retail sales data. Besides this, the 50 EMA is also supporting the gold’s bullish bias today. Let’s keep an eye on 1,740 as selling can be seen below this, and buying above the same level today. Good luck!

Tags Forex, Fundamental Analysis, Gold, Technical Analysis, Technical Outlook, Trade Setup, trading, XAU/USD

Forex Market Analysis

Daily F.X. Analysis, May 15 – Top Trade Setups In Forex – U.S. Retail Sales in Highlights!

Post author By Ali B.
Post date 15 May, 2020
No Comments on Daily F.X. Analysis, May 15 – Top Trade Setups In Forex – U.S. Retail Sales in Highlights!

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 currency pair flashing green, but remains trading in the confined range around above the 1.0800 level ahead of Germany’s preliminary gross domestic product (GDP) for the first quarter. The broad-based U.S. dollar modest weakness helping the currency pair to stay positive and kept a lid on any additional losses, at least for now. For example, the currency pair is looking directionless as the S&P 500 is sidelined, and the Asian stocks are adding in a mixed performance.

The EUR/USD is trading at 1.0806 and consolidates in the range between the 1.0798 – 1.0809. However, the traders are keenly awaiting Germany’s preliminary gross domestic product ahead of a strong position.

At the data front, Germany’s preliminary gross domestic product (GDP) for the first quarter, which is scheduled to publish at 06:00 GMT, is anticipated to show the old continent’s biggest economy declined by 2.2%, having increased by 0.4% in the final 3-months of 2019. It should be noted that the GDP prints of -2.2% or lower would be considered the worst reading since the ist-quarter of 2009.

Germany had declared a secure national lockdown on March 22, which meant the economic activity came to a stop only in the last 8 or 9 of the 1st-quarter. In contrast, Germany is dependent on the dragon nation, which had already faced a sharp recession in the activity in the first two months of the year, mainly due to the coronavirus pandemic.

Therefore, there are many chances that Germany reporting a bigger-than-expected recession in the first quarter will not be rejected. As we already mentioned, the economists are expecting a 2.2% decrease, as per Germany’s DIW economic institute, the economy expected declined by 2% in the first quarter. Alternatively, the DIW expects a 10% decline in the GDP in the second quarter.

Moving on, the EUR/USD currency pair may not pay any significant attention if the GDP prints in line with estimates as the market already priced in the worst condition of significant economies during the March and more so in April caused by coronavirus outbreak.

The currency pair could be able to take bids only if prints would be a surprise beat on expectations, but the gains would be temporary or short-lived if the risk sentiment turns heavy. Looking forward, market participants now look forward to Germany’s preliminary gross domestic product (GDP) for the first quarter, which is scheduled to publish at 06:00 GMT. The trade/virus updates could also entertain market traders.

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

On Friday, the EUR/USD is trading at 1.0807, bouncing off over the double bottom support level of 1.07756. On the 4 hour chart, the EUR/USD is closing bullish candles above upward channel trendline, but at the same time, the 50 EMA and horizontal resistance seem to drive bearish sentiment for the EUR/USD pair. 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 currency pair failed to stop its 5-day losing streak and dropped below the 1.2210 level while representing 0.15% losses on the day mainly due to the Brexit worries and coronavirus crisis. The broad-based U.S. dollar over-all bullish sentiment also weighed on the currency pair and kept the pair down. The GBP/USD is trading at 1.2208 and consolidates in the range between the 1.2203 – 1.2237. However, the traders are cautious about placing any strong position as they are keenly awaiting today’s U.S. consumer-centric data.

At the Brexit front, the European Union (E.U.) and the United Kingdom moderators are still pushing to cancel Brexit talk, which decided to happen through video conferences. At the same time, the European Commission’s (E.C.) took legal action against the U.K., which made talks tougher to happen. The European Commission initiated legal proceedings against the U.K. on Thursday, while accusing the U.K. about failing to comply with E.U. law on free movement which eventually keeps the cable currency under pressure and contributes to the pair’s declines.

On the flip side, the UK PM Boris Johnson keeps its preference high toward border checks at the Northern Ireland (N.I.) while the N.I. Secretary Brandon Lewis has repeatedly said there shall not be a border down the Irish Sea.

At the coronavirus front, the infected cases by coronavirus reached around 233 thousand overall in England, including 25 thousand in London,

as per the latest research by the Public Health England (PHE) and Cambridge University. In the meantime, the United Kingdom is talking with Swiss drugmaker Roche Holding AG about to buy an accurate COVID-19 antibody test after getting preliminary approval by the European Union and the United States.

Apart from this, the Bank Of England governor Andrew Bailey showed a willingness to take further action but denied rate cuts. The reason for the pairs bearish moves could also be attributed to the statement of the British central bank’s citizen panel in which they expect COVID-19 to have a large and enduring influence on the economy and society more broadly.

At the USD front, the broad-based U.S. dollar bolsters by the receding expectations of negative Fed rate and the increased probabilities of further stimulus from the government. While the Dollar Index (DXY), a gauge of the greenback versus significant currencies, remains mildly bid around 100.30 by the press time.

Daily Support and Resistance

R3 1.2577
R2 1.2508
R1 1.2422

Pivot Point 1.2353

S1 1.2268
S2 1.2198
S3 1.2113

GBP/USD– Trading Tip

On the last trading day of the week, the GBP/USD is trading sideways at 1.2200 after breaking below the narrow trading range of 1.2320 – 1.2245. The Cable has formed a new range of 1.2245 – 1.2186, however it’s still holding below 50 EMA, which is extending resistance around 1.2260 level today. On the 4 hour chart, the GBP/USD is gaining support at 1.2180 level while the 50 EMA and horizontal resistance stay at a level of 1.2245.

The violation of the sideways trading range of 1.2245 – 1.2180, and the release of U.S. retail sales may help drive breakout in the GBP/USD pair.

The GBP/USD pair may lead its prices towards an immediate support level of 1.2190 and 1.2150 in case of positive date; elsewhere, the GBP/USD pair may soar towards 1.2240 and 1.2310.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.224 after placing a high of 107.363 and a low of 106.773. Overall the movement of the USD/JPY pair remained bullish throughout the day. After dropping below 107 level on Thursday, the USD/JPY pair regained its strength and posted gains for the day on the back of the improved market sentiment. The increased claims for jobless benefits from the United States during the last week failed to weigh on the U.S. dollar. A total of 2.9M Americans applied for unemployment benefits in the previous week against the expected 2.5M.

At 17:30 GMT, the Unemployment Claims for last week exceeded the expectations of 2500K and came in as 2981K and weighed on the U.S. dollar. The Import Prices for April were declined by 2.6% against the forecasted decline by 3.1% and supported the U.S. dollar.

The U.S. Dollar Index ignored the job data from the United States and moved above 100.40 level on Thursday, which helped USD/JPY pair to stretch its gains. Another factor adding in the upward trend of the USD/JPY pair was the comments from Donald Trump in support of the dollar. He said that a strong dollar was a great thing that could help in fast economic recovery after the coronavirus, this triggered the U.S. dollar buying wave and extended USD/JPY pair’s gains.

From the Japan side, at 4:50 GMT, The M2 Money Stock for the year from Japan was recorded as 3.7% against the forecast of 3.4% and supported Japanese Yen. At 10:59 GMT, the Prelim Machine Tool Orders for the year showed a decline of -48.3% in comparison to the previous -40.7%.

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

The safe-haven Japanese yen continues to trade in line with our previous forecasts. On Friday, 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!

Tags Daily Brief, Dollar, EUR-USD, Euro, Forex, Forex Academy, Fundamental Analysis, GBP-USD, Pound, Technical Analysis, Technical Outlook, yen

Crypto Market Analysis

Daily Crypto Review, May 15 – Bitcoin Rejected from $10,000 – What’s Next?

Post author By Ilija Rankovic
Post date 15 May, 2020
No Comments on Daily Crypto Review, May 15 – Bitcoin Rejected from $10,000 – What’s Next?

The crypto market has spent the past day testing its support and resistance levels and was generally in a state of indecisiveness. Bitcoin is currently trading for $9,671, which represents an increase of 1.65% on the day. Meanwhile, Ethereum gained 0.57% on the day, while XRP lost 0.03%.

OmiseGO took the position of today’s most prominent daily gainer, with gains of 27.28%. Crypterium lost 15.56% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance moved up slightly once again since we last reported, with its value currently at 68.21%. This value represents a 0.45% difference to the upside.

The cryptocurrency market capitalization increased slightly when compared to yesterday’s value, with its current value being $259.1 billion. This value represents an increase of $2.42 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Visa files a Patent for Digital Currency

Visa has filed a patent application with the US Patent and Trademark Office to create digital currency on its own blockchain. While the patent was filed all the way back in Nov 2018, Visa decided to publish the application just yesterday (May 14).

The patent is for a digital currency and not a cryptocurrency, as it states that they want to create a digital currency that is recorded on a blockchain and centrally controlled.

_______________________________________________________________________

Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization was quite indecisive in its price movements in the past day. After a couple of days of making solid gains, the bull presence subsided and Bitcoin got rejected from crossing above $10,000, which triggered a pullback. While the pullback was sharp and brought its price back to $9,200 in a matter of hours, it quickly recovered and is now above $9,500 and going up.

If Bitcoin manages to cross the $10,010 mark with sufficient volume, traders might want to jump the train on the trade and start looking for a good entry.

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 mirroring Bitcoin but in a much more toned fashion. The second-largest cryptocurrency by market cap started retracing as bull presence left the market but quickly stopped at the support level of $198. It is currently on the upturn and solid above that support level.

However, Ethereum’s RSI is pretty high while its volume did not move from the low levels it was at, so any big move is out of the question until at least some parameter changes.

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 did not have a good time in the past 24 hours, as its price movements were bound within a tight range, right between the resistance level of $0.205 and support level of $0.2. XRP desperately tried to move out of it, but with no success.

However, the $0.2, which was heavily tested, ended up holding the price from going down, which is great news. XRP is now having an uptick, which may start poking the top level.

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: $0.178

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

Forex Market Analysis

Safe Haven Gold on Fire – Triangle Pattern Breakout!

Post author By Ali B.
Post date 14 May, 2020
No Comments on Safe Haven Gold on Fire – Triangle Pattern Breakout!

During the early U.S. session, the safe-haven-metal prices extend its 3-day winning streak and rise to a 4-day high level of $1,718.35 while taking rounds to $1,716.50, mainly due to the depressing speech U.S. Federal Reserve Chair Jerome Powell about the economic downturn. Despite the Federal Reserve policymakers’ refusal for the negative rate, the yellow-metal continued to take bids as the U.S. President Donald Trump renewed calls for the negative Fed rates.

The US-China intensifying tension and the risk of coronavirus second wave also weighed on the risk sentiment, which eventually supported the safe-haven assets like gold. At this moment, the safe-haven-metal prices are currently trading at 1,716.21 and are consolidating in the range between 1,711.21 and 1,719.80.

The Federal Reserve Chair Powell said that negative interest rates were not needed yet. In the meantime, the Cleveland Federal Reserve President Loretta Mester said, we cannot consider “negative rates” as an excellent tool for supporting the economy. If talking about Powell’s speech, the Federal Reserve’s chairman warned about the scope and speed of the continuing economic downturn while comparing the recession pace with the World War II recession.

The reason behind the risk-off market sentiment is the US-China tussle. It would be worth mentioning that the recent aggressive words from China came after U.S. President Trump directed the board of Federal retirement savings fund to stop investing in the Chinese stocks.

Recently, the XAU/USD broke out of the symmetric triangle pattern, which was providing resistance at 1,718, and now it’s trading bullish at 1,735. The recent bullish trend in gold came in response to worse than expected Jobless claims data from the U.S. As per the U.S. labor department, the advance figure initial claims were 2,981,000, a drop of 195,000 from the prior week’s updated level is reported. A weaker dollar has triggered the bullish trend in gold, and now it’s likely to lead gold prices towards 1,740. Now, we may see bearish correction below 1,740, while further buying trades can be taken above 1,720. All the best!

Tags Forex, Gold, Technical Analysis, Trade Setup, trading, XAU/USD

Forex Market Analysis

USD/CAD on a Bullish Mode – Forms Higher’s High & Highers Low Pattern In Play!

Post author By Ali B.
Post date 14 May, 2020
No Comments on USD/CAD on a Bullish Mode – Forms Higher’s High & Highers Low Pattern In Play!

During Thursday’s Asian trading hours, the WTI crude oil prices looking directionless despite Wednesday’s decrease US inventory report. However, the crude oil prices trading mostly unchanged on the day near the $25.40. Technically, the 4-hour chart shows prices are confined between the tight price range outlined by the trendlines from May 7 and May 13 highs and May 6 and May 7 lows.

The reason for the confined trading could be attributed to the risk-off market sentient and second wave of coronavirus, which turned out to be one of the key factors that kept a lid on any gains in oil prices. The WTI crude oil is trading at 25.82 and consolidate in the range between the 25.20 – 26.00.

A range breakout would indicate a continuation of the recovery rally from lows below $10 observed in April. However, a bearish reversal would be confirmed if the range is breached to the downside.

Thus, the breakout can’t be rejected because the US inventory report released Wednesday showed the 1st-decline in outputs since January. The US crude inventories dropped by 745,000 barrels last week, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a 4.1 million-barrel rise.

Support Resistance

1.4032 1.4144

1.3962 1.4186

1.3919 1.4256

Pivot Point 1.4074

For the time being, the investors are cautious about placing any strong position mainly due to the fear of coronavirus second wave caused y easing lockdowns. As well as, the reason for the risk-off market sentiment could also be attributed to the renewed concerns concerning the economic slowdown.

Tags Forex, Technical Analysis, Technical Outlook, Trade Setup, trading, USD/CAD

Forex Market Analysis

Daily F.X. Analysis, May 14 – Top Trade Setups In Forex – U.S. Jobless Claims in Focus!

Post author By Ali B.
Post date 14 May, 2020
No Comments on Daily F.X. Analysis, May 14 – Top Trade Setups In Forex – U.S. Jobless Claims in Focus!

The reason for the risk-off market sentiment could be attributed to the latest disagreeability about negative rates showed by Fed Chair Powell as well as Powell’s comments on the economy keep the market risk-tone heavy and helping the greenback to take bids. Let’s wait for the U.S. Jobless claims to predict further price action in the market.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing red and dropped from 1.0896 to 1.0812 on Wednesday while representing 0.10% losses on the day and currently drawing offers near below 1.0810 mainly due to the broad-based U.S. dollar strength in the wake of risk-off market sentiment. The reason for the risk-off market sentiment could be attributed to the latest disagreeability about negative rates showed by Fed Chair Powell as well as Powell’s comments on the economy keep the market risk-tone heavy and helping the greenback to take bids. The EUR/USD pair is trading at 1.0808 and consolidates in the range between the 1.0804 – 1.0825. However, traders are keenly awaiting the U.S. key data ahead of placing any strong position.

As we already mentioned that the market participants avoided risker assets and started buying the U.S. dollar mainly due to the risk-off market sentiment in the wake of renewed growth concerns. The Federal Reserve’s chairman gave warning on Wednesday about the scope and speed of the ongoing economic downturn while compared the slowdown pace with the World War II recession. Whereas, the Fed Chair Powell hints that the ongoing recession could be for the long-term if Congress fails to provide additional fiscal support.

Moreover, the Fed Chair Powell said we are not looking forward to keeps the negative rates. As well as, the Cleveland Federal Reserve President Loretta Mester said, “Negative rates not a tool we think we would use to support the economy. The reasons for the heavy risk-tone could also be attributed to the US-China tussle. It should be noted that the recent fire shots of words from China came after the U.S. President Trump ended Federal retirement savings fund from diversifying into the Chinese stocks.

On the other hand, the final German Consumer Price Index for April, which is scheduled to release at 06:00, could fail to leave any strong impact on the market until or unless the number prints significantly below estimates. As in result, the shared currency may face stronger bearish moves. At the coronavirus front, the number of confirmed coronavirus cases increased to 172,239, with a total of 7,723 deaths reported according to the latest figures from the German disease and epidemic control center, Robert Koch Institute (RKI).

On the other hand, from the United States, the PPI data came in poor than expected and was almost ignored by the market traders. The Producer Price Index from the U.S. for April was dropped by -1.3% against the forecasted -0.5%. The Core PPI from the U.S. for April also dropped to -0.3% against the expectations of -0.1%. The U.S. dollar ignored the data and was supported by Powell’s speech on Wednesday, so the strong U.S. dollar dragged down the upward movement of EUR/USD pair on Wednesday and ended the pair’s day with a bearish candle.

Market participants look forward to the key U.S. data, which highlights the U.S. Initial Jobless Claims, scheduled to release at 12:30 GMT, and final German Consumer Price Index for April, which is scheduled to release at 06:00, as these key data could influence the market moves. The trade/virus updates also will be key to watch.

Daily Support and Resistance

S1 1.0722
S2 1.0783
S3 1.0811

Pivot Point 1.0843

R1 1.0871
R2 1.0904
R3 1.0964

EUR/USD– Trading Tips

On Thursday, the EUR/USD price dropped to test the support level of 1.0800, which is extended bu the upward channel. On the chart, the EUR/USD os closing a Doji above upward channel trendline, but at the same time, the 50 EMA and horizontal resistance seems to drive bearish sentiment for the EUR/USD pair. Continuation of selling until 1.0778 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.

GBP/USD – Daily Analysis

During Thursday’s early Asian trading hours, the GBP/USD currency pair failed to stop its 4-day losing rally and dropped around 1.2200 while representing 0.26% losses on the day mainly due to the Wednesday’s downbeat performance of the U.K. data. The Brexit and coronavirus fears also weighed on the British Pound. Moreover, the broad-based U.S. dollar bullish trend in the wake of risk-off market sentiment keeps the currency under pressure. At the press time, the GBP/USD currency pair is currently trading at 1.2189 and consolidates in the range between the 1.2187 – 1.2242. However, traders are keenly awaiting the U.S. Jobless Claims for near-term direction in the greenback.

As we already mentioned that the reason for the pair’s declines could be attributed to the multiple factors, like downbeat U.K. fundamentals, comprising sluggish data, coronavirus outbreak, Brexit worries, and most impactful is U.S. dollar strength.

The broad-based U.S. dollar is taking bids due to its safe-haven demand in the wake of risk-off market sentiment. Also, the Federal Reserve’s latest disagreeability from the negative rates bolstered the U.S. dollar strength. As well as, the ongoing uncertainty about coronavirus and the US-China trade war also keeps the market risk-tone heavy, which also contributed to the greenback’s gains. The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.03% to 100.317 by 11:47 AM ET (4:47 AM GMT).

However, the risk-off market sentiment further bolstered by the second wave of virus spread in major economies as well as the US-China tussle. At the U.K. data front, yesterday’s downbeat performance of the U.K. data urged the British Chancellor Rishi Sunak to say that there are many chances that the Uk economy will suffer in the deeper recession this year, and we’re already in the middle of that as we speak.

Powell said that Fed would continue using its tools in the betterment of economic recovery; however, it would need White House and Congress by its side for new fiscal aid. Powell stressed that the outlook of the economy was still uncertain, and risks remain downside. He did not give any signals about the negative interest rates and said that the need for them has not yet come. The pair dropped to 1.2210 level after Powell’s speech on the back of U.S. dollar strength on Wednesday and ended its day with a bearish candle.

Daily Support and Resistance

R3 1.2577
R2 1.2508
R1 1.2422

Pivot Point 1.2353

S1 1.2268
S2 1.2198
S3 1.2113

GBP/USD– Trading Tip

The GBP/USD bearish at 1.2200 after breaking below the narrow trading range of 1.2320 – 1.2245. The Cable is still holding below 50 EMA, which is extending resistance around 1.2350 level today. On the 4 hour chart, the GBP/USD is gaining support at 1.2185 level while the 50 EMA and horizontal resistance stay at 1.2365 level. Today, the U.S. jobless claims may drive the selling trend in the GBP/USD pair to lead its prices towards an immediate support level of 1.2190 and 1.2150. Conversely, the worse than expected Jobless Claims will lead the GBP/USD pair towards 1.2240 and 1.2310.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.025 after placing a high of 107.275 and a low of 106.741. Overall the movement of USD/JPY remained Bearish throughout the day. The USD/JPY extended its previous day’s losses and continued its downward movement on Wednesday to post losses for the 2nd trading session.

The pair followed the previous bearish trend in the early trading session, but after the speech from Jerome Powell, pair started to recover some of its daily losses and move in the reverse direction. However, the pair USD/JPY failed to reverse its direction due to poor than expected PPI reports from the U.S.

At 4:50 GMT, Japan’s Bank Lending figure for the year exceeded the expectations of 2.0% and came in as 3.0% in favor of Japanese Yen. The Current Account Balance from Japan’s Ministry of Finance showed a decline to 0.94T against the forecasted 1.29T for March. At 10:02 GMT, the Economy Watchers Sentiment dropped to a low of 7.9 against the forecasted 10.1 and showed that current economic conditions were not right.

Furthermore, Safe-haven Yen was also supported by the growing fears of the second wave of coronavirus along with the increased tensions between China &US, which weighed on the U.S. dollar.

From the American side, the Core Purchasing Price Index (PPI) for April showed a decline to -0.3% against the forecasted decline by -0.1% and weighed on U.S. dollar, which in turn added in the downfall of USD/JPY pair. The pair USD/JPY further dropped after the release of PPI, which also declined to -1.3% against the forecasted -0.5%.

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

The USD/JPY traded bearishly to trade below the support level of 107, which marked the 50% Fibonacci retracement level. Currently, the USD/JPY is holding at 106.875, where the 50 EMA is resisting the pair, and it may drop further below the 107 level. At the moment, the 4-hour candle seems 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!

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

Forex Basic Strategies

Best Way To Trade The ‘Pin Bar’ Forex Chart Pattern – The Pin Bar Reversal Strategy!

Post author By Reddy Shyam Shankar
Post date 14 May, 2020
No Comments on Best Way To Trade The ‘Pin Bar’ Forex Chart Pattern – The Pin Bar Reversal Strategy!

Introduction

Price action or Candlestick analysis combined with some of the factors and confirmations is more reliable as they work out even without using too many indicators on the price chart. Using many indicators on the charts makes it difficult for traders to see the bigger picture (opportunities) in the market. We have numerous candlestick patterns in trading, but there are few on which many traders have their eyes on. One of those is the Pin bar candlestick pattern.

The pin bar candle is mostly used as a reversal pattern. A pin bar typically consists of a price bar with a long wick or shadow. The region between the open and close of the pin bar is called its real body, and a long tail is known as the wick. Pin bars generally have small real bodies in comparison to their long wick. The body of the pin bar is one-third of the total size of the candle. The long wicks of the candle show the area of the price that was rejected and signifies that the price will now move in the opposite direction of the wick.

The psychology behind trading a pin bar candle is that when a price is moving in one direction and reaches significant support or resistance level, it gets rejections. Rejection in a downtrend signifies that the seller pressure (supply) in the market is decreasing, and the buyer pressure (demand) has started increasing and vice versa. The pin bar, either bullish or bearish, signifies that the price does not want to go more down or up and want to reverse from that strong support or resistance level.

Understanding The Bullish & Bearish Pin Bars

Every time a pin bar candle occurring at a strong level does not always mean that the market is going to reverse from that level. To make this valuable, we must see that the overall picture and not just a single candle. In this trading strategy, we will see how we can analyze the overall market near that confluence level. Before that, let’s understand the two types of pin bar candlestick patterns.

Bullish Pin Bar Reversal Pattern

The bullish pin bar candle occurs when the price comes near a strong support level; this leads to the formation of a long wick of the pin bar and shows rejection from that level. This candle usually forms at the end of a downtrend and signifies that there can be either a short-term uptrend or a full reversal forming a strong uptrend.

Bearish Pin Bar Reversal Pattern

The bearish pin bar candle occurs when the price comes near a strong resistance level; this leads to the formation of a long wick of the pin bar and shows rejection from that level. This candle usually forms at the end of an uptrend and signifies that there can be either a short-term downtrend or a full reversal forming a strong downtrend.

Trading Strategies

Pairing The Pin Bar candles With Support & Resistance Levels

As already mentioned, just finding a pin bar candle at the support and resistance level is just not sufficient to trade. We have to figure out what the market is exactly trying to show us. When we see the candles approaching a strong support or resistance level, we have to analyze all the previous candles carefully. If the candles are very big and the momentum is very high, it is less likely to bounce back from that particular level. So, what we have to do is carefully track the candles with wicks. Candles with wicks show that the particular trend momentum is getting weak, and the pressure is reducing as the level is approaching.

After we see candles with wicks and some weaker candles, we will wait for our pin bar candle. As soon as we see the pin bar candle, we have to wait for the next candle to close above the pin bar’s high. We can then buy or sell in the market and place our stop loss 2-3 pips below the pin bar’s low.

In the below USDCAD 1Hr chart, we can see that the market touches the support level 3 times, the first time the candle was a long and strong bearish candle, and so we must take trades as the picture is still not clear. The second time when the market reaches the support, we see the candles have small bodies and more wicks. This tells us that the seller pressure is decreasing. Finally, for the third time, the market started getting rejections even before touching the support level, and we can also see so many long wicks in the candles. Finally, we see a pin bar candle touching the support level and getting the rejection, and then we see so good bullish momentum.

Below is the chart of USDCAD 1hr, market getting a rejection from the resistance level.

Pin Bar Pattern + Bollinger Bands

We are already familiar with one of the famous indicator called the Bollinger band that is used to measure the volatility of the market. We will now use a pin bar with the Bollinger band and understand how we can find some good trades opportunities.

The below chart is USDCAD 1Hr time frame over here. We can see that the market has not pierced the lower band since a long time as mostly the price is between the upper and the lower band. Moving forward, when the candles come close to the lower band, we see a pin bar occurring after the market gets rejection. After the formation of a pin bar candle, we can see the market getting the buying momentum, and it becomes bullish.

Trading With The Confluence Level

As from the above strategies, we are clear how the market behaves when a pin bar occurs at strong support and resistance level and the extreme level of Bollinger band. Now we will see what happens when a pin bar occurs at confluence level. A confluence level is an area that is on the radar of many traders, and many technical indicators generate the same signal. This trading concept is used by price action traders to filter their entry points and spot high probability signals in the market.

The below example is the pin bar forming at the extreme lower band and a strong support level. We can see that as the market reaches the support level, the bodies of the candles get weaker and smaller, forming longer wicks. Also, the pin bar pierces the lower band near that support level giving us a better signal for a buy.

Talking about the entry and exit points, our entry will be the point when the next candle crosses the high of the pin bar candle. As we see, it is a bullish pin bar; we can be sure that our entry is good if it crosses the high with good momentum. Our exit here will be the next strong resistance level. If you use a trailing stop loss, then we can move the stop loss to breakeven and be in the trade as long as you see the higher high higher low as, after a trend reversal, the candles move very fast and gives more profit and risk to reward ratio.

Conclusion

Trading with a pin bar candle has been proven to be one of the most effective trading strategies. As we saw, we must have a watch on all the candles when it approaches a confluence level because a single candlestick will not give us much information about what market is going to do next. The reliability of these candles is more with the higher time frame as it omits the noises on the chart, and we can have a clear picture. If you are a day trader, then you can 30min or 1hr time frame for executing the trade. Cheers!

Tags Bearish Pin Bar, Bollinger Band, Bullish Pin Bar, Confluence, Education, Forex, hammer, hanging man, Pin Bar, Resistance, Support, Technical Analysis, trading, trading strategy

Forex Basic Strategies

Profiting From The Rounding Top & Rounding Bottom Forex Pattern.

Post author By Reddy Shyam Shankar
Post date 14 May, 2020
No Comments on Profiting From The Rounding Top & Rounding Bottom Forex Pattern.

Introduction

The Rounding Top and Rounding Bottom are two of the most famous trend reversal patterns in the Forex trading industry. These patterns are mostly used to catch the end of a trend in both bullish and bearish markets. These patterns are extremely reliable as they are back-tested rigorously by a number of professional technical traders. Learning the trading of these patterns introduces us to a lot of trading opportunities while riding a brand new trend. Always remember that the Rounding top pattern appears at the top of an uptrend, and the Rounding Bottom pattern appears at the bottom of a downtrend.

Rounding Top

The Rounding Top pattern appears to be in the form of an inverted ‘U’ shape. Hence it is also referred to as an ‘Inverse Saucer.’ This pattern resembles the Double Top chart pattern but a bit more complex than that. Most of the time, the Rounding Top appears at the major resistance level on a price chart. This pattern has three major components – A rounding shape where the price action fails to print a higher high, a taper off, and the beginning of the lower trend.

Rounding Bottom

The Rounding Bottom is a bearish reversal chart pattern, and it appears at the end of a downtrend, indicating a long term reversal in the price action. This pattern resembles the Cup and Handle pattern, but it doesn’t go through the temporary downward trend of the handle portion. This pattern can be found at the major support area in any trading timeframe. Just like the Rounding Top, this pattern also has three major components – The Rounding Shape, where the price action fails to print a brand new lower low, taper off, and the beginning of an uptrend.

Trading The Rounding Top Pattern

The below CAD/CHF charts represents the formation of a Rounding Top pattern in this Forex pair.

We had decided to go short as soon as the pattern is confirmed when the price reached the neckline. The bear candles on the price chart were stronger than the bull candles indicating the gaining strength of sellers in the market. The sell trade is activated when the price goes below the neckline. Stop-loss is placed just above the region where the pattern is formed.

After activating the trade, price action didn’t blast to the south immediately. Instead, it pulled back to buy-side, before eventually going down. In this kind of situation, most of the traders doubt their strategy and exit their positions because of fear. But since our analysis is strong enough, it is a good idea to hold our positions and wait for the price to move in our direction.

Trading The Rounding Bottom Pattern

The below EUR/USD, 240 Minutes chart, represents the formation of the Rounding Bottom pattern on the price chart. We can see the market being in a downtrend when the Rounding Bottom pattern is formed. This is a clear indication for us to understand that the bears are losing momentum, and bulls are about to take over the market. We took a buy-entry when the price went above the neckline. The take-profit was placed at the higher timeframe’s significant resistance area.

Rounding Top Pattern + RSI Indicator

In this strategy, we have paired the Rounding Top pattern with the RSI indicator to identify accurate trading signals. As we all know, the RSI is a momentum indicator that measures the magnitude of the price change. RSI stands for Relative Strength Index, and it is developed, J. Welles Welder.

This indicator oscillates between the 0 and 100 levels. When RSI reaches the 70 level, it indicates overbought market conditions, and we must expect a downside reversal. Likewise, when it reaches the 30 level, it indicates the oversold conditions, and we must expect a buy-side reversal.

The strategy is simple – Identify the Rounding Top pattern and see if the price action is going below the neckline. If yes, check where the RSI indicator is. If it is in the overbought area, it is a clear indication for us to go short.

The below price chart represents the formation of the Rounding Top pattern on the EUR/CHF Forex pair.

In the below chart, we can see the price going below the neckline. At the same time, RSI gave a reversal at the overbought area, indicating us to go short in this pair. We have activated the trade at the neckline, and the stop-loss placement was above the most recent higher low. We had closed our positions when the price action started to struggle at the Bottom.

Rounding Bottom Pattern + RSI Indicator

The below chart represents the formation of the Rounding Bottom pattern on the NZD/CAD Forex pair.

We had gone long when the price broke the neckline, and the RSI gave a reversal at the oversold area. As you can see in the chart below, right after our buy activation, the price smoothly blasted to the north. We booked our whole profits when the price reached a significant resistance area. Stop-loss was just below our entry as the neckline acts as a strong support to the price action.

Conclusion

The Rounding Top and Bottom are bullish and bearish reversal patterns that are used to identify the end of an ongoing trend. You need to know that you must wait for the breakout of the neckline to take long or short positions according to the pattern formed. The stop-loss can be placed above the neckline when trading the Rounding Top and below the neckline when trading the Rounding Bottom pattern.

The take-profit must be equal to the size of the pattern formed, and if the trend is strong enough, consider going for deeper targets. Overall, these patterns are quite popular and easy to spot on the price chart. Practice trading these patterns using a trading simulator or a demo account before applying these strategies on live accounts.

We hope you find these strategies informative. If you have any questions, make sure to let us know in the comments below. Cheers.

Tags Basic Strategies, Bearish, Bullish, Education, Forex Trading, Neckline, Pattern Trading, Rounding Bottom, Rounding Top, Technical Analysis, Trading Strategies, Trading Timeframe

Crypto Market Analysis

Daily Crypto Review, May 14 – Bitcoin near $9,500; German Bank Offers Interest-Yielding BTC Accounts

Post author By Ilija Rankovic
Post date 14 May, 2020
No Comments on Daily Crypto Review, May 14 – Bitcoin near $9,500; German Bank Offers Interest-Yielding BTC Accounts

The cryptocurrency market has spent the past day reaching new fights, with almost every single cryptocurrency in the top100 ending up in the green. Bitcoin is currently trading for $9,467, which represents an increase of 6.24% on the day. Meanwhile, Ethereum gained 4.54% on the day, while XRP went up by 2.04%.

Crypterium took the position of today’s most prominent daily gainer, with gains of 27.28%. ABBC Coin lost 8.32% 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 67.76%. This value represents a 0.3% difference to the upside.

The cryptocurrency market capitalization increased by a good portion when compared to yesterday’s value, with its current value being $256.68 billion. This value represents an increase of $12.78 billion when compared to yesterday’s value.

What happened in the past 24 hours

German Neobank offers Bitcoin Accounts with Interest

German neobank Bitwala started offering its users interest rates of up to 4.3% when using its new Bitcoin Interest Account. The product is currently available to Bitwala’s 80,000 users. They can purchase, hold, and earn interest on Bitcoin in their bank accounts.

The Bitcoin Interest Account reached the market due to a new partnership between Bitwala and a crypto-lending platform Celsius Network.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has broken the range it was bound withing after some time struggling to do so, passing over $9,000 and reaching almost $9,500. Bitcoin was trading at the top line of its ascending trend for some time, constantly testing the resistance level. Today has been the day where the price broke out, went above $8,980, retested it, and then skyrocketed. That trading opportunity was exactly as described in our previous articles.

Bitcoin is currently near the oversold territory on the 4-hour chart.

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, led by Bitcoin’s price surge, has broken out above the descending channel it was in for some time now. While the move was not nearly as strong as Bitcoin’s, it was just enough to push through the channel and stay above $198.

The $198 support level is being tested at the time of writing, and price dropping below it with increased volume might be a good trading opportunity.

Key levels to the upside Key levels to the downside

1: $198 1: $193.6

2: $217.6 2: $185

3: $225.4 3: $178.65

Ripple

XRP has followed the market in terms of direction, but not in terms of intensity. The third-largest cryptocurrency by market cap followed Bitcoin on its way up and increased in price as well. While it did manage to conquer $0.2, the move can (in no way, shape, or form) be called strong.

XRP is now trading within a very narrow channel, bound by $0.205 to the upside and $0.2 (which it is constantly testing) to the downside.

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: $0.178

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

Forex Market Analysis

WTI Crude Oil Slipped to $25.75 – Sideways Channel Intact!

Post author By Ali B.
Post date 13 May, 2020
No Comments on WTI Crude Oil Slipped to $25.75 – Sideways Channel Intact!

The WTI crude oil prices dropped to $25.90, mainly due to the price-positive API data, which revealed a rise in U.S. crude inventories. The tensions about a potential second wave of coronavirus cases after countries starting to ease lockdowns also keep the oil prices under pressure.

Moreover, China’s war with the U.S. and Australia also weighed down on the oil market. At this moment, the WTI crude oil is currently trading at 25.36 and consolidates in the range between the 25.07 – 25.79. The weekly announcement of a private stockpile report from the American Petroleum Institute (API) indicates a build of 7.64 million barrels versus the prior extension of 8.44 million barrels into the stockpiles.

The idea for recent support in the oil prices could be connected to the further request by Saudi Arabia for more extensive output cuts to balance the market induced by virus-induced demand disruption. The recent reopening of major economies’ confidence also supporting the oil prices.

On the other hand, the United States started once again to announce the new claims of coronavirus following easing coronavirus restraints and revived nonessential businesses in U.S. states as per the previous FDA Commissioner Dr. Scott Gottlieb. Whereas, China and South Korea are also fighting to control second wave outbreaks that spread during the weekend, While, Korea showed 26 new cases on May 12. As in result, the oil demand could face further crisis ahead.

Recently, the Energy Information Administration announced Wednesday that U.S. crude stockpile report which slipped by 700K barrels for the week ended May 8.

Daily Support and Resistance

S1 22.23
S2 23.74
S3 24.66

Pivot Point 25.25

R1 26.16
R2 26.75
R3 28.26

The U.S. oil is consolidating at 26.04 within a symmetric triangle pattern, which is rendering tripe top resistance at 26.70 along with support at 25.10 and 24.10. While bullish crossover of 26.70 may lead to WTI prices towards 27.30. Good luck!

Tags Forex, Technical Analysis, Trade Setup, trading, usoil, WTI

Forex Signals

Gold bounces off the Linear Regression line and heads up to meet the top of the channel

Post author By Fran S.
Post date 13 May, 2020
No Comments on Gold bounces off the Linear Regression line and heads up to meet the top of the channel

The idea

Gold has been having a corrective movement lately. The price has created a slightly descending channel. If we draw a linear regression channel we can easily see the consensus of price, represented by the mean line, which is the average line of the price set for the range, and the edges of the channels are set at ±2 Sigmas (standard deviation) of the centerline.

On the 2H chart we see that, after the price did a higher low below the centerline, it went up, and consolidated for a while above that line. Today it made an engulfing figure that broke through the recent range and is heading up.

A long position was entered at 1,711.12 with a stop-loss at $1,699.12 and a take profit of 1,725.12, which gives a reward to risk ratio of 1.17, which is less than the usual, but also the target can be reached easier, as it is not set at the top of the channel but at the recent high of the price, made on May 08.

Main levels:

Long entry: 1,711.12
Stop-Loss: 1,699.12
Take-profit: 1,725.12

Reward/Risk Ratio: 1.17

Dollar Reward and Risk

Risk:$1200 per lot, $120 per mini lot, 12 per micro lot
Reward: 1400 per lot, $140 per mini lot, $12 per micro lot.

Tags Forex, Gold, Technical Analysis, Trade Idea, Trade Setup, trading, XAU

Crypto Videos

Applying The Stock To Flow Model To The Bitcoin Halving

Post author By Keiran
Post date 13 May, 2020
No Comments on Applying The Stock To Flow Model To The Bitcoin Halving

https://youtu.be/xF3BnoFywBc

Stock to Flow model and Bitcoin Halving

What is the Stock to Flow model?

The Stock to Flow model is a way to measure the abundance of a certain resource. The Stock to Flow ratio would then be the amount of a resource that is held in reserves divided by the amount of the resource produced annually.
While the Stock to Flow model is generally applied to natural resources, it has seen some use when predicting the cryptocurrency prices as of lately.

What does Stock to Flow show?

The S2F essentially shows a product’s supply increase each year for a given resource relative to its total supply. The higher the Stock to Flow ratio is, the less new supply enters the resource market relative to the total supply. Assets with a higher Stock to Flow ratio should, theoretically, retain its value over the long-term better than those with a lower Stock to Flow ratio.

Stock to Flow and Bitcoin

When Bitcoin’s mining and production is taken into account, it’s not difficult to see why Stock to Flow ratio would be used on calculating and predicting Bitcoin’s price. The model treats Bitcoin comparably to commodities such as gold or silver. In theory, such commodities should retain their value much better than other assets over the long term due to their low flow and relative scarcity.

As of recently, Bitcoin is considered a very similar resource, as it is scarce, costly to produce and has a maximum supply. On top of that, its issuance is defined which makes the flow almost completely predictable, which can be extremely useful when calculating long-term price movements.

According to the “followers” of this model, the properties that Bitcoin has create a scarce resource that is expected to retain and increase its value in the long-term. The chart shows that the Stock to Flow ratio has been extremely accurate in the long-term as the price acted almost the same way after every Bitcoin halving (which reduced its daily supply by half).

Conclusion

The Stock to Flow model is a visual representation of the relationship between the available Bitcoin and its production rate. While it has so far been successful in predicting Bitcoin’s price movements, it may not be able to take into account all aspects of the Bitcoin valuation. Even so, Bitcoin’s Stock to Flow ratio is something that should be tracked and taken into account when looking for long-term trends and how Bitcoin might act in the future.

Tags Crypto, crypto analysis, Crypto Trading, Stock flow model, Technical Analysis, trading

Forex Market Analysis

Daily F.X. Analysis, May 13 – Top Trade Setups In Forex – U.S. Inflation Ready to Play!

Post author By Ali B.
Post date 13 May, 2020
No Comments on Daily F.X. Analysis, May 13 – Top Trade Setups In Forex – U.S. Inflation Ready to Play!

The latest economic figures from the United States raised expectations that the Federal Reserve will launch more monetary stimuli in the next meeting, and markets started to price in for a negative interest rate scenario. Donald Trump, while examining the state of Beijing amid coronavirus lockdown, warned about the US imposing new tariffs if China failed to purchase $200B worth U.S. farm goods. After that, trade delegates from both sides held a meeting via phone call and released a positive statement hence created optimism about the US-China relationship.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD currency pair remained directionless around the 1.0850 as investors found on the waiting track and cautious about placing any strong position ahead of the Federal Reserve Chairman Jerome Powell’s speech on economic issues. The broad-based U.S. dollar flashing green and likely turned out to be one of the key factors that kept a lid on any gains in the pair, at least for now. As of writing, the EUR/USD currency pair is currently trading at 1.0850 and consolidates in the range between the 1.0843 – 1.0858.

As we all well aware that the investors expected the interest rate would be negative in June 2021. Whereas, the rate options market was putting in a 23% chance of the key federal funds rate falling below zero by end-December, As well as, the U.S. President Donald Trump also urged by the tweet that the negatives rate cuts would be considered good for the U.S.

On Wednesday, the European Commission will also recommend a phased approach to reopen borders with countries that have similar coronavirus risk profiles for tourists. Travel between similar risk profile countries will be recommended in the COVID-19 recovery plan.

The E.U. Foreign policy chief, Josep Borrell, said on Tuesday that coronavirus pandemic will likely deteriorate the security environment in years ahead and that countries should not slash their defensive spending in their budgets. He stressed the importance of security and defense funding in the challenging environment of a pandemic.

Meanwhile, due to the easing of lockdowns from countries across the globe, the new coronavirus cases were started being reported from many countries, including China, South Korea, and Germany. This weighed on markets as chances for second-wave of coronavirus could hurt the hopes of quick economic recovery. There was no economic data to be released from the European side, so the movement of pair EUR/USD followed the directions from U.S. dollar and market news.

Daily Support and Resistance

R3 1.0995
R2 1.094
R1 1.0894

Pivot Point 1.0839

S1 1.0793
S2 1.0738
S3 1.0691

EUR/USD– Trading Tips

The EUR/USD price dropped after testing the double top resistance level of 1.08770. The market is a bit slow today, which is why, the EUR/USD prices are consolidating above 1.0826, which is working as support that’s been extended by the 50 EMA. The bearish breakout of 1.0826 level can extend the selling trend until the next support level of 1.0777, while bullish breakout of 1.0850 can lead EUR/USD prices towards 61.8% Fibonacci retracement level of 1.0869 level. Consider taking selling trades below 1.0839 and buying above the same today.

GBP/USD – Daily Analysis

The GBP/USD currency pair stops its 2-day losing streak and hovering near the late-April low 1.2250 as traders are cautious to place any strong position ahead of critical U.K. macro releases. As we mentioned, the market participants are waiting for the key data while staying near April low, a continued break of a bullish sloping trend line from April 06 keeps sellers hopeful of targeting April month low near 1.2165 beneath 1.2250. At the press time, the GBP/USD currency pair is currently trading at 1.2271 and consolidates in the range between the 1.2251 – 1.2284.

At the data front, the U.K.’s heavy economic calendar is going to control the markets moves at 06:00 GMT with the first quarter (Q1) GDP figures for 2020. As well as, the March month Trade Balance and Industrial Production detail will also decorate the economic calendar.

According to the forecasted view about GDP, the United Kingdom GDP is expected to reach -8.0% MoM in March against -0.1% prior while the Index of Services (3M/3M) in the same timeframe is seen higher from 0.2% to 0.30%.

Broadbent said that risks were still to the downside and committee would do whatever will be necessary to recover.

Meanwhile, the Brexit talks were on board, and a little progress was made in the future fisheries agreement between E.U. & U.K. According to the MEP for CDU, it was only because of France and Netherland that U.K. was set to come to an agreement with E.U. on fisheries. U.K. did not want fisheries to be a part of economic agreement but number of member states including France & Netherland made very clear that they will not agree on any future economic partnership without long-term solution on fisheries.

Pound dropped on slow progress of post-Brexit deal with the E.U. and increased fears of second wave of coronavirus. However, The GDP data from U.K. will remain under high focus for GBP Traders on Wednesday.

Daily Support and Resistance

R3 1.2577
R2 1.2508
R1 1.2422

Pivot Point 1.2353

S1 1.2268
S2 1.2198
S3 1.2113

GBP/USD– Trading Tip

The GBP/USD sideways trading continues in between a narrow trading range of 1.2320 – 1.2245. The Cable is still holding below 50 EMA, which is extending resistance around 1.2370 level today. On the 4 hour chart, the GBP/USD is gaining support at 1.2285 level while the 50 EMA and horizontal resistance stay at 1.2365 level. Today, the Fed chair Powel speech may drive the selling trend in the GBP/USD pair to lead its prices towards an immediate support level of 1.2240 and 1.2190. Conversely, the worse than expected retail sales data will lead the GBP/USD pair towards 1.2360 and 1.2450.

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.147 after placing a high of 107.691 and a low of 107.120. Overall the movement of USD/JPY pair remained bearish throughout the day. The pair USD/JPY lost its previous day gains but managed to remain above the 107 territory on Tuesday. On the back of broad-based U.S. dollar weakness, the pair USD/JPY dropped about 0.5% on that day.

U.S. dollar was weak due to the poor than expected CPI data in the month of April. The U.S. Consumer Price Index fell and posted its biggest monthly decline since the 2008-2009 recession. The CPI dropped by -0.8% against the expected decline by -0.7% and weighed on U.S. dollar. The Core CPI dropped by -0.4% against the forecasted -0.2%.

Moreover, the tensions between China and the U.S. have increased the fears of renewed trade-war. There were reports suggesting that Chinese Officials revive the possibility of revoking the signed trade deal and negotiate a new deal which will tilt more to the Chinese side.

U.S. President, Donald Trump was asked about this possibility and in response to whether he would renegotiate a deal with China, he said, “No, not at all. Not even a little bit.” He was not interested in renegotiate the deal. He said that he also had heard about it that China wanted to reopen the trade talks to make it better deal for them but a deal has already been signed and he would not cancel it.

Apart from China-US trade war, another trade-war fears are emerging in the market between Australia and China. The announced duties on Aussie meat by China is being considered as a safe play against the action of Australian PM to favor the inquiry of China’s role in the origin of the virus.

All these renewed trade-war fears along with coronavirus pandemic have increased the risk in the market. The virus cases in Germany increased, and the Wuhan city in China reported fresh rise in number of coronavirus cases after easing of lockdown.

Furthermore, an ex-member of White House Coronavirus Task Force Team, Doctor Anthony Fauci warned that gradual restart of economy was dangerous because it could cause needless suffering and would slow down the economic recovery.

Additionally, the officials from Bank of Japan also cited negative impact of virus on Asian economy and stated the importance of acting quickly by central banks when needed. At 10:00 GMT, the Leading Indicators of economy from Bank of Japan came less than the expected 84.3% as 83.8% and weighed on JPY.

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

The USD/JPY pair is gaining support at 107 level which marks the 50% Fibonacci retracement level. At the same level, the 50 EMA is supporting the pair and it could drive a bounce off above 107 level. At the moment, the 4-hour candle seems to close above 107 support, but it’s not sufficient to go long on USD/JPY. We need to wait for couple of more candles to give us closing above this level.

The MACDis holding in selling , which is supporting the bearish trend in the USD/JPY pair. The violation of an immediate support level may extend selling until 106.600 level. Conversely, 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!

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

Forex Course

117. How to Trade the ‘Head and Shoulders’ Forex Chart Pattern?

Post author By Reddy Shyam Shankar
Post date 13 May, 2020
No Comments on 117. How to Trade the ‘Head and Shoulders’ Forex Chart Pattern?

Introduction

The Head and Shoulders formation is a popular Forex chart pattern, which is pretty easy to recognize on the price charts. There are both bullish and bearish Head and Shoulders patterns, and both indicate potential market reversals. This pattern consists of three peaks, which is developed after a strong bullish trend. The first and third peaks are of the same height, and they are classified as shoulders. The second peak of the pattern is the highest and hence classified as the head.

There are both bullish and bearish Head and Shoulder patterns. The appearance of bullish Head and Shoulder pattern on the price chart indicates that the momentum is transferring from the sellers to buyers. Likewise, the appearance of the Bearish Head and Shoulder pattern indicates the momentum is transferring from the buyers to sellers. While trading the Bearish Head and Shoulders pattern, it is advisable to go short when the price breaks below the neckline. Contrarily, go long when the price goes above the neckline while trading the Bullish pattern.

How To Trade The Head And Shoulders Pattern?

It is advisable not to wait for the perfect pattern instead look for the good entry/exits when you spot the pattern on the price chart. Sometimes the left shoulder will be bigger than the right shoulder and vice-versa. Please do not focus on minute details. Instead, our focus must be on deciding if the pattern looks reliable enough to trade or not. If the answer is yes, only then take entries.

Trading The Bearish Head And Shoulders Pattern

The below chart represents the formation of the Head and Shoulder pattern on the NZD/JPY forex pair.

As you can see, in the below NZD/JPY chart, the formation of the pattern doesn’t look perfect, but the overall pattern looks reliable to trade. We went short as soon as the price action broke below the neckline. The stop-loss order was placed above the second shoulder. For TP, we went double the size of the pattern. We had exited the market when the price got consolidated, as it implies the opposite party is gaining strength.

Trading The Bullish Head And Shoulders Pattern

In the below chart, we have identified the Bullish Head and Shoulder pattern in the EUR/CHF Forex pair.

In a choppy downtrend, a bullish Head and Shoulder pattern is formed. When the price goes above the neckline, it is an indication for us to go long. The take-profit is again placed two times the size of the pattern, and the stop-loss is just below the second shoulder.

In the above chart, we can clearly see that the Bullish Head and Shoulder pattern is not perfect, like the ones we see in textbooks. But still, our trade worked beautifully. So it is crucial to bends our rules here and there; we will hardly find such kind of perfect patterns. If we just wait for them, we will hardly get to trade. Also, once you gain some experience in trading this pattern, you will automatically be able to decide which pattern works and which will not. Mastering any pattern requires tons of practice and patience.

That’s about identifying and trading the Head and Shoulders pattern. Advanced strategies related to this pattern can be found in our trading strategies section. Please feel free to explore. Cheers!

[wp_quiz id=”73064″]

Tags Education, Forex, Forex patterns, Forex Trading, Head and Shoulders, Head and Shoulders pattern, Reversal Patterns, Technical Analysis, Technical Trading, trading

Forex Price-Action Strategies

Price Action Trading: Dealing with Daily Chart’s Support/Resistance

Post author By Tareq Sikder
Post date 13 May, 2020
No Comments on Price Action Trading: Dealing with Daily Chart’s Support/Resistance

In today’s price action lesson, we are going to demonstrate an example of a daily chart where the price reacts to support and resistance. We will dig into the chart and find out what message it has to offer us.

The chart shows that the price heads towards the North upon producing a bullish track rail pattern. The next candle comes out as another bullish candle. However, the price finds its resistance. The level has been working as a level of resistance where the price has rejection twice already. Look at the last candle on the chart. It comes out as a bearish inside bar. However, the level is now triple top resistance. Intraday sellers may look to go short in the pair and drive the price towards the South.

As expected, the pair produces another bearish candle. The last swing low offers enough space for the sellers to go short in the pair. Thus, they may still go short in the pair and drive the price towards the South further. The daily sellers are to wait for the price to consolidate and produce a bearish reversal candle to offer them a short entry. Let us see what happens next.

The chart produces a bullish inside bar. The sellers on the daily chart may go short if the next daily candle comes out as a bearish reversal candle. They are to keep this chart on their watch list.

The next candle comes out as a bearish engulfing candle. This means the sellers on the daily chart may go short in the pair and drive the price towards the last swing low as far as price action trading is concerned. If the next daily candle breaches the level of support (last swing low), they may keep holding the position to grab more pips. Let us find out what happens next.

The next candle comes out as a bearish candle closing within the last swing low though. The sellers make some green pips. It might be time for them to close the trade since the candle closes within the level of support. If the candle closes below the level of support, it would surely be a different ball game for the sellers.

Intraday traders obey Support/Resistance on the daily chart a lot. Thus, daily support/resistance plays a significant role in the Forex market to make a reversal/correction/consolidation. Thus, if we take entry even based on the daily chart, we must count those to manage our entries.

Tags Bearish, bearish inside bar, Bullish, bullish track rail, Forex, Price Action, Resistance, Support and Resistance, Technical Analysis, trading

Crypto Market Analysis

Daily Crypto Review, May 13 – Bitcoin Pushing Towards 9,000; WBTC Larger than BTC’s Lightning Network

Post author By Ilija Rankovic
Post date 13 May, 2020
No Comments on Daily Crypto Review, May 13 – Bitcoin Pushing Towards 9,000; WBTC Larger than BTC’s Lightning Network

The cryptocurrency market has spent the past day mostly trading sideways, with some cryptocurrencies testing their support and resistance levels. Bitcoin is currently trading for $8,885, which represents an increase of 1.63% on the day. Meanwhile, Ethereum gained 0.87% on the day, while XRP went up by 0.5%.

DigiByte took the position of today’s most prominent daily gainer, with gains of 27.28%. Status lost 8.32% 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 0.29% difference to the upside.

The cryptocurrency market capitalization increased by a good portion when compared to yesterday’s value, with its current value being $243.85 billion. This value represents an increase of $5.1 billion when compared to yesterday’s value.

What happened in the past 24 hours

Lightning Network vs. WBTC on the Ethereum network

One thousand Wrapped Bitcoin were minted today on the Ethereum network. This transaction represents more US dollar value than the entire current Lightning Network. This transaction brings the total amount of Bitcoin locked in WBTC tokens to 2,300, which is quite a bit more than the 927 Bitcoin locked on the Lightning Network.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has seen an increase in bullish presence since yesterday. Bitcoin is trying to push through the ascending trend it was locked in for two days now. If the price breaks the trend and then succeeds in testing it positively, we can expect Bitcoin’s price to rise alongside with its volume.

While the best-case scenario would be an easy position to trade, the current state of Bitcoin does not show any strong possible positions to be opened at the moment.

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 been moving sideways for a couple of days now. It has been stable above the $185 support level but locked inside the descending trend. If nothing changes and Ethereum continues its sideways price action, it will eventually (forcefully) bump into the descending channel top line.

Ethereum’s volume is very low at the moment, while its RSI level is hovering above the value of 40.

Key levels to the upside Key levels to the downside

1: $193.6 1: $185

2: $198 2: $178.65

3: $217.6 3: $167.8

Ripple

XRP has, just like Etheruem, been moving sideways for some time now. It is now, however, bound within any ascending or descending channels. Its sideways movement is accompanied by low volume and a stable RSI value. XRP’s next move will likely be caused by Bitcoin’s sharp price movement, as Bitcoin (at the moment) seems like it is much closer to making a move than XRP is.

Key levels to the upside Key levels to the downside

1: $0.2 1: $0.19

2: $0.205 2: $0.178

3: $0.214 3: $0.147

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

Forex Fibonacci

Fibonacci Trading: Be sure whether the Level is Held or Breached

Post author By Tareq Sikder
Post date 12 May, 2020
No Comments on Fibonacci Trading: Be sure whether the Level is Held or Breached

Breakout plays a very vital role in the Forex market. Traders use breakout, breakout levels to make a trading decision. Fibonacci traders are to make sure whether a particular level is breached or it holds the price to make a better trading decision. In today’s lesson, we are going to demonstrate an example where Fibonacci traders may need to concentrate more to be sure about the Fibonacci level from where the price trends. Let us get started.

This is an H1 chart. The chart shows that the price makes a strong bearish move. It makes an upside correction followed by a strong bearish move again. The price has been having an upside correction again. Fibonacci traders are to draw the Fibonacci levels in the chart to find out where the price makes a bearish reversal and how far it may go up to.

Here are the levels. The chart shows that the price produces a bearish engulfing candle and heads towards the South with good bearish momentum. The question is whether the price trends from 78.6% or 61.8%. It is a vital issue since the price heads towards either 138.2% or 161.8% based on these two levels. If we concentrate on the chart, we see one of the bullish candles closes above the 78.6% level. However, the price comes back within the 78.6% level with the next candle. This means the H1 chart does not make a bullish breakout at 78.6%. The sellers may plan their entries to go short up to 138.2% in this chart. Let us proceed to the next chart to find out what price does.

The price breaches the 100.0 level and trades below for several candles. The sellers may wait for a bearish reversal candle and go short in the pair as long as they are satisfied with the risk-reward factor. Usually, it is best if the price goes back to the 100.0 level and produces a bearish reversal candle around the level as far as the risk-reward ratio is concerned. However, it may be produced anywhere between 100.0% to 123.6%. The sellers with different strategies may set their stop loss at different levels, but their last take profit level is to be set at 138.2 %. Let us proceed to the next chart to find out what the price does next.

The chart shows that the price hits 138.2%. As expected, it has been roaming around the level. It seems that the price may have found its support around 138.2% level, and it may make a bullish reversal. The sellers with Fibonacci levels have completed their mission with perfection.

Tags Bearish, Breakout, consolidation, Fibonacci, Forex, Forex Fibonacci, Resistance, Support, Technical Analysis, trading

Forex Course

119. Learning To Trade The Wedge Chart Pattern

Post author By Reddy Shyam Shankar
Post date 12 May, 2020
No Comments on 119. Learning To Trade The Wedge Chart Pattern

Introduction

The Wedge is a technical chart pattern that is commonly used by the traders, market technicians and chartists to find the upcoming market trend. This pattern is always formed at the bottom/top of the trend, indicating a potential change in the market’s direction. In short, the Wedge is a trend reversal pattern. One key benefit of the Wedge pattern is they it is comparatively easy to identify on the price charts. This pattern is traded by most of the technical traders as it provides precise entries and exits.

There are two types of Wedge patterns – The Rising Wedge & the Falling Wedge.

The Rising Wedge

The Rising Wedge is a bearish reversal pattern, and it appears in an uptrend. This pattern seems to look wide at the bottom and contracts as the price move higher. To form a Rising Wedge pattern, two higher highs must touch the upper line; likewise, two reaction lows to the lower line. The point at which the upper and lower lines merge indicates the completion of the pattern.

The Falling Wedge

This pattern is just opposite to the Rising Wedge pattern. It appears in an ongoing downtrend, and it is a bullish reversal pattern. The appearance of these patterns is an indication for us to go long. This pattern begins wide at the top and contracts as the price moves lower. To form this pattern, the two lower lows must react with the support line, and the two higher lows must react with the resistance line. When both the lines converge, we can say that the pattern is complete.

Trading The Wedge Chart Pattern

The Rising Wedge

The below chart represents the formation of a Rising Wedge chart pattern on the GBP/CAD Forex pair.

There are two ways to trade the Rising Wedge pattern. We can go short when the price hits the upper resistance line, and if the price breaks the below line, holding our positions for longer targets is a wise thing to do. The second and the conventional way is to wait for the price action to break below the support line and take the sell position only after the confirmation.

In the example below, we took sell entry when the price action broke the support line. Place the stop-loss just above the recent high and ride the markets for deeper targets. We had booked our profits when the price action started to struggle as it is an indication of a market reversal soon.

The Falling Wedge Pattern

The image chart represents the formation of the Falling Wedge pattern in the GBP/NZD Forex pair. We can see that both the parties were fighting in a downtrend and when the market prints a Falling Wedge pattern, it is an indication for us to go long.

At the beginning of March, the price broke above the Falling Wedge pattern, and we end up entering for a buy. The stop-loss was placed just below the support line, and the take profit was at the major resistance area.

That’s about Raising & Falling Wedge pattern and how to trade them. If you have any questions, please let us know in the comments below. Also, to learn advanced trading strategies related to this pattern, you can follow this link. Cheers.

[wp_quiz id=”74092″]

Tags Chart patterns, Forex Charts, Forex Trading, Pattern Based Trading, Technical Analysis, Technical Trading, trend lines, Wedge Pattern

Forex Course

118. Using Rectangle Chart Patterns to Trade Breakouts

Post author By Reddy Shyam Shankar
Post date 12 May, 2020
No Comments on 118. Using Rectangle Chart Patterns to Trade Breakouts

Introduction

The Rectangle is a technical chart pattern that is described by two horizontal lines acting like potential support and resistance levels on the price chart. Trading this pattern is similar to buying at the support and selling at the resistance level. Conventional traders can trade this pattern only after the appearance of the breakout.

The Rectangle represents a trading range, which indicates the fight between the two parties – buyers & sellers. As the price reaches the support level, buyers step in and push the price higher. And when the price reaches the resistance level, bears take over and force the price lower.

In this fight, one party will eventually get exhausted, and the winner will emerge when the price breaks out in any direction. So we can say that the Rectangle is a neutral pattern as either trend continuation or reversals may happen after the formation of this pattern.

Rectangle Chart Pattern – Trading Strategies

Buy Example

The below chart represents the formation of a Rectangle pattern in the GBP/CAD pair.

As we can see in the below chart, the market just started its uptrend, and during the pullback, it turned into the consolidation phase forming a range. This consolidation phase eventually forms the Rectangle pattern.

This pattern is very easy to spot and trade. We can wait for the pattern to break the range to enter the market. If you are an active trader, you can even take a couple of buy/sell trades in a lower timeframe. In the example shown below, we have decided to go long as soon as the price action broke the pattern from the upside. The stop-loss order is placed just below the Rectangle, and the take-profit is at the recent high.

Sell Example

The image below represents the formation of a Rectangle pattern in a downtrend.

The below chart represents the entry, exit, and the placement of stop-loss & take-profit orders in the GBP/NZD Forex pair. In an ongoing downtrend, when the prices reached the significant support zone, it started to hold. The sideways movement of the price shows that both the parties are super strong, and the breakout to any side will be a good trade.

After the battle, prices broke towards the downside, which is a clear indication for us to go short. The stop-loss order is placed just above the pattern. Because, in a downtrend, if the price breaks the Rectangle pattern’s resistance, it must be considered invalid. Hence there is no need to go for deeper stop-loss. We would always recommend placing the stops just above or at least at the same height as the pattern.

For booking profits, we didn’t choose any specific location. Instead, we were watching the price action keenly and chose to close our full positions when the sellers started to die. We can close our positions in different ways, depending on the market situation. For instance, we can exit the trade when prices approach the significant support area. We can even take the help of technical indicators to close our positions. Technical traders are also using price action techniques these days to exit their running positions.

That’s about the Rectangle chart pattern and how to trade it. If you have any queries, let us know in the comments below. Cheers.

[wp_quiz id=”73928″]

Tags Bearish Rectangle, Bullish Rectangle, Education, Forex, Forex Chart Patterns, Forex Course, Forex Trading, pullback, Rectangle Chart Pattern, Technical Analysis, Technical Trading, trading

Forex Course

116. Trading The Ascending & Descending Triangle Chart Patterns

Post author By Reddy Shyam Shankar
Post date 12 May, 2020
2 Comments on 116. Trading The Ascending & Descending Triangle Chart Patterns

Introduction

The Triangle Chart pattern is one of the most frequently found Forex patterns on the price charts. Technical traders prefer trading this pattern as it provides greater insight into the future price movement and the upcoming resumption of the current trend. This is a consolidation pattern that occurs in the midway of the trend, and it signals the continuation of the existing trend.

The Triangle pattern is formed between the two converging trend lines as the price temporarily moves into a small range. We must wait for the breakout to happen in an existing trend to take a trade. There are three types of Triangle chart patterns, and they are the Ascending Triangle, Descending Triangle, and The Symmetrical Triangle.

Ascending Triangle

It typically appears in a bullish trend. When the price action breaks the upper horizontal trend line with increased volume, it indicates a buy signal.

Descending Triangle

It is a bearish continuation pattern, and it appears in a downtrend. When the price action breaks the lower horizontal trend line with increased volume, it implies that the original sellers are back in the show, and it is an indication for us to go short.

Symmetrical Triangle

It is composed of diagonally falling upper trend line and diagonally rising lower trend line. When the price action reaches the apex, the price can break out from any side. We must be taking our positions depending on the price momentum and strength.

How To Trade The Triangle Chart Pattern?

Trading The Bullish or Ascending Triangle Pattern

The below chart represents the formation of an Ascending Triangle chart pattern in the AUD/NZD forex pair.

In the below Ascending Triangle pattern, we can see that both buyers and sellers are super strong. When the buyers break above the resistance line, it indicates that the game is finally in the hand of buyers. Hence, this is the perfect time to go long. The stop-loss was placed just below the pattern, and we book the profit when price action reached the previous significant high.

Trading The Bearish or Descending Triangle Pattern

The below chart represents the formation of a Descending Triangle chart pattern in the GBP/NZD Forex pair.

As we can see in the below chart, the pair was in an overall downtrend. When the price action reached a significant support area, the market started to move in a range. This range eventually has turned into a Descending Triangle chart pattern. As discussed, this pattern indicates that buyers and sellers are aggressive in taking the lead.

But the breakdown towards the sell side shows that the sellers have finally won the battle. We have placed the sell order right after the breakout, and stop-loss was placed just above the recent higher low. You can observe from the below chart that after going short, the price action started to move smoothly in our direction. We have closed our entire position when the price is started to struggle going down.

That’s about Ascending and Descending Triangle chart patterns. There are many strategies we can use to maximize profits while trading this pattern, and they can be found in the Basic Strategies section. All the best.

[wp_quiz id=”72812″]

Tags Ascending Triangle, Descending Triangle, Education, Forex, Forex Course, Symmetrical Triangle, Technical Analysis, Technical Trading, trading, Triangle Chart Pattern

Crypto Market Analysis

Daily Crypto Review, May 12 – Bitcoin Halving Fundamentals and the Crypto Market Price Reaction

Post author By Ilija Rankovic
Post date 12 May, 2020
No Comments on Daily Crypto Review, May 12 – Bitcoin Halving Fundamentals and the Crypto Market Price Reaction

The cryptocurrency market has spent the past day preparing for the Bitcoin halving event. While there was some price uncertainty, it eventually turned out to be a pretty stable day. Bitcoin is currently trading for $8,680, which represents a decrease of 0.07% on the day. Meanwhile, Ethereum gained 0.07% on the day, while XRP went down by 0.61%.

ReddCoin took the position of today’s most prominent daily gainer, with gains of 31.95%. 0x lost 11.75% 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 67.17%. This value represents a 0.08% difference to the downside.

The cryptocurrency market capitalization stayed at the same place when compared to yesterday’s value, with its current value being $238.75 billion. This value represents a decrease of $0.99 billion when compared to yesterday’s value.

What happened in the past 24 hours

Bitcoin Halving

With Bitcoin finishing its halving event, investors are expecting to see a market response. However, the past 24 hours have been pretty uneventful when it comes to price movement. Analysts are mostly bullish in the long run but concerned in the short-term as Bitcoin is still in a downtrend that started near the end of 2017.

On the other hand, if we take a look at the fundamentals, Bitcoin has improved greatly since the last halving. The number of small Bitcoin addresses with less than 0.01 BTC after the third halving increased by 235% when compared to the second halving that occurred in July 2016.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has undergone its third halving event, cutting miner’s incentive in half. The price did not immediately react and the day went pretty uneventful price-wise. Bitcoin remains bound between the $8,650 support and $8,820 resistance levels as well as within a small ascending trend.

Traders may expect a breakout to either side to be a great opportunity. However, Bitcoin, in its current position, is almost impossible to trend due to how narrow the range is.

Key levels to the upside Key levels to the downside

1: $8,820 1: $8,650

2: $8,980 2: $8,000

3: $9,120 3: $7,750

Ethereum

Ethereum seemingly stopped its downtrend and started moving sideways. Its price is currently held up by the $185 support level, which is of great importance for quite some time now. However, we still have to consider Ethereum being short-term bearish as it is still stuck within a descending trend. Only after it goes above the descending channel, it may be considered neutral or bullish.

Key levels to the upside Key levels to the downside

1: $193.6 1: $185

2: $198 2: $178.65

3: $217.6 3: $167.8

Ripple

XRP followed the market and spent an uneventful day as well, as all the eyes were looking at Bitcoin. The third-largest cryptocurrency by market cap started moving sideways right above the $0.19 level. However, the fact that it started making lower lows with each move makes it a bit scary for the XRP bulls. With that being said, XRP is quite stable at this price, as $0.19 is considered a strong support level.

XRP’s volume is on the lower side of the spectrum, while its RSI is at the value of 36.

Key levels to the upside Key levels to the downside

1: $0.2 1: $0.19

2: $0.205 2: $0.178

3: $0.214 3: $0.147

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

Forex Market Analysis

Daily F.X. Analysis, May 12 – Top Trade Setups In Forex – U.S. Inflation Ready to Play!

Post author By Ali B.
Post date 12 May, 2020
No Comments on Daily F.X. Analysis, May 12 – Top Trade Setups In Forex – U.S. Inflation Ready to Play!

The latest economic data from the United States fueled expectations that the Federal Reserve will stimulate more in the next meeting, and markets started to price in for a negative interest rate environment. Donald Trump, while considering the state of Beijing amid coronavirus lockdown, threatened to impose new tariffs if China failed to buy $200 worth U.S. farm goods. After that, trade representatives from both sides held a meeting via phone call and announced a positive report hence created optimism about the US-China relationship.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.08066 after placing a high of 1.08504 and a low of 1.08004. Overall the movement of the EUR/USD pair remained bearish throughout the day.

EUR/USD pair dropped on Monday and posted a fresh daily low of 1.0801. The downward trend of the EUR/USD pair was due to the strength of the U.S. dollar. The U.S. Dollar Index was up by 0.45% and was back to above 100.00; it was pushed by higher U.S. yields on Monday.

On the data front, at 13:00 GMT, the Italian Industrial Production in the month of March showed a decline in production activity by 28.4% against the forecasted decline of 20.0%. It weighed on single currency euro and added in the downward track of EUR/USD pair.

Furthermore, the EUR was also affected by the news about filing a case against the German constitutional Court. On Sunday, the European Union Commission announced that it could open a legal case against the German Constitutional Court ruling of European Central Bank’s easing programs.

The president of the European Commission, Ursula von der Leyen, has said that the judges in the German Constitutional Court have overreached their authority by calling the part of ECB’s bond-buying program illegal, which was critical and necessary to stabilize the economy in coronavirus crisis.

However, the loss in EUR/USD prices gained after new six coronavirus cases started to reappear from Wuhan city after more than a month when lockdown restrictions were eased in the city, which is considered as the epicenter of coronavirus outbreak.

The E.U. and U.K. resumed talks on Monday with rising pressure on both sides to make some progress as the deadline to reach a deal is coming closer. 2 rounds of talks have been made, which included first face-to-face in March and another in April via video conference.

Daily Support and Resistance

R3 1.089
R2 1.0871
R1 1.084

Pivot Point 1.082

S1 1.0789
S2 1.0769
S3 1.0738

EUR/USD– Trading Tips

The EUR/USD price is trading slightly bearish below an immediate resistance level of 1.0823, which is extended by the 50 EMA. On the 4 hour timeframe, the 50 EMA is pushing the EUR/USD pair around 1.0820. Below this, we may see EUR/USD prices falling until 1.0777, while bullish breakout of 1.0850 can lead EUR/USD prices towards 61.8% Fibonacci retracement level of 1.0869 level. Later today, the U.S. retail sales will help determine further trends in the EUR/USD prices.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.23326 after placing a high of 1.24376 and a low of 1.22827. Overall the movement of GBP/USD pair remained bearish throughout the day.

The GBP/USD pair remained relatively quiet above 1.2400 level at the start of the day but came under intense bearish pressure in late trading sessions. GBP/USD pair dropped to a fresh four day low of 1.2282 on the back of U.S. dollar strength and GBP weakness. However, it maintained to recover some of its losses in late session and ended up closing the day in a negative trend.

The U.K. government has published its recovery-strategy on Monday, which noted that the coronavirus was expected to circulate for an extended period of time and with the periodic waves. According to the strategy, the financial measures taken by the government to cope up with the damage caused by coronavirus to the economy were very expensive and that these measures could not be sustained for a longer period.

Furthermore, PM Boris Johnson has said that different parts of the U.K. will stay in lockdown longer than other parts. He added that any wrong move would be disastrous for the U.K. economy, and they will show no hesitation in reintroducing the measures if needed.

On Sunday, PM Johnson announced that restrictions will be lifted from local travel and local parks after six weeks of lockdown and that workers who cannot do work from home like construction & manufacturing industries were encouraged to return to their jobs.

However, he spared the details about how they could continue the work and not spread the virus. So, on Monday, groups representing U.K. businesses and workers criticized the government’s plan to ease lockdown. They complained that PM Johnson missed the crucial details while announcing the easing of lockdown, that how companies should prepare for safe return to work.

Daily Support and Resistance

R3 1.2577
R2 1.2508
R1 1.2422

Pivot Point 1.2353

S1 1.2268
S2 1.2198
S3 1.2113

GBP/USD– Trading Tip

The GBP/USD sideways trading continues in between a narrow trading range of 1.2360 – 1.2285. The Cable is still holding below 50 EMA, which is extending resistance around 1.2370 level today. On the 4 hour chart, the GBP/USD is gaining support at 1.2285 level while the 50 EMA and horizontal resistance stay at 1.2365 level. Today, the positive retail sales may drive the selling trend in the GBP/USD pair to lead its prices towards an immediate support level of 1.2280 and 1.2250. Conversely, the worse than expected retail sales data will lead the GBP/USD pair towards 1.2360 and 1.2450.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.651 after placing a high of 107.766 and a low of 106.472. Overall the movement of the USD/JPY pair remained bullish throughout the day. USD/JPY pair climbed to 2 weeks high above 107.70 level on Monday on the back of U.S. dollar strength. The pair USD/JPY moved up by 0.85% on the day amid U.S. dollar strength due to increased risk-on market sentiment.

The increased risk sentiment of the market made it difficult for JPY safe-haven currency to find demand on Monday hence gave a push to the USD/JPY pair prices. On Monday, the Bank of Japan signaled more measures in order to avoid the 2nd Great Depression caused by the coronavirus pandemic.

In its report published on Monday, BoJ announced that it would lift the cap from government & corporate bond purchases and also pointed to take additional measures if needed. BoJ had already decided to expand its monetary stimulus program on April 27 when it held its last meeting in which it described the current economic situation as “increasingly severe.”

BoJ, in its monthly meeting, forecasted that country’s economy would experience a contraction between 5 and 3 percent in the current year. Japan’s current coronavirus cases are recorded as 15,777, with 624 deaths. The increased number of appearing cases after the easing of lockdown has made BoJ take additional measures to put the world’s third-largest economy back on track.

On another note, on Monday, the Central Bank of Japan appointed its first woman executive director since it has originated. Tokiko Shimizu, a 55-year-old banker, was appointed as a first-ever female executive director in 138 years.

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

The USD/JPY traded sharply bullish to place a high around 107.850 amid stronger U.S. dollar and the risk-on sentiment. On the 4 hour timeframe, the USD/JPY pair is now trying to exhibit some correction as it’s price fell from 107.850 area to 107.400 support zone.

However, the 50 periods EMA are still suggesting strong odds of bullish bias, along with the MACD, which are also supporting the bullish trend in the USD/JPY pair. The violation of an immediate resistance level may extend buying until 107.900 level. Conversely, the closing of selling candles below 107.460 can continue selling bias until 107 and 106.850. The 50 EMA is supporting the bullish bias around the 106.650 area. All the best for today!

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

Forex Elliott Wave

How to Count Using the Elliott Wave Principle Part 3 of 3 – Advanced Level

Post author By Eduardo Vargas
Post date 11 May, 2020
1 Comment on How to Count Using the Elliott Wave Principle Part 3 of 3 – Advanced Level

Introduction

Previously, we presented in a theoric way several criteria to realize wave counting, which could allow the wave analyst to foresee the likelihood next path of the market. In this educational article, we’ll analyze some examples in the real market.

Case 1 – NZDUSD Advances in a Corrective Sequence

The NZDUSD price in its hourly chart shows the progress in two consecutive corrective patterns. Our intraday analysis begins at the intraday high at 0.61305 reached on April 14th.

The price market reveals a decline in five internal segments of Subminuette degree identified in green. Once completed this move, the kiwi reacted bullishly, moving upward in three waves. This move ended a wave (b) of the Minuette degree labeled in blue.

Observe how the price action completed the wave (c) of Subimiuette degree, developing an ending diagonal pattern, as commented on the previous article. The breakdown of this Elliott wave formation suggests the beginning of a bearish sequence that will correspond to a wave (c) of the Minuette degree.

The bearish sequence corresponding to wave (c) ended at 0.59104 on April 23rd reveals us that NZDUSD completed a zigzag pattern of Minuette degree.

The next move, developed by the NZDUSD cross, reflected the advance as a flat pattern and ended at 0.61758 on April 30th, when the kiwi developed an ending diagonal in the same way that the wave (b) of the previous zigzag pattern.

On the other hand, from the two patterns analyzed, we note the alternation principle in the corrective sequence, while the first correction is a zigzag, the second one is a flat pattern.

Finally, the two consecutive corrective patterns, lead us to observe that NZDUSD completed a 3-3 sequence. In this context, the study of previous waves will reveal what should be the likely structure in progress and what could be the potential next move.

Case 2 – EURGBP Begins a Five-Wave Sequence from a Different Low

The second case considers the scenario when the market starts a five-wave sequence from a higher low.

The EURGBP cross in its hourly chart shows the aggressive sell-off developed on December 12th, when the price plummeted to 0.82758. After this decline, the price consolidated and reached a slightly higher low at 0.82767 from where the cross began an impulsive movement identified as wave (i) of Minuette degree labeled in blue.

Once the second wave ended, EURGP realized a third extended wave, which boosted the cross until 0.85917 reached on December 23rd.

In this case, we observe the alternation principle in action. As the second wave is a simple correction. In consequence, the fourth wave must be a complex correction. In fact, from the chart, we observe that EURGBP developed a triangle pattern, which retraced beyond 38.2% of the third wave of Minuette degree. This context leads us to conclude that the cross should not reach a new higher high.

In this sense, the price action realized a limited higher high, which topped at 0.85959 last January 14th, from where it started to decline.

Conclusions

In this educational article, we showed a group of examples. In the first one, corresponding to the NZDUSD cross, we learned how the price action tends to end in ending diagonal patterns.

In the same way, we observed the alternation principle applied in corrective waves, while the first corrective structure corresponded to a zigzag, the second formation built a flat pattern.

In the second chart, we observed that an impulsive sequence not necessarily will begin in the lowest (or highest) level of the price chart. This context makes us remember that an Elliott wave structure could finish developing a failure in the wave 5 or C.

On the other hand, the retracement experienced by the third extended wave beyond the 38.2% warned us about the exhaustion of the bullish momentum. This context provides us a signal of the limited potential next move corresponding to the fifth wave.

Tags Counting Waves, Elliott Wave, Forex, Price Action, Technical Analysis, trading, Wave Analys

Forex Market Analysis

Daily F.X. Analysis, May 11 – Top Trade Setups In Forex – Choppy Sessions In Play!

Post author By Ali B.
Post date 11 May, 2020
No Comments on Daily F.X. Analysis, May 11 – Top Trade Setups In Forex – Choppy Sessions In Play!

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD currency pair failed to stop its Friday’s winning streak and rose just under the 4-hour chart 100-candle average at 1.0852 from the 1.0822 level, mainly due to the U.S. dollar weakness on the on back of the risk-on market sentiment. However, the reason for the risk-on market sentiment could be attributed to the on-going optimism about the easing of coronavirus-led restrictions in the U.S. and around the world.

The EUR/USD is trading at 1.0848 and is consolidating in the range between 1.0825 and 1.0851. At the USD front, the U.S. dollar erased its gains from the earlier session as most of the countries plan to ease the lockdown. As in result, the investor’s confidence got boost in the wake of risk-on market sentiment.

On the other hand, the Netherlands and France are pushing the European Union (E.U.) to use trade policy instruments and tariffs, to ensure the implementation of international environmental and labor standards. The initiative came after E.U. and Britain have tried to negotiate about the new trade deal, and it has raised concerns that Britain might seek to undercut the E.U. labor & environmental standards to boost its competitiveness.

The involvement of pro-free trade Netherlands might be able to change the attitude of the European Union E.U. towards thinking on the need to protect domestic industry and job, as per a French Diplomat.

However, it will remain to see if the proposal by France and the Netherlands can get support from other members and considered by Trade Commissioner Phil Hogan, as we know Phil Hogan is scheduled to announce a policy review later this year although the increase of protectionism may weigh on the shared currency.

At the virus front, the number of confirmed coronavirus cases rose to 169,575, with a total of 7,417 deaths reported so far on Monday, While the cases increased slightly by 357 in Germany on Monday against Friday’s +667. The death toll increased by 22, as per the German disease and epidemic control center, Robert Koch Institute (RKI).

If talking about recoveries, so approximately 145,600 people are reported to have recovered from the coronavirus so far. Looking forward, the economic calendar is empty, and the pair is expected to continue taking cues from the action in the stock markets. The fresh virus updates will be key to watch.

Daily Support and Resistance

S1 1.0722
S2 1.0783
S3 1.0811

Pivot Point 1.0843

R1 1.0871
R2 1.0904
R3 1.0964

EUR/USD– Trading Tips

The EUR/USD price is trading slightly bearish below an immediate resistance level of 1.0853, which is extended by the 50 EMA. On the 4 hour timeframe, the 50 EMA is pushing the EUR/USD pair around 1.0850. By the way, it’s the same level at which the EUR/USD completes the 50% Fibonacci retracement. Below this, we may see EUR/USD prices falling until 1.0780, while bullish breakout of 1.0850 can lead EUR/USD prices towards 61.8% Fibonacci retracement level of 1.0869 level. Above this, the next resistance may be found around 1.0900. Consider staying bearish below 1.0852 today.

GBP/USD – Daily Analysis

The GBP/USD currency pair extended its Friday’s bullish moves and continued to take bids around 1.2432 while representing 0.16% gains on the day. As well as, the currency pair cheered the fresh optimism about easing lockdowns statements by UK PM Boris Johnson’s. Moreover, the reason for the bullish run-up of the GBP/USD pair could also be attributed to the expectations surrounding an extension of wage aid.

However, the pair’s traders are cautious about placing any strong bids ahead of the third round of Brexit negotiations between the U.K. and European Union (E.U.). The UK PM Boris Johnson recently took a step to ease the lockdown restrictions from level 4 to 3 of the new five-tier ranking system, whereas the meaning of level 1 will be that coronavirus is no longer existing.

As well as, the Tory government also announced that the people could join their workplaces from Monday to those who cannot work from home. The previous stance of government was only to go if they must have too, but now the government has announced that anyone who cannot work from homes like construction and manufacturing business should go to their works.

On the other hand, the greenback gain traction in earlier sessions on optimism about easing lockdown restrictions, which eventually boosted the investor’s confidence in the market in the wake of risk-on market sentiment. Whereas, California, Michigan, and Ohio, three of the important states for U.S. manufacturing, permitted to open factories and some businesses, which eventually kept the U.S. dollar steady. While the U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.04% to 99.725 by 11: 25 PM ET (4:25 AM GMT).

At the coronavirus front, as per the latest report by the Department of Health, Britain’s COVID-19 death toll has increased by 269 to 31,855.

The UK Chancellor Rishi Sunak is expected to announce the extension of wage aid on Monday. The report hints that the Ministers are expected to extend the state bankrolling of wages by the end of September, although at a reduced rate of 60pc, while also boosted the salary packages of staff returned to work on a part-time basis.

At the US-China front, U.S. President Donald Trump fueled the US-China tension once again by claiming China for the virus outbreak, while China defied roughly. However, the UK PM Johnson has already rejected the agreement that ensures E.U. fishermen’s long-term access to British waters, while insisting the focus should be on annual negotiations.

Daily Support and Resistance

S1 1.2188
S2 1.2299
S3 1.2352

Pivot Point 1.241

R1 1.2464
R2 1.2521
R3 1.2632

GBP/USD– Trading Tip

The GBP/USD continues trading bearish below 50 EMA, which is extending resistance around 1.2420 level today. On the 4 hour chart, the GBP/USD is gaining support at 1.2313 level while the 50 EMA extends resistance at 1.2315 level. We can also see a strong selling candle right below 50 EMA, which suggests the potential of a selling bias in the GBP/USD pair. The more robust NFP figures have also driven selling bias in the GBP/USD pair, which is leading the GBP/USD pair towards 1.2315 and 1.2255 level. Conversely, a bullish breakout of 1.2470 level may influence the GBP/USD prices towards the next resistance level of 1.2488 level.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.609 after placing a high of 106.746 and a low of 106.219. Overall the pair USD/JPY moved in a bullish trend that day. At 4:30 GMT, the Average Cash Earnings for the year from Japan came in line with the expectations of 0.1%. The Household Spending for the Year from Japan was dropped by -6.0% against the expected drop by -6.3% and supported Yen.

At 17:30 GMT, the closely watched Average Hourly Earnings, Non-Farm Employment Change, and the Unemployment rate from the United States was released, which came in better than the expectations and raised the bars for U.S. dollar across the board. The Average Hourly Earnings were increased to 4.7% against the forecasted 0.5% in the month of April.

The Unemployment Rate from the United States was increased to 14.7% in April against the expectations of 16% and in comparison to March’s 4.4%. The Non-Farm Payrolls, which lost during April month, were recorded as 20.5M against the expected loss by 22 M and gave strength to the U.S. dollar.

If we look at the results, the drop in jobs was higher ever recorder as 20.5M but was under the expected value, so gave strength to the U.S. dollar. The huge number of lost jobs in a single month was even higher than it was in the Great Depression. However, it still managed to support the U.S. dollar.

On the other hand, the recorder unemployment rate was also high in the month of April in comparison to the previous month’s rate, but it still managed to support the U.S. dollar on Friday as it did not exceed the expected rise of rate.

Daily Support and Resistance

R3 107.31
R2 106.99
R1 106.63

Pivot Point 106.31

S1 105.95
S2 105.63
S3 105.27

USD/JPY – Trading Tips

The USD/JPY is trading sharply bullish at 117.450 in the wake of sharp bullish bias in the U.S. dollar since the release of less bad than expected economic data. On the 4 hour timeframe, the USD/JPY pair has formed three white soldiers who are likely to drive bullish bias in the USD/JPY pair. These may lead the USD/JPY prices further higher towards the next resistance level of 107.460.

The violation of an immediate resistance level may extend buying until 107.900 level. Conversely, the closing of selling candles below 107.460 can extend selling bias until 107 and 106.850. The 50 EMA is supporting the bullish bias around the 106.650 area. All the best for today!

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

Forex Fibonacci

Fibonacci Trading: When Momentum is Lacking

Post author By Tareq Sikder
Post date 11 May, 2020
No Comments on Fibonacci Trading: When Momentum is Lacking

Traders wait for the price to trend from 61.8% Fibonacci level. This is what attracts more traders to trade, which generates good momentum. When the price trends from 61.8% level, it usually goes up to 161.8%. Since the price gets enough space to move, it offers better risk-reward. This is another reason that Fibonacci traders love to trade in a chart when the price trends from 61.8%. However, the Forex market is uncertain. We may see that the price does not head towards 161.8% with good momentum upon trending from 61.8% from time to time. In today’s lesson, we are going to demonstrate an example of this.

This is an H1 chart. The chart shows that the price heads towards the South with good bearish momentum. Upon producing a strong bearish candle, it starts having a bullish correction. Fibonacci traders shall get themselves ready by drawing Fibo levels on the chart to find out potential short opportunities in the pair.

Here it is. The chart shows that the price breaches 78.6% level and trades above the level for two more candles. This means the price is in 61.8% zone. If the price trends from here, it may go towards 161.8% level. Yes, it would be better if the price goes towards the North and trends right from the level 61.8%. Nevertheless, the sellers still are to count the move from 61.8% zone. The chart produces a bearish engulfing candle followed by a doji candle. Since the reversal candle comes out as a bearish engulfing candle forming from 61.8% zone, some sellers may trigger a short entry (some may wait for the price to breach the last lowest low). Let us proceed to the next chart to find out what the price does.

The price heads towards the South and it makes a breakout at the last swing low as well. The pair may get more short orders now. However, the price does not head towards the South. It seems that 161.8% level is far away for the price to reach. It does not usually happen but this is how the Forex market runs. It does not always run on a single equation. A question may be raised here what does a trader do with his entry? Since it is an H1 chart based entry, it must be left behind and let it decide its fate by setting Stop Loss and Take Profit accordingly.

Tags Bullish, bullish correction, correction, Fibonacci, Fibonacci level, Fibonacci Levels, Fibonacci Trading, Forex, Forex Fibonacci, Price Action, Technical Analysis, trading

Forex Elliott Wave

How to Count Using the Elliott Wave Principle Part 2 of 3 – Advanced Level

Post author By Eduardo Vargas
Post date 11 May, 2020
No Comments on How to Count Using the Elliott Wave Principle Part 2 of 3 – Advanced Level

Introduction

In our previous educational article, we discussed the basic concepts of the Wave Principle developed by R.N. Elliott and the wave counting process.

Glenn Neely, in his work “Mastering Elliott Wave,” describes a series of rules that will allow the wave analyst to objectively identify what kind of structural sequence is developing the price action.

In this educational article, we present a summary of the basic rules described by Neely and their impact on the wave analysis and counting process.

Use of Retracements in Wave Analysis.

When the wave analyst faces his first real-time market analysis, it may seem confusing to define what kind of wave the market is developing.

To solve this problem, Neely defined a set of rules that will allow the wave analyst to determine what kind of sequence the market develops.

These rules are described as follows.

Our reader can examine with more detail these rules and the Fibonacci retracements use in wave analysis here.

Types of Structural Series

R.N. Elliott, in his work “The Wave Principle,” defined some specific patterns that tend to repeat across the time. These patterns are built by different structural series that the wave analyst should know before to start the counting process. These Elliott wave structures are formed as follows.

Impulsive waves (:5)

Impulse – 5-3-5-3-5
Leading or Ending Diagonal – 3-3-3-3-3

Corrective waves (:3)

Zigzag – 5-3-5
Flat – 3-3-5
Triangle: – 3-3-3-3
Double Three – 3-3-3
Triple Three – 3-3-3-3-3

Remember that double and triple three are combined patterns.

The First Count and the Recount

As the level of complexity increases, wave sequences tend to create new waves of a higher degree, which can lead to confusing the wave analyst to identify where each wave begins and ends. For this, we use the validation channels and rules we have seen in previous articles.

Usually, the first analysis tends to be the one that presents the greatest challenge, because it tends to consider the highest level, or the lowest, to start the wave count. However, not necessarily the lowest, or highest level will be the beginning of an impulsive structure. This situation occurs because most methods of analysis consider the highest and lowest level as the starting point for analysis.

In terms of wave theory, a structural sequence will not end at the highest (or lowest) point due to the loss of momentum of price action. This situation will be reflected in one of the following four ways:

An impulsive sequence containing a failure in the fifth wave.
A flat pattern will end with a C-wave failure.
A complex formation will end with a non-restrictive contractive triangle.
An impulsive structure ends with a terminal pattern.

The following figure shows each of the four scenarios where the sequence will not end at the lowest level.

When a potential impulsive pattern experiences a reversal higher than its beginning, then the recount must consider that the origin of the previous movement is not the origin of an impulsive structural series, but can be part of a complex corrective structure.

Conclusions

In this educational article, we review different criteria described by Glenn Neely in his work “Mastering Elliott Wave,” which allow the wave analyst to identify what kind of structure the market could be developing.

Later, we reviewed the different patterns that R.N. Elliott described in his work “The Wave Principle” and his internal sequences. Currently, the patterns described by Elliott in the 1930s still can be recognized in the real market.

Finally, we discussed the cases where the market does not finish or start a new impulsive or corrective sequence from the lowest or highest point but will depend on how the previous structural series ends.

In the next educational article, corresponding to the third and last part of the wave counting process, we will see a series of examples of wave counting and identification.

Gold Breaking Below 50 EMA and Support – Brace for Selling!

Post author By Ali B.
Post date 11 May, 2020
No Comments on Gold Breaking Below 50 EMA and Support – Brace for Selling!

The safe-haven-metal prices flashing green and take bids around the $1,710 while representing 0.50% gains on the day mainly due to fresh allegations on China by the United States helping to increase the safe-have demand in the market. The Sino-US relationship was eased after both parties agreed to improve the atmosphere for fulfilling the phase-one deal’s promises. This came after President Donald Trump threatened new tariffs on Chinese goods in case of not buying $200 worth U.S. farm products by China.

The Consumer Credit for the month of March was released from the Federal Reserve of the U.S., which showed a decline by -12.0B against the expectations of positive 14.9B. This weighed on the U.S. dollar and limited the downfall of gold prices on Friday.

Furthermore, the latest economic data from the United States fueled expectations that the Federal Reserve will stimulate more in the next meeting, and markets started to price in for a negative interest rate environment. On Saturday, President Donald Trump said that the United States would purchase $3B worth of dairy & farm products in order to help the struggling U.S. farmers. He stated that the government’s purchase would be a part of “Farmers to Family Food Box.”

The demand for agricultural products was decreased due to the lockdown caused by the coronavirus pandemic, which started in March, and it has disrupted the supply chains across the nations. This has caused some U.S. farmers even to destroy their products, which they can’t store. Donald Trump also said with no evidence that coronavirus pandemic will go away without a vaccine. He spared the specifics, said that other viruses also disappeared, and the same would happen with this COVID-19. He added that viruses die too like everything else, and he was hopeful that this virus would also go away after some time.

Daily Support and Resistance

Support Resistance

1,699.50 1,731.90

1,685.10 1,749.90

1,667.10 1,764.30

Pivot Point: 1,717.50

XAU/USD – Daily Trade Sentiment

Gold is trading with a bearish bias, holding mostly below 1,710 resistance level. Gold is trying to cross below the 50 EMA support area, which can lead to gold prices further lower towards 1,694 level. Alongside, the RSI is also holding below 50, suggesting odds of selling bias in gold.

On the upper side, gold’s resistance is expected to be found near 1,720 and 1,737, whereas the support continues to stay around 1,694 regions. In case of a downward breakout, gold prices may slip towards 1,671 level.

Entry Price: Sell at 1700.8
Take Profit .1688.8
Stop Loss 1708.3
Risk/Reward 1.60

Profit & Loss Per Standard Lot = -$750/ +$1200

Profit & Loss Per Micro Lot = -$75/ +$120

Tags Forex, Gold, Technical Analysis, Trade Setup, trading, XAU

Crypto Market Analysis

Daily Crypto Review, May 11 – Bitcoin Hours from its Halving Event; Traders Entering the “Greed” Stage

Post author By Ilija Rankovic
Post date 11 May, 2020
No Comments on Daily Crypto Review, May 11 – Bitcoin Hours from its Halving Event; Traders Entering the “Greed” Stage

The cryptocurrency market has spent the weekend closely watching the timer to Bitcoin’s halving. Most cryptos had an over 10% price decrease on Sunday. Bitcoin is currently trading for $8,698, which represents an increase of 0.85% on the day. Meanwhile, Ethereum gained 0.25% on the day, while XRP went up by 0.13%.

Crypterium took the position of today’s most prominent daily gainer, with gains of 31.95%. Hyperion lost 22.39% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance decreased over the weekend, with its value currently at 67.25%. This value represents a 0.68% difference to the downside.

The cryptocurrency market capitalization decreased when compared to Friday’s value, with its current value being $239.74 billion. This value represents a decrease of $25.81 billion when compared to the value it had on Friday.

What happened in the past 24 hours

With Bitcoin halving being just hours away, everyone is looking at the biggest and most well-known cryptocurrency. However, just like before the previous halving in 2016, Bitcoin’s price dropped right before the event.

People are not scared though, as the fear and greed index shows that Bitcoin investors are in the greed phase, which shows us that people are quite interested in grabbing their Bitcoin before it becomes too late.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has, after failing to break the $10,000 resistance, started testing support levels in order to find one it can consolidate at. However, one support level by another fell and Bitcoin quickly reached double-digit losses, standing at under $9,000. It is currently bound by its immediate resistance at $8,880 and support at $8,650. It is important to note that Bitcoin fell back into a long-term upwards facing trend, which its price reacted to.

Key levels to the upside Key levels to the downside

1: $8,820 1: $8,650

2: $8,980 2: $8,000

3: $9,120 3: $7,750

Ethereum

Ethereum also lost quite a bit of its value over the weekend. The second-largest cryptocurrency by market cap failed to break $217.6 which triggered a downturn that brought its price to $178.65 levels. However, the price quickly recovered and Ethereum is back above $185. Ethereum is, unlike Bitcoin, in a descending trend which its price completely respected and acknowledged.

Key levels to the upside Key levels to the downside

1: $193.6 1: $185

2: $198 2: $178.65

3: $217.6 3: $167.8

Ripple

XRP pretty much followed the market when it comes to price movement over the weekend. The third-largest cryptocurrency by market cap also had an over 10% loss, which resulted in XRP falling below the $0.214 support (now turned resistance).

XRP managed to stabilize above $0.19, where it is trading at the moment.

Key levels to the upside Key levels to the downside

1: $0.2 1: $0.19

2: $0.205 2: $0.178

3: $0.214 3: $0.147

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

Forex Course

115. Trading The Double Tops and Double Bottom Chart Patterns

Post author By Reddy Shyam Shankar
Post date 10 May, 2020
No Comments on 115. Trading The Double Tops and Double Bottom Chart Patterns

Introduction

We will be discussing many Forex chart patterns in the upcoming course lessons that are widely used by traders around the world. But none of those patterns can beat the popularity of Double Bottom and Double Top chart patterns. This pattern can be seen frequently in not just the Forex market but all types of markets.

This pattern is independent of timeframes, i.e., it appears on all the time frames and the strategies that we are going to discuss work on all the trading timeframes too. Fundamentally, the Double Top and Double Bottom are reversal patterns, and they consist of two price swings approximately the same size on the same price level.

Double Top Chart Pattern

The Double Top chart pattern typically appears in an uptrend. It is formed when a bullish trend is interrupted at some point, and as a result, the price action tends to range. If that range consists of two swing tops, we can consider that as the formation of a Double Top chart pattern. After the second top, the price action drops and starts a new bearish trend.

Double Bottom Chart Pattern

The Double Bottom chart pattern typically appears in a downtrend. It is formed when the downtrend is interrupted at some point, which results in the price action to form a range. In the consolidation phase, if the range consists of two swing lows, and if the second low is struggling to reach the BottomBottom of the range, we can confirm the formation of the Double Bottom chart pattern. When the second Bottom is printed, we can expect the price to print a brand new higher high.

Neckline

The Double Top and Double Bottom patterns consist of a neckline. The Neckline is often used to confirm the pattern. The Neckline in a Double Top pattern is the horizontal level at Bottom where the two tops converge. Likewise, Neckline in a Double Bottom pattern is the horizontal level at the top where the two bottoms converge.

How To Trade The Double Top & Double Bottom Patterns?

Double Top Pattern

The below charts represents the formation of a Double Top pattern on the AUD/JPY daily Forex chart.

In the below chart, we had activated a sell trade when the price action broke below the Neckline. The stop-loss is placed just above the Double Top pattern. It is advisable to set the take-profit order two times below the size of the pattern. Activating our trades at the Neckline is the safest and most professional way of trading this pattern; because it shows that the last buyers are out of the league, and going short positions from here is a good idea.

Double Bottom Pattern

The chart below represents the formation of a Double Bottom chart pattern on the GBP/AUD Forex pair.

As we can clearly see below, when the price action is closed above the Neckline, it indicates a buy signal. We can see the most recent leg of the buyers being very strong, which indicates the buyers’ strength. Hence, in this case, we have decided to place the stop-loss just below our entry. For placing TP, we chose the previous recent high, and we can see how perfectly the price respected our placement.

This ends our discussion on Double Top & Double Bottom Forex chart patterns. We, at Forex Academy, have provided a lot of strategies to trade this pattern in the Basic Strategies section. You can check them out to get a deeper insight into these patterns. Cheers!

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Tags double bottom, Double Top, Education, Forex, Forex Chart Patterns, Forex Course, Forex Trading, Patters, Technical Analysis, Technical Trading, trading

Crypto Market Analysis

Daily Crypto Review, May 8 – Bitcoin Contesting $10,000 as Halving Nears – What’s Next?

Post author By Ilija Rankovic
Post date 8 May, 2020
No Comments on Daily Crypto Review, May 8 – Bitcoin Contesting $10,000 as Halving Nears – What’s Next?

The cryptocurrency market has spent the day mainly watching Bitcoin’s price rise prior to the halving. With all eyes on Bitcoin as its halving event nears, other cryptos moved far less than the biggest cryptocurrency. Bitcoin is currently trading for $9,796, which represents an increase of 5.64% on the day. Meanwhile, Ethereum gained 1.85% on the day, while XRP went down by 0.13%.

Crypterium took the position of today’s most prominent daily gainer, with gains of 65.26%. Numeraire lost 8.48% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased even more in the past 24 hours as it was one of the few cryptos that managed to pass its resistance levels, with its value currently at 67.93%. This value represents a 0.74% difference to the upside.

The cryptocurrency market capitalization increased when compared to yesterday’s value, with its current value being $265.97 billion. This value represents an increase of $8.08 billion when compared to the value it had yesterday.

What happened in the past 24 hours

Although the worldwide coronavirus pandemic has created global economic difficulties, we see cryptocurrencies growing in price, volume as well as the number of transactions. According to Brad Robertson, the head of a blockchain incubator Polyent labs, digital currencies seem appealing in the short term due to the price increase they have undergone in the past few weeks.

With the increased interest in crypto, constant printing of fiat currencies (especially during the coronavirus outbreak), and Bitcoin halving, we may see a bull run sooner than we think.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap spent the day trying to reach above $10,000. After it spent some time consolidating at the $9,200 area, Bitcoin spiked and tried to tackle the $10,000 level. However, the price could not get past it even with an extreme increase in volume, so Bitcoin fell down to $9,800 levels. Even so, the daily gains are more than substantial.

Bitcoin’s volume almost tripled on the day, while its RSI level reached overbought territory during the spike, but left it soon after.

Key levels to the upside Key levels to the downside

1: $9,880 1: $9,740

2: $10,015 2: $9,580

3: $10,350 3: $9,250

Ethereum

Ethereum spent the day after leaving the descending trend mostly in trying to find a place to consolidate at. The second-largest cryptocurrency by market cap rejected the $217.6 level and fell down. However, the downtrend was quickly stopped by the top descending trend line, therefore confirming that Ethereum no longer belongs to that trend.

Ethereum’s volume doubled during the move, which brought it out of the trend but normalized after. Its RSI level currently hovers just above the value of 51.

Key levels to the upside Key levels to the downside

1: $217.6 1: $198

2: $225.5 2: $193.6

3: $240 3: $185

Ripple

XRP continued creating lower highs even today. It is the only cryptocurrency out of the top3 to not be in the green on the day. While its price is heavily guarded against falling down by the $0.214 support level, if the cycle of lower lows continues, XRP will have no other option but to give up on this level.

XRP’s volume increased slightly during one period of the day but quickly normalized. Its RSI level is currently just above the value of 47.

Key levels to the upside Key levels to the downside

1: $0.227 1: $0.214

2: $0.235 2: $0.205

3: $0.285 3: $0.2

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

Forex Course

112. Summary – Elliot Wave Theory

Post author By Reddy Shyam Shankar
Post date 7 May, 2020
2 Comments on 112. Summary – Elliot Wave Theory

Introduction

Over the last six lessons, we discussed the Elliot Wave Theory from understanding the basics of applying it in the financial markets. In this article, we shall have a quick summary of the previous learnings.

The Elliot wave theory was discovered by a professional accountant named Ralph Nelson, who claimed that markets don’t move in random directions, but recurring swings called waves. Most importantly, Elliott stated that the waves are fractals. That is, each swing or wave in the market can be broken into smaller and smaller waves of the same type.

The market moves in the 5-3 Elliot pattern. This pattern is appliable on uptrend and downtrend. Also, it occurs in every timeframe.

Impulse Waves

In the 5-3 wave pattern, 5 refers to the impulse waves. The 5-wave pattern is a trending wave pattern that moves along the overall trend. It is made up of 5 waves where Wave 1, 3, and 5 are impulse waves towards the trend, while waves 2 and 4 are retracements to the impulse waves. Out of the three impulse waves, wave 3 is usually the strongest and the longest and is ideal for trading.

Wave 1 is where only a small number of people take positions.
Wave 2 is where the institutional traders and some smart retail traders enter.
Wave 3 is where the mass public enter, while smart & professional traders exit their positions.

Corrective Waves

For every trending market, there is a pullback. And this retracement corresponds to corrective waves. The corrective waves are a 3-wave pattern that moves against the overall trend. It is denoted as wave ABC or abc, depending on the timeframe. The first corrective wave begins after the end of the impulse wave. Note that, the corrective wave pattern should not go beyond the area of wave 1 impulse wave. If it does happen, the waves must be counted from the beginning.

There are 21 types of corrective patterns based on their design. The three basic ones include

The Zig-Zag Formation
The Flat Formation
The Triangle Formation

Rules in Elliot Wave Theory

There are three rules in the Elliot wave pattern to confirm the legitimacy of the pattern. The strategies will hold true only if the following strategies are satisfied.

Rule 1: Wave 3 must never be the shortest impulse wave.
Rule 2: The Wave 2 must hold above Wave 1.
Rule 3: Wave 4 must never cross in the price area of Wave 1.

Even if one of the rules is not satisfied, waves must be recounted from the start.

We have also discussed different ways of trading the Forex market using the Elliot wave theory, and that lesson can be found here.

Final words

The Elliot Waves are a great tool in determining the direction of the market. One can get a clear understanding of if the market is trending or retracing. Accordingly, one can take a trading decision by adding other tools which will help in precise entries.

We hope you found the Elliot Wave theory course informative and useful. Do try this out for yourselves as well. Happy trading!

Tags Elliot Summary, Elliot Wave Theory, elliot waves, Forex, Forex Course, Price Action, Summary, Technical Analysis, Technical Trading, trading

Forex Market Analysis

Daily F.X. Analysis, May 07 – Top Trade Setups In Forex – Braces for BOE Policy Decision!

Post author By Ali B.
Post date 7 May, 2020
1 Comment on Daily F.X. Analysis, May 07 – Top Trade Setups In Forex – Braces for BOE Policy Decision!

The greenback gained against most of its rivals and became the best performer along with JPY on Wednesday. Despite the loss of 20 million jobs in U.S. private payrolls, the U.S. dollar still managed to remain high on board. The ADP Non-Farm Employment change showed that during April, about 20236K people reported as jobless against the 20500K of expectations. Brace for U.S. Jobless Claims…

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.07957 after placing a high of 1.08458 and a low of 1.07817. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD posted losses for 3rd consecutive day on Wednesday amid the new economic forecast by the European Commission. The COVID-19 pandemic has driven the European Union into a deep and uneven recession due to the contraction of national economies amid the disruptive work, daily life, and the movement of goods.

The new economic forecast by the European Commission came in after weeks of industrial shutdowns and social restrictions due to coronavirus pandemic. The economy of the whole Euro-region was forecasted to shrink by 7.5% this year after the increased unemployment, public debts, and the steps taken by the government to contain the virus spread. The forecasted decline in the economy is far worse than the contraction of around 4.5% during the Great Recession.

According to the European Commission, the economies of Italy, Spain, and Greece will see the contraction of more than 9% this year. The news gave a negative impression of the single currency and hence weighed on EUR/USD on Wednesday.

At 11:00 GMT, the German Factory Orders for the month of March were dropped by -15.6% against the expected drop of 10.0% and weighed on EUR. At 12:15 GMT, the Spanish Services PMI came as 7.1 against the expected 10.0 to weigh on EUR. At 12:45 GMT, the Italian Services PMI exceeded the expectations of 9.2 and came in as 10.8 in the month of April and supported EUR.

However, at 12:50 GMT, the French Final Services PMI came in line with the expectations of April as 10.2. At 12:55 GMT, the German Final Services PMI for April exceeded the expectations of 15.9 and came in as 16.2 to support EUR. However, the Final Services PMI for the whole bloc came in line with the expectations of 12.0. At 14:00 GMT, the Retail Sales for the month of March dropped the same as expected by 11.2%. Most data from Europe side came against EUR and hence weighed on EUR/USD prices on Wednesday.

Daily Support and Resistance

R3 1.0901
R2 1.0875
R1 1.0834
Pivot Point 1.0808
S1 1.0768
S2 1.0741
S3 1.0701

EUR/USD– Trading Tips

The EUR/USD price fell sharply from 1.0820 zones to place a low of around 1.0783. Closing of candles above this level is suggesting odds of bullish retracement. Continuation of buying above 1.078 can lead the pair towards the next resistance level of 1.0832 level. The EUR/USD pair has dropped below the double top resistance level of 1.0817, and the closing of candles below this level may extend selling bias until 1.0752. The EMA is still suggesting selling bias. Therefore, we may see selling below 1.0817. While bullish crossover above 1.0817 can lead to EURUSD prices towards 1.0865.

GBP/USD – Daily Analysis

The pair GBP/USD was closed at 1.23413 after placing a high of 1.24499 and a low of 1.23349. Overall the movement of GBP/USD remained bearish throughout the day. The GBP/USD pair on Wednesday posted losses for the 4th consecutive day and hit a fresh weekly low near 1.2330. The drop in GBP/USD pair was attributed to the strength of the U.S. dollar across the board.

Greenback gained against most of its rivals and became the best performer along with JPY on Wednesday. Despite the loss of 20 million jobs in U.S. private payrolls, the U.S. dollar still managed to remain high on board. The ADP Non-Farm Employment change showed that during April, about 20236K people reported as jobless against the 20500K of expectations.

Twenty million loss in U.S. private payroll was under the expected figure, so the U.S. dollar gained traction in the market on the back of the view that data came better than the expectations. Strong U.S. dollar weighed heavily on the GBP/USD pair and dragged its prices on Wednesday.

On the British side, the economic data about the Construction PMI for the month of April showed a decline to 8.2 against the expectations of 21.5 and weighed on GBP. Weaker than expected data from Britain caused pressure on Sterling and added in the downward movement of GBP/USD on Wednesday.

However, the mood towards Pound may change into positive on the next day when the Bank of England is due to announce its May monetary policy. Although no change in the interest rates will be seen given the circumstances, the nature of talks and comments on the British economy will be under consideration by traders.

Daily Support and Resistance

R3 1.2534
R2 1.2492
R1 1.2417
Pivot Point 1.2376
S1 1.2301
S2 1.226
S3 1.2185

GBP/USD– Trading Tip

The GBP/USD has traded in line without a previous forecast to test the support level of the 1.2318 level. The recent formation of inside up bar on the 4 hour time is suggesting odds of buying in the GBP/USD pair. On the higher side, the GBP/USD pair may find support around 1.2315 level, while resistance is likely to be found around 1.2385 and 1.2420 level. The 50 EMA lingers around 1.2470 level, and below this, we can expect additional selling in the GBP/USD pair. We are already keeping our sell limit around these levels.

USD/JPY – Daily Analysis

The USD/JPY was closed at 106.102 after placing a high of 106.617 and a low of 105.985. Overall the movement of USD/JPY remained bearish during the day. On Wednesday, the pair USD/JPY was dropped for the 4th straight day towards 105 level and remained under heavy selling pressure. The downfall in the USD/JPY pair seemed somewhat to ignore the strong buying of the U.S. dollar on Wednesday.

The latest ADP report about the private-sector jobs showed that employment in the Non-farm industry was declined by 20.236 million in April as compared to the decline of 149K in March. Greenback showed a muted reaction to this report by ADP on Wednesday because the figure came in less than the expected decline of 20.500 million, but the decline itself was huge.

Meanwhile, the downward trend of USD/JPY was continuous, which could be attributed to the worsening of US-China relations. After the threats given by the U.S. President Donald Trump to cancel the phase-one deal and impose new tariffs on Chinese goods, the risk-off market sentiment has been triggered and causing a drop in USD/JPY prices.

All of the threats given by Trump came on the back of arguments about the origin of coronavirus and its global spread. The count of jobless people increased to more than 20 million people from the U.S. private sector, and the coronavirus pandemic caused this. The lockdown of economic activities has caused millions of people jobless. As a result, the U.S. dollar extended its decline against the Japanese Yen and moved below 106 level. Furthermore, the downfall in USD/JPY prices on Wednesday below 106 level could also be attributed to the technical selling for crossing the horizontal support near the mid-106 level.

Daily Support and Resistance

R3 107.19
R2 106.91
R1 106.54
Pivot Point 106.26
S1 105.88
S2 105.61
S3 105.23

USD/JPY – Trading Tips

The technical side of USD/JPY is still bearish. However, the pair is showing some bullish correction, which may lead it towards 106.289. The pair has already violated the symmetric triangle, which was extending support at 106.700. As we can see in the 4-hour chart above, the USD/JPY is holding below the symmetric triangle, which is now extending resistance around 106.650. The 50 M.A. is also keeping pressure on the pair around the same level of 106.650. Below this level, we may see a selling trend in the USD/JPY pair until the next target levels of 106.

All the best for today!

Tags EURUSD, Forex, Fundamental Analysis, GBPUSD, Technical Analysis, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, May 7 – Libra Reinforcing its Team; Bitcoin at $9,200

Post author By Ilija Rankovic
Post date 7 May, 2020
No Comments on Daily Crypto Review, May 7 – Libra Reinforcing its Team; Bitcoin at $9,200

The cryptocurrency market has spent the day trying to break the levels it was bound by. Bitcoin is currently trading for $9,201, which represents an increase of 2.52% on the day. Meanwhile, Ethereum lost 1.15% on the day, while XRP went down by 1.33%.

ReddCoin took the position of today’s most prominent daily gainer, with gains of 48.23%. Zilliqa lost 9.94% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance increased in the past 24 hours as it was one of the few cryptos that managed to pass its resistance levels, with its value currently at 67.19%. This value represents a 0.65% difference to the upside.

The cryptocurrency market capitalization increased when compared to yesterday’s value, with its current value being $257.89 billion. This value represents an increase of $9 billion when compared to the value it had yesterday.

Honorable mention

Libra reinforcing its team

Facebook’s digital currency made an announcement that Stuart Levey would be joining the project “later this summer.” His job will be overseeing Libra’s “combining technology innovation with robust compliance as well as regulatory framework.”

Levey has previously served the US government as the Under Secretary of the Treasury for Terrorism and Financial Intelligence.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap spent the day trying to break out of the range it was bound by. Strong bullish presence managed to push Bitcoin’s price up and away from the triangle formation it was in. While it is good news that Bitcoin broke to the upside, the fact that its price did not reach past the previous high of $9,500 is not so encouraging.

With its RSI close to the overbought territory, we can expect Bitcoin to retrace or trade sideways for some time before making another move.

Key levels to the upside Key levels to the downside

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

2: $9,250 2: $8,820

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

Ethereum

Ethereum tried to mirror Bitcoin’s movements and reach above its previous highs but failed to do so. The second-largest cryptocurrency by market cap bounced off of the descending trend it is currently in and started to drop in price. A major drop was, however, prevented by the $198 support level.

Key levels to the upside Key levels to the downside

1: $217.6 1: $198

2: $225.5 2: $193.6

3: $240 3: $185

Ripple

XRP continued creating lower highs while maintaining lows at a similar price. Today’s move stopped at $0.222 and then reverted and started moving downwards. XRP’s price fell under the $0.214 support level, turning it into resistance. However, the fight for $0.214 is still not over, as XRP might recover.

The $0.214 level will be moved to the “upside” key levels if XRP confirms its price below it.

Key levels to the upside Key levels to the downside

1: $0.227 1: $0.214

2: $0.235 2: $0.205

3: $0.285 3: $0.2

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

Forex Market Analysis

Daily F.X. Analysis, May 06 – Top Trade Setups In Forex – Eyes on Services PMI Figures!

Post author By Ali B.
Post date 6 May, 2020
No Comments on Daily F.X. Analysis, May 06 – Top Trade Setups In Forex – Eyes on Services PMI Figures!

The U.S. dollar was also supported by the re-opening of economies by many countries, including several states of the U.S., which resulted in the risk-on sentiment in the market. Meanwhile, the announcement Trump made against China about imposing tariffs in case China fails to meet the condition of buying U.S. goods worth 200$. On Wednesday

Economic Events to Watch Today

EUR/USD – Daily Analysis

Today in the early Asian session, the EUR/USD currency pair struggling to break a bearish channel around 1.09 after the registered biggest daily drop by 0.67% to 1.0899 level in over a month on Monday due to broad-based U.S. dollar strength.

At 11:45 GMT, the French Government Budget Balance by the French Treasury Agency was released, which showed a deficit of 52.5B. At 12:00 GMT, the Spanish Unemployment Change fell short of expectations of 500K and showed that during April, 282.9K people were jobless. At 14:00 GMT, the Producer Price Index for March showed a decline of 1.5% against the expected decline by 1.3%.

The Factory Orders dropped to a record of 10.3% during the month of March against the forecasted 9.7% decline. However, in contrast to the economic data, the U.S. Dollar Index remained strong during Monday when it gained about 0.4% and it to 99.59 level, which is the highest since Thursday. The key factor will be the NFP data on Friday this week, and investors will be looking forward to it.

U.S. dollar was also supported by the re-opening of economies by many countries, including several states of the U.S., which resulted in the risk-on sentiment in the market. Meanwhile, the announcement Trump made against China about imposing tariffs in case China fails to meet the condition of buying U.S. goods worth $200.

The renewed fears of a trade war between China & the U.S. also helped the greenback to gain traction against its rival currency EUR, and hence, the EUR/USD pair declined on Tuesday. Strong U.S. dollar amid better than expected economic data along with the weak EUR due to German court ruling on Tuesday caused EUR/USD pair to drop to 1.08257 level.

Daily Support and Resistance

R3 1.0927
R2 1.0921
R1 1.0912

Pivot Point 1.0906

S1 1.0896
S2 1.0891
S3 1.0881

EUR/USD– Trading Tips

The EUR/USD price trading slightly bearish falling to 1.0837 level after violating the upward trendline at 1.0889. On the 4 hour chart, the EUR/USD has formed a strong bearish engulfing candle, which is proposing selling bias among traders. Typically such a pattern reveals that buyers are weakened, and sellers may control the market. On the downside, the EUR/USD may encounter next support around 1.0835 level and violation of which can open further opportunity for selling until 1.07600 level.

GBP/USD – Daily Analysis

The GBP/USD is currently trading at 1.2428 and consolidates in the range between the 1.2410 – 1.2440. However, the traders are cautious about placing any position due to mixed market sentiment ahead of the U.S. Advance Nonfarm Payroll data, which is coming out during the New York session today.

Furthermore, the Bank of England will hold its official monetary policy meeting in the coming Thursday this week, and investors will be waiting for it. The BoE is expected to keep its interest rates unchanged at 0.10%. However, the speech and briefing will be new to Pound traders.

The pair GBP/USD roughly made a move on Tuesday and rose about only 0.05%. However, Cable has the potential to move in an upward direction and give a strong performance in the coming months. The U.K. & the U.S. talks will take effect from today over the matter of post-Brexit trade deal with E.U. It should be noted that this deal could help economies to recover from the COVID-19 pandemic.

On Tuesday, the International Trade Secretary Liz Truss started the trade talks via video conference with the U.S. trade representative Robert Lighthizer. Pound traders will keep an eye on the talks for further investment.

The drop of GBP/USD pair in the absence of any macroeconomic data and news from Great Britain was caused by the strength of the U.S. dollar across the board. Despite the poor Factory Orders data from the U.S. on Monday, the U.S. Dollar Index rose about 0.4% and remained strong against its rival currencies.

Daily Support and Resistance

R3 1.2597
R2 1.255
R1 1.2497

Pivot Point 1.2451

S1 1.2398
S2 1.2352
S3 1.2299

GBP/USD– Trading Tip

On Wednesday, the GBPUSD pair unchanged and holding mostly above 1.2435, testing a triple bottom pattern around 1.2425. The recent Doji pattern on GBP/USD pair is suggesting chances of bullish correction over 1.2425 support level. This may lead the GBP/USD prices towards 1.2515 level. On the lower side, the violation of 1.2420 support can lead the Sterling prices towards the next target level of 1.2316. Overall, the trading bias of GBP/USD is neutral right now, but the violation of 1.2420 can drive selling until the next support level of 1.2345 and 1.2310 level today.

USD/JPY – Daily Analysis

The USD/JPY currency pair finally broke out of trading ranges to trade at the 106.530marksk and recovered almost 25 pips from the initials low. The risk-on market sentiment is keeping the Japanese yen under pressure and provided support to the pair. On the other hand, the broad-based U.S. dollar weakness kept a lid on any gains in the currency pair.

The USD/JPY is trading at 106.35 and is consolidating in the range between the 106 – 106.80. However, traders are cautious about placing any strong position ahead of the fresh catalyst. The reason behind the recovery of the risk sentiment is the sign of easing lockdowns, which provided a positive mood around the equity markets. As in result, the Japanese yen became weaker in the wake of decrease safe-haven demand and seen as a key factor behind the pair’s modest uptick.

Moreover, a drop in the rate of virus-led fatalities has also helped in risk recovery sentiment. At the USD front, the U.S. dollar lost its bullish traction and struggled to gain any follow-through traction on Tuesday. The weak U.S. dollar was considered as a barrier to restrict currency pair’s gains at least for now.

Anyhow, the currency pair stopped its 2-day decline streak, and now it will be interesting to see if the buyers can maintain the move due to the concerns about a US-China spat about the origin of the coronavirus.

Looking forward, the market traders will now keep their eyes on the U.S. economic docket, which will release the ISM Non-Manufacturing PMI. This coming data will likely influence the USD price moves and produce some short-term trading opportunities.

Daily Support and Resistance

R3 107.36
R2 107.14
R1 106.86

Pivot Point 106.64

S1 106.37
S2 106.14
S3 105.87

USD/JPY – Trading Tips

The technical side of USD/JPY has turned bearish as the pair continues to trade bearish after violating the symmetric triangle support level of 106.700. As we can see in the 4-hour chart above, the USD/JPY pair has crossed below the symmetric triangle, which is now extending resistance around 106.650. The 50 M.A. is also keeping pressure on the pair around the same level of 107.050. Below this level, we may see a selling trend in the USD/JPY pair until the next target levels of 106

All the best for today!

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

Crypto Market Analysis

Daily Crypto Review, May 6 – China’s Digital Yuan to Fully Replace Cash? Former BoC President Discusses

Post author By Ilija Rankovic
Post date 6 May, 2020
No Comments on Daily Crypto Review, May 6 – China’s Digital Yuan to Fully Replace Cash? Former BoC President Discusses

The cryptocurrency market has spent the day consolidating and testing its support and (in a rare case) resistance levels. Bitcoin is currently trading for $8,954, which represents n increase of 1.12% on the day. Meanwhile, Ethereum lost 0.86% on the day, while XRP went down by 0.57%.

DigiByte took the position of today’s most prominent daily gainer, with gains of 23.49%. Hyperion lost 31.82% on the day, making it the most prominent daily loser.

Bitcoin’s dominance stayed at the same place in the past 24 hours, with its value currently at 66.54%. This value represents a 0.09% difference to the upside.

The cryptocurrency market capitalization stayed at the same place when compared to yesterday’s value, with its current value being $248.89 billion. This value represents an increase of $0.24 billion when compared to the value it had yesterday.

Honorable mention

Digital Yuan replacing cash

Li Lihui, former Bank of China President, announced that the launch of the digital yuan is certain and that it could replace cash, but only if four circumstances are met. These features of digital yuan would be:

greater efficiency
lower transaction costs
enough economic scale alongside commercial value
peoples’ acceptance

The central bank of China is currently testing digital yuan. The tests are currently showing great interest approval of the current users, as well as a surge of new users.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap spent another day trying to find its place to consolidate at or to escape the narrow ranges it has been in for the past couple of days. Bitcoin tested both the $8,820 support and $9,120 resistance, as well as the middle level of $8,980. While the price is currently slightly below the $8,980 level, it is unknown where Bitcoin will go in the short term, and traders should wait for a move towards either side with large enough volume.

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 lost some of the gains it made as the price had a mini-meltdown that brought it from $212 to $200. Ethereum is trading in a wide range, bound by the $198 support level and the $217.6 resistance level. One more level between these two might emerge in the very near future. Traders should proceed with caution around $210-$215 levels but can trade within this range.

Key levels to the upside Key levels to the downside

1: $217.6 1: $198

2: $225.5 2: $193.6

3: $240 3: $185

Ripple

XRP spent its day testing its $0.214 support level. The price fell under the level a couple of times but managed to spring back up extremely fast. While the support seems strong enough, the lack of volatility and volume indicates preparation for the next big move. Whether the move will be caused by Bitcoin’s rise/fall or if it will be caused by XRP itself is unknown. However, traders should have an easy time spotting the difference in volume and trading alongside the move that is to come.

Key levels to the upside Key levels to the downside

1: $0.227 1: $$0.214

2: $0.235 2: $0.205

3: $0.285 3: $0.2

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

Crypto Market Analysis

Daily Crypto Review, May 5 – Bitcoin Breaking $9,000 Again; Craig Wright’s Satoshi Nakamoto Case Court Date Set

Post author By Ilija Rankovic
Post date 5 May, 2020
No Comments on Daily Crypto Review, May 5 – Bitcoin Breaking $9,000 Again; Craig Wright’s Satoshi Nakamoto Case Court Date Set

The cryptocurrency market has spent the day retesting support levels only to bounce off of them later on. Bitcoin is currently trading for $9,084, which represents an increase of 4.76% on the day. Meanwhile, Ethereum gained 5.45% on the day, while XRP went up by 4.55%.

Hyperion took the position of today’s most prominent daily gainer, with gains of 79.20%. Maker lost 6.49% on the day, making it the most prominent daily loser.

Bitcoin’s dominance increased slightly in the past 24 hours, with its value currently at 66.45%. This value represents a 0.13% difference to the upside.

The cryptocurrency market capitalization decreased when compared to yesterday’s value, with its current value being $248.65 billion. This value represents a decrease of $4.68 billion when compared to the value it had yesterday.

Honorable mention

Craig Wright Satoshi court case

Lawyers representing both sides told the public that the trial would start on July 6. This case is extremely important for the cryptocurrency community as it will effectively decide if Craig Wright has access to the 1.1 billion BTC that were initially mined.

There should be no more postponing to the trial as the lawyers confirmed that they are not planning to delay the trial.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap successfully held up when its $8,650 support level was tested, only to bounce right after the support level “test” was concluded. With bears reaching exhaustion, BTC quickly bounced from $8,650 all the way up above $9,120. It was stopped at the resistance level, and it is not trying to find its price level above $8,980 and below $9,120.

The volume was steady throughout the day, while the RSI level increased to 61.

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 had a good day as well, with its price steadily growing after bouncing off the $198 support level. After the level held up successfully, the second-largest cryptocurrency by market cap started increasing in price and reached $212.5, where it stopped (for now). Since Ethereum is in the middle of the range, there are no tells where the price can go from here. However, traders should look for bounces off of the resistance or support levels after they have been reached.

Key levels to the upside Key levels to the downside

1: $217.6 1: $198

2: $225.5 2: $193.6

3: $240 3: $185

Ripple

XRP fell under the $0.214 level, all the way to $0.21, just to recover and push above $0.214 again. Ever since, the price has been steadily rising. The third-largest cryptocurrency by market cap established its price above $0.214 but seems to have slightly lost momentum towards the upside.

XRP’s volume has decreased in the most recent trading hours, while its RSI is at the value of 53.5

Key levels to the upside Key levels to the downside

1: $0.227 1: $$0.214

2: $0.235 2: $0.205

3: $0.285 3: $0.2

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

Forex Course

110 – The Key Rules in the Elliot Wave Theory

Post author By Reddy Shyam Shankar
Post date 4 May, 2020
No Comments on 110 – The Key Rules in the Elliot Wave Theory

Introduction

The Elliot Wave theory is a subjective topic. The key to trading Elliot waves is to find and comprehend the waves correctly. By understanding the wave theory correctly, we will be able to figure out which side of the market we have to be on. For doing so, there are a few rules we can lay on the Elliot waves while confirming the legitimacy of a wave. They are based on waves in the 5-3 wave pattern. And most importantly, these rules must never be broken.

The Three Golden Rules of Elliot Wave Theory

Rule 1: Wave 2 must be above wave 1

Wave 1 is the impulse wave, which is towards the trend, while wave 2 is a smaller corrective wave against the trend. So, to hold the definition of an uptrend, the second wave must never go below the first wave. In other terms, there should be a higher low in the price.

Rule 2: Wave 3 must never be the shortest impulse wave

Wave 3 is the second push towards the overall trend. This wave represents the move where all big players buy into the market. Hence, this wave is the strongest and the longest. According to the rule, the wave 3 can be shorter than either wave 1 or wave 5, but not BOTH.

Rule 3: The Wave 4 must stay above the wave 1

Wave 4 is the second corrective wave in the 5-wave pattern. And this wave should never cross below the area of wave 1. In technical terms, the low of Wave 4 must be higher than the high of Wave 1.

This sums up the rules that need to be mandatorily followed while trading the Elliot Waves. So, even if one of the rules is not satisfied, then the Elliot wave pattern must be counted from the beginning, and the current must be discarded.

Guidelines for trading Elliot Waves

Now that you are clear about the rules, here are some guidelines for trading the Elliot waves. Note that these are guidelines and not rules. Hence, they are not a necessary condition to trade Elliot waves.

🌊 When Wave 5 is the longer impulse wave, then wave 5 can approximately be as lengthy wave 1.

🌊 It is useful in targeting the end of Wave 5. Traders also determine the length of the Wave 1 and add it with the low of Wave 4 and use it as a possible target.

🌊 Wave 2 and Wave 4 will usually be different forms. For instance, if Wave 2 was a sharp correction, then Wave 4 will be a flat correction and vice versa. With this, chartists can determine the time of correction of Wave 4

🌊 After a strong Wave 5 impulse wave advance, the 3-wave ABC correction pattern could come down only until the low of Wave 4.

These are the guidelines traders must understand and interpret in their own meaningful way. With this, we have come to the stage where we can apply the concepts and trade the Forex market. So, stay tuned for the next lesson.

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Tags Education, Elliot Wave Theory, elliot waves, Forex, Forex Course, Forex Trading, Guidelines, Rules, Technical Analysis, Technical Trading

Forex Market Analysis

Daily F.X. Analysis, May 04 – Series of E.U. Manufacturing PMI In Highlights!

Post author By Ali B.
Post date 4 May, 2020
No Comments on Daily F.X. Analysis, May 04 – Series of E.U. Manufacturing PMI In Highlights!

On the forex front, the ICE U.S. Dollar Index marked a day-low of 98.64 Friday before paring losses to close flat at 99.08. Research firm Markit will publish final readings of April Manufacturing PMI for the Eurozone (33.6 expected), Germany (34.4 expected), France (31.5 expected). The Eurozone Sentix Investor Confidence Index for May will be released (-28.0 expected). The Commerce Department will report March factory orders (-9.4% on month expected) and final readings of durable goods orders (-14.4% on month expected).

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD currency pair stopped its three-day winning streak and dropped to 1.0936 while representing 0.33% declines on the day mainly due to the broad-based U.S. dollar strength in the wake of risk-off market sentiment. However, the reason for the risk-off market sentiment could be attributed to the intensifying trade war between the U.S. and China.

The EUR/USD is trading at 1.0936 and consolidates in the range between the 1.0935 – 1.0975. As we all well aware that the currency pair rose 0.48%, 0.75%, and 0.24% on Wednesday, Thursday, and Friday, respectively, but failed to extend its bullish rally on the first day of trading this week.

The GDP of the Eurozone dropped 3.8% in this quarter from the previous 14.4%. The ECB expects a 5% – 12% contraction in Eurozone’s economy this year. The International Monetary Fund (IMF) has forecasted the same Eurozone’s economic contraction as 5%, which was in line with the ECB’s projection. The ECB Vice President Luis de Guindos said in April that he expected a worse recession to be faced by the European economy than the rest of the world.

Furthermore, the President of the United States, Donald Trump, on Friday, announced to punish China for not holding the virus in its Wuhan city and mishandling the coronavirus outbreak by imposing tariffs. He said that trade relations with China were on his secondary importance now after the coronavirus outbreak. This also helped the EUR/USD pair to move upward.

The EUR was boosted by the hopes and hype of an early reopening of the economy across the globe. The pair EUR/USD was also helped by the developments made in COVID-19 vaccines, which caused the decreased demand for the U.S. dollar as a funding currency. EUR was also supported by the decreasing number of deaths and appearing cases in Germany, Italy, Spain, and France. Overall the EUR/USD pair has recovered from its March corona caused the lowest level of 1.0637 to its multi-week highest of 1.1019 on Friday.

Daily Support and Resistance

R3 1.1005
R2 1.0993
R1 1.0977

Pivot Point 1.0965

S1 1.095
S2 1.0937
S3 1.0922

EUR/USD– Trading Tips

On Monday, the EUR/USD price is holding at 1.0924 area, after placing a high of 1.0948 during the Asian session. On the 4 hour chart, the EUR/USD has formed a candlesticks pattern three black crows around 1.0927 level. Typically such a pattern shows that buyers are exhausted, and sellers may enter into the market soon. On the lower side, the EUR/USD pair has already completed 38.2% Fibonacci retracement at 1.0920, and now it can go for 50% retracement at 1.0900 mark. Both of the leading indicators are supporting the bullish trend, but a slight retracement can be expected. The resistance is likely to be found around 1.0971 and 1.0992. Consider staying bearish below 1.099 level today.

GBP/USD – Daily Analysis

The GBP/USD failed to stop its Friday’s losses and dropped below 1.2450 level while representing 0.36% losses on the day as the U.S. dollar is benefitting again from the risk-off sentiment in the financial markets. However, the reason behind the risk-off market sentiment is the intensifying trade tussle between the U.S. and China.

The on-going crisis of the UK Tory government about the mishandling of the virus situation also keeps the British Pound under pressure. The GBP/USD currency pair is currently trading at 1.2448 and consolidates in the range between the 1.2440 – 1.2487. On the other hand, the PMI from the U.S. also dropped to its 11 years lowest level at 41.5 and weakened the U.S. dollar across the board. However, the pair GBP/USD ignored US PMI and continued falling on Friday.

As for the news, Boris Johnson’s announcement for coming up with a plan on how to restart the economy next week did not give much impact to GBP. The biggest risks nowadays to the U.K.’s economy and the British Pound include the Brexit & coronavirus.

As for Brexit, both parties Britain and the European Union has its differences in the future relationship. Another challenge of Brexit is the timeline for securing a deal because Johnson has insisted that the transition period will not be extended by his government.

If Johnson will not seek an extension, which can only be applied before June 31, there is a possibility that both sides will not have a deal before the deadline of December. European Union insisted that an agreement of this size needs several years to be hammered.

Daily Support and Resistance

R3 1.2544
R2 1.2524
R1 1.249

Pivot Point 1.247

S1 1.2436
S2 1.2416
S3 1.2382

GBP/USD– Trading Tip

The GBPUSD pair showed strong bearish movement to trade at 1.2445, testing a double top pattern around 1.2425. The recent Doji pattern on GBP/USD pair is suggesting chances of bullish correction over 1.2425 support level. This may lead the GBP/USD prices towards 1.2515 level. On the lower side, the violation of 1.2420 support can lead the Sterling prices towards the next target level of 1.2316. Overall, the trading bias of GBP/USD remains bullish, considering the 50 EMA as it’s keeping the Cable bullish above 1.2420 today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.903 after placing a high of 107.405 and a low of 106.603. Overall the movement of USD/JPY remained bearish throughout the day. The USD/JPY pair during the America Session started to move upward towards the 107 level but failed to hold and preserve the recovery due to weak PMI.

At 4:30 GMT, the Tokyo Core CPI for the year was released, which showed a decline of -0.1% against the expected 0.1%. At 5:30 GMT, the Final Manufacturing PMI from Japan was released by the Bank of Japan for March, which showed that the manufacturing sector in Japan contracted to 41.9.

It was expected to remain the same as the previous month’s 43.7. The decline in manufacturing activity due to coronavirus pandemic resulted in weak Japanese Yen against the U.S. dollar. As for the U.S. data, at 18:45 GMT, the Final Manufacturing PMI form the U.S. was released, which came as 36.1 against the expectations of 36.9, and it weakened the U.S. dollar. At 19:00 GMT, the ISM Manufacturing PMI for the month of April was released, which was dropped to its 11 years lowest level at 41.5 from the previous month’s 49.1.

The drop in U.S. manufacturing activities due to a pandemic, which disturbed the supply chain across the globe, made the US PMI fell to its records low, and this weakened the U.S. dollar across the board on Friday. The weakened U.S. dollar pulled the pair USD/JPY to 106.6 level at the ending day of the week.

At 19:00 GMT, the Construction Spending from the U.S. also released, which came in as 0.9% against the -3.5% and supported the U.S. dollar. The ISM Manufacturing prices were also increased to 35.5 from the forecasted 30.7. The Wards Total Vehicle Sales during April were recorded as 8.6M against the 7.0M forecasted.

Daily Support and Resistance

R3 108.76
R2 108.14
R1 107.66

Pivot Point 107.03

S1 106.55
S2 105.92
S3 105.44

USD/JPY – Trading Tips

The USD/JPY pair take’s a bearish turn in the wake of mixed sentiment to trade around 106.700. As we can see in the 4-hour chart above, the USD/JPY pair is struggling to cross over the downward trendline, which is extending resistance around 106.950. The 50 EMA is also keeping pressure on the pair around the same level of 107.050. Below this level, we may see a selling trend in the USD/JPY pair until the next target levels of 106.44 and 106. The 50 EMA and MACD are also suggesting selling bias for the USD/JPY pair. Taking a selling trade below 106.950 can be a good idea today.

All the best for today!

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

Crypto Market Analysis

Daily Crypto Review, May 4 – Bitcoin Hash Rate reached All-Time Highs before the Halving

Post author By Ilija Rankovic
Post date 4 May, 2020
No Comments on Daily Crypto Review, May 4 – Bitcoin Hash Rate reached All-Time Highs before the Halving

The cryptocurrency market has spent the weekend trying to find a level to consolidate at and testing narrow ranges. Bitcoin is currently trading for $8,767, which represents a decrease of 3/69% on the day. Meanwhile, Ethereum lost 5.7% on the day, while XRP lost 4.76%. However, when compared to the prices on Friday, the market hasn’t moved that much, if at all.

Hive took the position of today’s most prominent daily gainer, with gains of 22.27%. Unibright lost 17.28% on the day, making it the most prominent daily loser.

Bitcoin’s dominance increased over the weekend, with its value currently at 66.32%. This value represents a 0.66% difference to the upside.

The cryptocurrency market capitalization decreased when compared to Friday’s value, with its current value being $243.97. This value represents a decrease of $3.58 billion when compared to the value it had on Friday.

Honorable mention

Bitcoin hash rate

Bitcoin’s third halving event is roughly two weeks away, and the BTC mining hash rate is pushing into record highs. Bitcoin hashing power plummeted by 40% just two weeks after setting its previous all-time high on March 8.

However, the hash rate increased by 90% in the following six weeks, reaching a new all-time high at 142 exahashes per second.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap spent the weekend trying to find a good place to consolidate at. The narrow resistance ranges of $8,650, $8,820, $8,980 and $9,120 were tested over the weekend. Bitcoin’s price spent the majority of the weekend below $9,000, and most recently retested the $8,650 resistance. That resistance has proven its strength yet again and BTC bounced back up.

The next few days will lead up to Bitcoin either breaking down below $8,650, which would trigger a downturn, or above $9,120, which would trigger an uptrend.

Key levels to the upside Key levels to the downside

1: $8,820 1: $8,650

2: $8,980 2: $8,000

3: $9,120 3: $7,750

Ethereum

Ethereum has spent the weekend bouncing between the $200 and $217.6. The second-largest cryptocurrency by market cap is currently on the path down as the $217.6 resistance level held up twice already. With the volume normalizing and the RSI falling back in the lower half of the range, we can expect a few more days of consolidation from Ethereum, unless a run-up or down gets triggered by an external factor (Bitcoin’s movement or fundamentals).

Key levels to the upside Key levels to the downside

1: $217.6 1: $198

2: $225.5 2: $193.6

3: $240 3: $185

Ripple

XRP is also trading in a tight range, bound by $0.214 to the downside and $0.227 to the upside. However, the most recent retest of the support level has brought the price all the way down to $0.208 before recovering above $0.214. This level seems to be barely holding for now, and it is likely that it will not hold up if being tested for much longer. If $0.214 fails, we can expect XRP to fall to the $0.205 or $0.2 levels.

Key levels to the upside Key levels to the downside

1: $0.227 1: $$0.214

2: $0.235 2: $0.205

3: $0.285 3: $0.2

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

Forex Course

109. Fractals – Elliot Waves within an Elliot Wave

Post author By Reddy Shyam Shankar
Post date 3 May, 2020
1 Comment on 109. Fractals – Elliot Waves within an Elliot Wave

Introduction

The 5-3 wave pattern is made up of the combination of 5-wave impulsive pattern and a 3-wave corrective pattern. The 5-wave pattern is inclined towards the predominant trend, while the 3-wave pattern is always against the trend. It is basically a pullback to the overall trend.

However, it does not end there. Within each wave in the impulsive and corrective waves, there is a set of other impulsive and corrective waves. And in that each smaller set of impulsive and corrective waves, there exists another miniature set of impulsive and corrective waves. This top-down approach goes on and on, forever.

The Top-down Approach

The Top-down approach can be considered as a synonym for fractals. In the Elliot wave theory, each wave is made of sub-waves and so on. In an uptrend, the 5-wave impulsive pattern faces upside. In these five waves, waves 1, 3, and 5 are towards the overall trend, while waves 2 and 4 against the trend.

In the same uptrend, the corrective wave pattern faces against the trend, where waves A and C face against the trend (downwards), and wave B faces towards the trend (upwards). In this sequence, there are five waves towards the overall trend (with two minor pullbacks) and three against the trend (with one minor pullback).

According to the fractal theory, each push up and push down has the above sequence. For instance, if we extract wave 1 and wave 2, then wave 1 will be made up of a 5-wave impulsive pattern, and wave 2 will be made up of a 3-wave corrective pattern. In conclusion, the combination of two waves (1 and 2) results in a set of 5-3 wave pattern. Refer to the below figure to get a clear understanding.

The Ordering and Labelling of Elliot Waves

We know that every wave can be broken into smaller waves and so on. But referring to these waves becomes the challenging part. So, to make simplify the labeling of these waves, Elliot has assigned a series of categories to the waves in terms of its size (from largest to the smallest).

Conclusion

We saw that every Elliot wave is made up of another miniature Elliot wave, and this break-down goes forever. But, according to Elliot, the degree identification is not a necessary factor in Elliot wave analysis. As a trader, our goal is not to assign the right degree to the wave pattern but to just understand the timeframe in which it is occurring. In the end, all that matters is the basic analysis of the wave theory. The identification of degree always remains secondary. Cheers.

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Tags 5-wave impulsive pattern, Corrective pattern, Elliot wave, Elliot Wave Theory, Forex Course, Fractals, Technical Analysis, Top-Down Approach, Waves, Waves within waves

Forex Elliott Wave

How to Count Using the Elliott Wave Principle Part 1 of 3 – Advanced Level

Post author By Eduardo Vargas
Post date 3 May, 2020
No Comments on How to Count Using the Elliott Wave Principle Part 1 of 3 – Advanced Level

Introduction

Wave counting is a systematic process by which the wave analyst identifies in a logical and standardized order the movement developed by the action of the market.

R.N. Elliott, in his work “The Wave Principle,” comments out that counting is not the most relevant part of the study of wave theory; however, this process empathizes that it is useful when studying the market progress across time.

Elliott, the Wave Principle, and Financial Markets

The Wave Principle, defined by R.N. Elliott, is part of the law of nature, which, when known, can make predictions without knowing the underlying causes that originated this phenomenon.

In this context, financial markets are the result of a socio-economic interaction, which reflects the psychological feeling of the participants interacting in the negotiation process.

Despite the interests of each market participant, the outcome of the trading process is reflected in a price chart.

Elliott, in his work “The Wave Principle,” detected that price tends to make repeated movements over time.

On the one hand, there are movements that, over time, create trends. Elliott defined these movements as impulsive and are characterized by being composed of five segments.

On the other hand, Elliott described movements that oppose to impulsive moves as corrections and are composed of three internal segments.

Once the price action completes an impulsive sequence and a corrective movement, the market completes a cycle and starts a new one of similar dimension or degree.

The following figure shows the complete structure of a cycle.

What We Have Studied So Far

Until now, our study of wave analysis has included the following aspects:

Identification of directional and non-directional movement.
Impulsive and corrective structure.
Types of corrective waves.
Extensions.
Canalization.
The alternation principle.
Validation of impulsive and corrective waves.
Complex corrective structures.
Identification and wave degrees.

The process of analyzing and identifying waves will be an integration of all these concepts, which will allow the wave analyst to make a high probability forecast for the next market movement.

The Degrees Importance

R.N. Elliott defined a set of degrees that do not obey a specific timeframe, for example, hourly chart, or 2-day temporality. But allow the wave analyst to evaluate a structural sequence that maintains a proportionality in terms of price and similar time.

Also, the use of the degrees allows us to identify, and in turn, to predict what will be the next movement that should act for the price in a given time horizon.

The following table shows the different degrees described by Elliott and the contributions incorporated by Prechter & Frost in his work “Elliott Wave Principle.”

In general, our analyses will start from the Subminuette degree.

Conclusions

In this first section, we have seen the basis of the Wave Principle developed by R.N. Elliott. Likewise, we review the structure that makes up a complete cycle and concludes with the description of the different degrees that Elliott defined to maintain a systematic order in the process of analysis.

In the next educational article, we will review the different regression rules that will allow us to systematize the counting process in the first wave count.

Daily F.X. Analysis, May 01 – Top Trade Setups In Forex – Eyes on U.S. ISM Manufacturing PMI

Post author By Ali B.
Post date 1 May, 2020
No Comments on Daily F.X. Analysis, May 01 – Top Trade Setups In Forex – Eyes on U.S. ISM Manufacturing PMI

The U.S. dollar traded with a selling bias in the wake of weaker economic data. The closely watched Unemployment Claims for a previous week from the United States weighed on the U.S. dollar when it came in as 3839K against the expected 3500K. The Personal Spending for the month of March from the U.S. was declined by -7.5% against the expected decline by -4.8% and added in the weakness of the U.S. dollar.

The Core Price Index for the month of March came in line with the expectations of -0.1% and had a null effect on the U.S. dollar. The Employment Cost for the first quarter of this year came in favor of the U.S. dollar when it exceeded 0.8% against the expectations of 0.7%. Later today, the market is expected to show thin volatility in the wake of Labor day holiday. However, investors will be focusing on the ISM Manufacturing PMI figures from the United States to drive further price action in the market.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The direct currency pair EUR/USD surged dramatically to close the day at 1.09517, having placed a high of 1.09725 and a low of 1.08327 yesterday. The ECB held its rates unchanged on Thursday and said that it expects the rates to remain at the present level or lower levels until the inflation of the Eurozone meet the level or reach near the projection of 2%. ECB also said that it was ready to adjust all of its instruments to achieve its projected aim of inflation in a sustained manner.

The Euro gained bullish momentum, although French Flash GDP for the First Quarter dropped more than expectations. It was expected to decline by -4.0 % in the first quarter of this year, but the results showed that the actual drop in French Flash GDP was recorded as -5.8%. While the German Retail Sales data decline by -5.6% against the expectations of -8.1%, it was in favor of the single currency Euro as the actual drop in German Retail Sales was less than its forecasted value.

At 11:45 GMT, the French Consumer Spending in the month of March was dropped by -17.9%, which were assumed to be dropped by -5.7%, and hence it weighed on single currency Euro. The French Prelim Consumer Price Index for the month of April came in favor of Euro as 0.1%, which was expected to decline by -0.2%.

The Spanish Flash Gross Domestic Product (GDP) for the First Quarter of year also dropped more than expected and weighed on Euro. The drop-in Spanish GDP was recorded as -5.2% at 12:00 GMT, whereas it was expected to drop by -4.2%. The Spanish Flash Consumer Price Index (CPI) for the year also showed a decline in April by -0.7% when it was expected as-0.5% and weighed on Euro currency.

The single currency Euro remained supportive by the data and ECB’s decisions on Thursday and gave strength to EUR/USD pair. Though the quarterly GDP of the Eurozone dropped to its lowest level since the records, the EUR/USD pair still managed to remain bullish throughout the day.

Daily Support and Resistance

R3 1.115
R2 1.1062
R1 1.1009

Pivot Point 1.0921

S1 1.0869
S2 1.078
S3 1.0728

EUR/USD– Trading Tips

On Friday, the EUR/USD price is holding at 1.0944 area, after placing a high of 1.0973 during the U.S. session on Thursday. On the 4 hour chart, the EUR/USD has formed a candlesticks pattern hanging man around 1.0955 level. Typically such a pattern shows that buyers are exhausted, and sellers may enter into the market soon. On the lower side, the EUR/USD pair can go for completing 38.2% Fibonacci retracement at 1.0920 and 50% retracement at 1.0900 mark. The trading sentiment for the EUR/USD continues to be bullish, especially after the bullish crossover of 50 EMA and MACD. Both of the leading indicators are supporting the bullish trend, but a slight retracement can be expected. The resistance is likely to be found around 1.0971 and 1.0992. Consider staying bearish below 1.099 level today.

GBP/USD – Daily Analysis

During Thursday’s Asian session, the GBP/USD is trading slightly bearish around 1.2562, maintaining the overall trading range of 1.2644 to 1.2525. Most of the buying triggered in the wake of weaker U.S. Jobless Claims figures

The U.K. Prime Minister, Boris Johnson, informed that the latest figure of 81,011 tests was hopeful, which were conducted on Wednesday, close to the government target of 100,000 tests per day by the end of April. He also said to the business community that he acknowledge their patience but informed that they have to keep going the way they are doing business now for the time being.

On the other hand, surgeons across the U.K. have warned that if the U.K. comes out of the lockdown too soon, it will cause the death of thousands. The Royal College of surgeons urged Prime Minister Boris Johnson to consider the service that saved his life when discussing the lifting of restrictions from lockdown.

Furthermore, there was no economic data or major event from the U.K. side, so the movement of the GBP/USD pair remained solely on USD. The U.S. dollar remained weak throughout the day because of poor economic data on Thursday.

The unemployment claims for the previous week from the U.S. were recorded as 3839K against the expectations of 3500K. An increased number of unemployed people weighed on the U.S. dollar and helped the pair GBP/USD to move in an upward direction and close the month with a bullish candle.

Daily Support and Resistance

R3 1.2896
R2 1.2769
R1 1.2682

Pivot Point 1.2555

S1 1.2467
S2 1.2341
S3 1.2253

GBP/USD– Trading Tip

The GBPUSD pair showed strong bullish movement to trade at 1.2540 after making a double top pattern around 1.2644. The recent bearish engulfing pattern on GBP/USD pair suggesting chances of selling in Sterling. On the lower side, the GBP/USD may find support around 1.2520. Below this, the GBP/USD prices have the potential to go after 1.2470.

Overall, the trading bias of GBP/USD remains bullish, considering the 50 EMA and MACD, both of the indicators are supporting selling bias. Consider staying bullish above 1.2510 and bearish trades below 1.2638 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.169 after placing a high of 107.497 and a low of 106.404. Overall the movement of USD/JPY remained Bullish throughout the day. The USD/JPY pair posted gains on Thursday despite the weakness of the U.S. dollar across the board amid poor than expected economic data. Throughout the day, the USD/JPY pair moved back and forth but managed to post gains in the ending day of the month.

On Thursday, Federal Reserve announced to expand the scope of its main street lending in order to support the small and medium-sized businesses by giving them credit. The scheme would now provide the credit flow to the financially sound small & medium-sized companies which were in good condition before the pandemic.

Federal Reserve announced to allow finance to companies with up to 15,000 employees and $5 Billion in revenue, which was previously set for companies with up to10,000 employees and $2.5 Billion in revenue during the period of the pandemic, which affected the business activity across the United States.

At 17: 30 GMT, the closely watched Unemployment Claims for a previous week from the United States weighed on U.S. dollar when came in as 3839K against the expected 3500K. The Personal Spending for the month of March from the U.S. was declined by -7.5% against the expected decline by -4.8% and added in the weakness of the U.S. dollar.

Daily Support and Resistance

R3 108.76
R2 108.14
R1 107.66

Pivot Point 107.03

S1 106.55
S2 105.92
S3 105.44

USD/JPY – Trading Tips

The USD/JPY pair take’s a bullish turn in the wake of risk-on sentiment to trade around 107.180. As we can see in the 4-hour chart above, the USD/JPY pair is struggling to cross over the downward trendline, which is extending resistance around 107.250. The 50 EMA is also keeping pressure on the pair around the same level of 107.250. Below this level, we may see a selling trend in the USD/JPY pair until the next target levels of 106.99 and 106.960. The 50 EMA and MACD are also suggesting selling bias for the USD/JPY pair. Taking a selling trade below 107.350 and buying above 107.030 can be a good idea today.

All the best for today!

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

Crypto Market Analysis

Daily Crypto Review, May 1 – XRP supported by the first Crypto Bank; Crypto market consolidating after a sharp move up

Post author By Ilija Rankovic
Post date 1 May, 2020
No Comments on Daily Crypto Review, May 1 – XRP supported by the first Crypto Bank; Crypto market consolidating after a sharp move up

The cryptocurrency market has spent the past 24 hours trying to find a level to consolidate at after dropping in price due to the lack of bull pressure. Bitcoin is currently trading for $8,770, which represents a decrease of 6.11% on the day. Meanwhile, Ethereum lost 4.74% on the day, while XRP lost 5.89%.

Hyperion took the position of today’s most prominent daily gainer, with gains of 14.4%. Hive lost 13.59% on the day, making it the most prominent daily loser.

Bitcoin’s dominance increased another half a percent from yesterday’s dominance levels. Its value is now 65.69%, which represents a 0.5% difference to the upside.

The cryptocurrency market capitalization decreased when compared to yesterday, with its current value being $247.55. This value represents a decrease of $3.25 billion when compared to the value it had yesterday.

Honorable mention

XRP supported by the first Crypto bank

The first FINMA licensed cryptocurrency bank, Sygnum Bank, has made an announcement on April 30 that Ripple’s XRP token is now available through its platform. Users can deposit, exchange, as well as credit services using the third-largest cryptocurrency.

Sygnum Bank customers can use fiat deposits such as the Swiss franc, the US Dollar, the Euro, the Singapore dollar, to buy, hold as well as trade XRP tokens on the Sygnum platform.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap spent the day retracing and looking for a place to consolidate at. After a bull run which brought its price above $9,000, the price had to retrace in order for the price increase to be considered “healthy. BTC initially dropped all the way to $8,400, but recovered and started its consolidation phase within a range bound by $8,650 to the downside and $8,820 to the upside. This is the time for traders that like range-trading to play around the support and resistance levels that bitcoin is bound by.

BTC’s volume decreased drastically in the past few candlesticks as the sharp moves subsided. Its RSI has also left the overbought area.

Key levels to the upside Key levels to the downside

1: $8,820 1: $8,650

2: $8,980 2: $8,000

3: $9,120 3: $7,750

Ethereum

Ethereum’s chart looks awfully similar to Bitcoin’s chart for the past few days. They acted almost exactly the same when it came to rising in price, retracing, and then consolidating. The second-largest cryptocurrency by market cap fell from its $225.5 highs to around $200 before going back up and consolidating at the ~$215 level.

Ethereum’s volume started normalizing after the sharp moves, while its RSI left the overbought territory with the current value of 59.

Key levels to the upside Key levels to the downside

1: $217.6 1: $198

2: $225.5 2: $193.6

3: $240 3: $185

Ripple

XRP lived through the same fate through the past 24 hours, where it reached new highs, retraced hoping to find stable support, and then started its consolidation phase. The third-largest cryptocurrency by market cap dropped from its $0.235 highs all the way down to $0.208 before going above the $0.214 level yet again.

XRP’s volume normalized after the explosive moves, while its RSI dropped to the value of 58, therefore leaving the overbought zone.

Key levels to the upside Key levels to the downside

1: $0.227 1: $$0.214

2: $0.235 2: $0.205

3: $0.285 3: $0.2

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

Forex Market Analysis

Daily F.X. Analysis, April 30 – Top Trade Setups In Forex – Brace for ECB Rate Decision!

Post author By Ali B.
Post date 30 April, 2020
No Comments on Daily F.X. Analysis, April 30 – Top Trade Setups In Forex – Brace for ECB Rate Decision!

On the forex front, the ICE U.S. Dollar Index dropped 0.4% on the day to a two-week low of 99.48, posting a four-day decline. The European Central Bank will announce its interest rates decision (deposit facility rate unchanged at -0.5% expected). The European Commission will post 1Q GDP (-3.4% on year expected) and March jobless rate (7.8% expected).

On the forex front, the ICE U.S. Dollar Index fell 0.4% on the day to a two-week low of 99.48, posting a four-day decline. The European Central Bank will announce its interest rates decision (deposit facility rate unchanged at -0.5% expected). The European Commission will post 1Q GDP (-3.4% on year expected) and March jobless rate (7.8% expected).

The U.S. Labor Department will release initial jobless claims in the week ended April 25 (3.5 million expected). The Commerce Department will report March’s spending (-5.0% on month expected) and personal income (-1.5% on month expected). The Market News International will release April Chicago PMI (37.7 expected).

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD soared over 0.5% to 1.0876. The economic figures revealed that the eurozone’s Economic Confidence Index slipped to 67.0 in April (73.1 expected) from 94.2 in March. Meantime, traders are awaiting the European Central Bank to maintain its key rates unchanged later today. Also, the eurozone’s first-quarter GDP (-3.4% on year estimated) and March jobless rate (7.8% expected) will be reported.

At the USD front, the dollar index’s (DXY) bounce from the 13-day low of 99.45 reached during Tuesday’s American trading hours, and it ran out of steam near 99.90 early on Wednesday. It’s mostly because both the S&P 500 futures and Asian stocks climbed, as in result greenback is losing its haven demand.

On the flip side, the European Central Bank will likely hold its policy unchanged and show a willingness to give more monetary stimulus if required. The EUR will likely give importance to the ECB’s moves on sentiment than traditional monetary policy signals.

At the USD front, the monthly safe-haven demand for the U.S. dollar also kept currency pair under pressure during the April month. The U.S. Dollar Index hit a daily low at 99.54 earlier in the morning but remained above Tuesday’s lows. Equity prices held on to gain.

At the coronavirus front, the number of confirmed coronavirus cases rose to 159,119, with a total of 6,288 deaths reported as per the German disease and epidemic control center report. While. The cases rose by 1,478 in Germany, the daily rate of increase shows rise to 0.9% from 0.8% on Wednesday. The death losses rose by 173 vs. 202 seen a day before.

Traders will keep their focus on the Eurozone CPI and GDP data ahead of the ECB policy decision. The coronavirus headlines and U.S. dollar dynamics could entertain the traders during the day ahead.

Daily Support and Resistance

S1 1.0774
S2 1.082
S3 1.0847

Pivot Point 1.0867

R1 1.0894
R2 1.0913
R3 1.0959

EUR/USD– Trading Tips

The technical side of the EUR/USD is more or less the same as yesterday. The EUR/USD is trading bullish around 1.0877 as the U.S. dollar seems to face bearish pressure due to dovish FOMC. The EUR/USD has the potential to go after 1.0882, and bullish breakout of this level may drive EUR/USD prices further higher until the next resistance level of 1.0960.

The trading sentiment for the EUR/USD continues to be bullish, especially after the bullish crossover of 50 EMA and MACD. Both of the leading indicators are supporting bullish trend with immediate support around 1.0814. We should consider taking buying trades above 1.0840 today.

GBP/USD – Daily Analysis

During Thursday’s Asian session, the GBP/USD currency pair extended its recovery moves from 1.2430 to 1.2470 but still considered bearish and trading below the 1.2500 level while representing 0.05% losses on the day mainly due to the broad-based U.S. dollar recovery pullback. The persistence criticism on Tory government policymakers’ performance about securing the personal protective equipment keeps the British Pound under pressure.

The GBP/USD is currently trading at 1.2478 and consolidates in the range between the 1.2429 – 1.2485. However, traders are cautious about placing any strong position ahead of coronavirus briefings by the UK PM Boris Johnson.

The Tory leader failed to head any daily coronavirus briefings even after the UK PM Boris Jonson returned to the office. Whereas, the reason behind the British PM Johnson’s little presence yesterday could be the news of his fiancée giving birth to a baby boy. On the other hand, the United Kingdom leader met with opposition Labour Party leader Keir Starmer and discussed the proceedings to combat the crisis.

The Tory party has been under pressure mainly due to the latest coronavirus report, which shows the U.K. as having the second-highest death toll in Europe. As well as, the criticism about the policymakers’ performance on securing the personal protective equipment (PPE) added further pressure on the Tory government. Despite this, the UK Tory government still claims to be on the top of performance while showing a coronavirus tracking app that warns the user when the contact with peoples infected by COVID-19,

On the flip side, the Foreign Secretary Dominic Raab said that the U.K. must pass and secure a Brexit deal by the end of the year to provide businesses, and this will be the best chance to ‘bouncing back’ economy from the coronavirus pandemic.

At the US-China front, U.S. President Donald Trump’s fueled fresh trader war between China and the United States, which sent the currency pair lower as the dollar caught bids in the wake of safe-haven demand. On the other hand, the Fed’s dovish pause and positive updates on the virus medicine have weighed on the U.S. dollar previously.

Daily Support and Resistance

S1 1.2315
S2 1.2371
S3 1.24

Pivot Point 1.2427

R1 1.2456
R2 1.2483
R3 1.2539

GBP/USD– Trading Tip

The GBP/USD continues to trade upward around 1.2479 area, as it’s maintaining a fresh trading range of 1.2525 – 1.2396. The GBP/USD has developed a bullish channel, which is supporting it around 1.2396 along with resistance around 1.2501. On the higher side, a bullish breakout of 1.2520 opens up further room for buying until 1.2560 and 1.2626 level.

The GBP/USD pair is holding a buying zone, above 50 EMA, which is also supporting the cable around 1.2409. Since the MACD is holding above 0, which demonstrates that one should be looking to enter a buying trades in the GBP/USD pair. Consider staying bullish above 1.2430 and bearish trades below 1.2520 level today.

USD/JPY – Daily Analysis

The USD/JPY lost 0.2% to trade around 106.61. The economic figures showed that Japan’s industrial production fell 3.7% on month in March, which is less than expectations of -5.0%, and retail sales declined by 4.5%. The currency pair failed to cheer the Japanese yen’s weakness and dropped to 6-weeks low yesterday.

The USD/JPY is trading at 106.64 and consolidates in the range between the 106.39 – 106.89. Whereas, the safe-haven demand for the U.S. dollar continues to lose due to risk-on sentiments in the stock market amid hopes of re-opening of the economies in Australia, New Zealand, and parts of Europe.

The currency pair continues to follow the broad-based U.S. dollar directions so far this week, with the latest stop in the dollar decline offering some support. The U.S. dollar index trades at 99.70 after hitting a daily low of 99.63.

The reason behind the risk-on market sentiment could also be the upbeat comments from the BOJ Governor. The Bank of Japan (BOJ) Governor Haruhiko Kuroda said that Japan’s financial system remains firm because a whole as bank groups have satisfactory capital buffers. Lastly, weakness in the U.S. dollar is also weighing on the USD/JPY. As expected, the Federal Reserve kept its benchmark interest rates unchanged at 0.00%-0.25%. The central bank acknowledged that the coronavirus pandemic is posting a considerable risk to the medium-term outlook for the economy.

Daily Support and Resistance

R3 108.1
R2 107.72
R1 107.3

Pivot Point 106.93

S1 106.51
S2 106.14
S3 105.72

USD/JPY – Trading Tips

The USD/JPY pair has traded mostly in line with the forecast to drop from 106.980 level to 106.350 level. At the moment, the USD/JPY pair is trading at 106.650, gaining immediate support around 106.350, and violation of this level can extend selling bias until 105.850. On the 4 hour chart, we can see the USD/JPY pair is holding below descending triangle pattern, which may keep the pair in a bearish mode under 106.980 resistance. At the same time, the 50 EMA and MACD are also suggesting selling bias for the USD/JPY pair. Taking a selling trade below, 106.850 seems to be a good idea today.

All the best for today!

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

Crypto Market Analysis

Daily Crypto Review, Apr 30 – Bitcoin +17% moves above $9,000, Altcoins follow as bullish Sentiment Prevails

Post author By Ilija Rankovic
Post date 30 April, 2020
No Comments on Daily Crypto Review, Apr 30 – Bitcoin +17% moves above $9,000, Altcoins follow as bullish Sentiment Prevails

The cryptocurrency market had a fantastic day as most cryptocurrencies recorded daily gains of over 5%, some even reaching the double-digit gain levels. This move was led by Bitcoin reaching and surpassing $9,000. Bitcoin is currently trading for $9,201, which represents an increase of 17.21% on the day. Meanwhile, Ethereum gained 11.9% on the day, while XRP gained 7.9%.

The cryptocurrency market had an incredible day as most cryptocurrencies recorded daily gains of over 5%, some even reaching the double-digit gain levels. This move was led by Bitcoin reaching and surpassing $9,000. Bitcoin is currently trading for $9,201, which represents an increase of 17.21% on the day. Meanwhile, Ethereum gained 11.9% on the day, while XRP gained 7.9%.

Streamr DATAcoin took the position of today’s most prominent daily gainer, with gains of 60.65%. Aave lost 2.18% on the day, making it the most prominent daily loser.

Bitcoin’s dominance soared compared to yesterday’s dominance levels. Its value is now 65.19%, which represents a 1.29% difference to the upside.

The cryptocurrency market capitalization increased significantly when compared to yesterday, with its current value being $250.8. This value represents an increase of $25.92 billion when compared to the value it had yesterday.

Honorable mention

Coinbase and Binance amid Crypto Surge

Bitcoin’s price jump April 29 brought a few interesting things about certain exchanges to light. Binance, the world’s largest crypto exchange at the moment, has hit $11 billion in trading volume just for the past 24 hours, therefore reaching an all-time high. The last time the exchange even came near $11 billion was back in early 2018.

Unlike Binance’s thriving volume, Coinbase has experienced several major outages that stopped trading. Their status page, website, mobile app, as well as API website, experienced the outages.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap explosively bounced to the upside, breaking the ascending trend. The price quickly rose from $7,750 levels all the way up to $8,980, where it was stopped. However, the newest push by the bulls brought the price above the $8,980 resistance level as well as the $9,120 level. The move was stopped by the $9,250 resistance level.

BTC’s volume increased greatly, while its RSI level stepped deep into the overbought territory on all time frames. Its current value on the 4-hour time frame is 90.

Key levels to the upside Key levels to the downside

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

2: $9,735 2: $8,980

3: $9,870 3: $8,820

Ethereum

Ethereum followed Bitcoin’s bullish pattern and gained quite of bit of value in the past 24 hours. The second-largest cryptocurrency by market cap passed the $198 level and soared towards the $217 level, where it got stopped by a large number of sellers. However, the most recent bullish move brought the price above $217. The move reached exhaustion at the $225.5 resistance level, where the price started descending.

Ethereum’s volume almost doubled today, while its RSI level reached 82.5 on the 4-hour chart.

Key levels to the upside Key levels to the downside

1: $225.5 1: $217.6

2: $240 2: $198

3: $193.6

Ripple

XRP also broke out of its usual pattern and soared, reaching the price level of $0.235. The third-largest cryptocurrency broke the $0.227 after some consolidation and testing of the resistance level. The price is now trying to find a place to consolidate at as well as to test the $0.227 support level.

XRP’s volume skyrocketed, while its RSI level reached the value of 85. The key level of $0.227 will remain on the “upside” side until XRP resolves its price uncertainty.

Key levels to the upside Key levels to the downside

1: $0.235 1: $0.227

2: $0.285 2: $0.205

3: $0.296 3: $0.2

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

Forex Course

108. What Are Corrective Waves & How To Comprehend Them?

Post author By Reddy Shyam Shankar
Post date 29 April, 2020
No Comments on 108. What Are Corrective Waves & How To Comprehend Them?

Introduction

In the last lesson, we discussed the impulsive waves and 5-wave pattern corresponding to it. A trend is made up of the combination of the 5-wave pattern and the 3-wave pattern. The 5-wave impulsive pattern moves along the original trend, while the 3-wave corrective pattern moves against the trend. In this lesson, we shall discuss the corrective wave and then interpret the 5-3 waves.

Corrective waves

In case of an uptrend, the impulsive waves are towards the upside, and the corrective waves are towards the downside. Continuing with the example mentioned in the previous lesson, the corrective waves are represented in the below figure.

In the above figure, waves a, b, and c represent the corrective waves. The overall trend of the market is up, but corrective waves are against it. In other terms, the 3-wave corrective wave can be considered as pullback for the uptrend.

Note: The 3-wave corrective wave is also referred to as the ABC corrective wave pattern.

Reverse Corrective Wave Pattern

The Elliot wave theory is applicable to both uptrend and downtrend. So, for a downtrend, the impulsive wave faces downwards following the overall trend, while the corrective wave faces upwards. Below is a figure representing the 5-3 wave pattern for a downtrend.

Types of Corrective Wave Patterns

The above illustrated corrective wave is not the only type of corrective wave that occurs. According to Elliot, there are twenty-one 3-wave corrective wave patterns, where some are simple and some complex. However, a trader need not memorize all of them at once. The following are three simple corrective waves that are most occurring in the market.

The Zig-Zag Formation

The zig-zag formations are very steep compared to the regular one and are against the predominant trend. In the three waves, typically, wave B is the shortest compared to wave A and wave C. Note that, the Zig-Zag pattern can happen twice or thrice. Also, the zig-zag patterns, like all other waves, can be broken into 5-wave patterns.

The Flat Formation

As the name suggests, in flat corrective wave patterns, the 3-wave pattern is in the sideways direction. That is, the wave C does not go below wave B, and wave B makes a high as much as wave A. Sometimes, the wave B goes higher than wave A which is acceptable as well.

The Triangle Formation

The Triangle formation is a little different from the other corrective patterns. The difference is that these patterns are made up of 5-waves that move against the overall trend. These corrective waves can be symmetrical, ascending, descending, or expanding.

These were some of the most used corrective patterns used by traders. These must be known to technical traders by default. In the next lesson, we shall discuss another important concept related to the Elliot Wave theory.

[wp_quiz id=”71613″]

Tags Corrective Waves, Downtrend, Elliot wave, Elliot Wave Theory, Forex, Impulsive waves, Technical Analysis, Technical Trading, trading, Uptrend, Waves

Forex Market Analysis

Daily F.X. Analysis, April 29 – Top Trade Setups In Forex – Eyes on FOMC & U.S. GDP Today!

Post author By Ali B.
Post date 29 April, 2020
No Comments on Daily F.X. Analysis, April 29 – Top Trade Setups In Forex – Eyes on FOMC & U.S. GDP Today!

On the forex front, the ICE U.S. Dollar Index slipped 0.1% on the day to 99.96 on Tuesday, as investors awaited U.S. first-quarter GDP data and the Federal Reserve’s interest rates decision due later today. The U.S. Federal Reserve will announce its interest rate decision (hold at 0.00% – 0.25% expected). The European Commission will post the Eurozone’s April Economic Confidence Index (73.1 expected).

Moreover, the European Central Bank will report the Eurozone’s M3 money supply in March (+5.5% on-year expected).

Economic Events to Watch Today

EUR/USD – Daily Analysis

Today in the early Asian session, the EUR/USD currency pair erasing yesterday’s losses and crossed above key support at 1.0809 while representing a 0.27% gains on the day mainly due to the broad-based U.S. dollar weakness in the wake of risk-on market sentiment.

The better mood in the risk market supports the shared currency. At the time of writing, the EUR/USD currency pair is currently trading at 1.0847 and consolidates in the range between the 1.0818 – 1.0855. However, the traders are cautious about placing nay strong position ahead of the all-important Federal Reserve (Fed) rate decision.

The greenback dropped to multi-week lows against the JPY currency and faced notable declines against the Aussie dollar and the New Zealand dollar mainly due to the better sentiments in the risk market. However, the reason behind the renewed risk-on market sentiment could be the lack of negative updates related to coronavirus. The slight stability in the oil market also keeps the market calm.

Later today, the U.S. Federal Reserve will announce its interest rate decision (hold at 0.00% – 0.25% expected). The U.S. Commerce Department will post 1Q annualized GDP (-4.0% on quarter). The National Association of Realtors will publish pending home sales for March (-13.6% on month expected).

Daily Support and Resistance

S1 1.0682
S2 1.0761
S3 1.0792

Pivot Point 1.084

R1 1.087
R2 1.0919
R3 1.0998

EUR/USD– Trading Tips

The EUR/USD is trading bullish at 1.0868 as the U.S. dollar seems to face bearish pressure ahead of Fed fund rate decision. On the higher side, the EUR/USD has the potential to go after 1.0882, and bullish breakout of this level may drive EUR/USD prices further higher until the next resistance level of 1.0960. The overall trading bias continues to be bullish, especially after the bullish crossover of 50 EMA and MACD. Both of the leading indicators are supporting bullish trend with immediate support around 1.0814. We should consider taking buying trades above 1.0840 today.

GBP/USD – Daily Analysis

During Wednesday’s Asian session, the GBP/USD currency pair flashing green and taking bids near the 1.2475 while representing 0.40% gains on the day mainly due to broad-based U.S. dollar fresh weakness in the wake of renewed risk-on sentiment in the market. The currency pair erased Tuesday’s losses, which were caused by doubt regarding the U.K. government’s coronavirus (COVID-19) figures.

Currently, the GBP/USD is trading at 1.2475 and consolidates in the range between the 1.2423 – 1.2486. However, the pre-FOMC and US GDP sentiments are boosting the currency pair’s strength.

On Tuesday, the official death toll of 552 shows further flattening of the virus curve in the U.K., while the update from the Office of National Statistics (ONS) indicates that the actual death toll in England to April 17 was 54% higher than the government released data report.

On the other hand, the U.S. dollar hit the multi-week lows against the JPY currency and suffered notable declines against the Aussie dollar and the New Zealand dollar mainly due to lack of its demand ahead of FOMC and U.S. GDP. The Dollar index’s (DXY) climbed from the 13-day low of 99.45 reached during Tuesday’s American trading hours ran out of steam near 99.90 early Wednesday, as the S&P 500 futures and Asian stocks rose, as in result greenback is losing its haven demand.

At the Brexit front, the report came that the discussions between the European Union (E.U.) and the U.K. regarding new trade arrangements from next year continue to postponed mainly due to disagreements and the coronavirus crisis. Besides this, the U.K.’s international trade secretary Liz Truss said that the E.U. is expected to stick under pressure and agree to a post-Brexit trade deal with the U.K.

Daily Support and Resistance

S1 1.2315
S2 1.2371
S3 1.24

Pivot Point 1.2427

R1 1.2456
R2 1.2483
R3 1.2539

GBP/USD– Trading Tip

The GBP/USD is exhibiting bullish bias around 1.2449 area, as it’s maintaining a fresh trading range of 1.2525 – 1.2396. On the 4 hour chart, the cable has also formed a bullish channel, which is supporting it around 1.2396 along with resistance around 1.2501. On the higher side, a bullish breakout of 1.2520 opens up further room for buying until 1.2560 and 1.2626 level.

The GBP/USD pair is holding a buying zone, above 50 EMA, which is also supporting the cable around 1.2409. Since the MACD is holding above 0, we should look for buying trades in the GBP/USD pair. Let’s look for buying trades above 1.2410 and bearish trades below 1.2520 level today.

USD/JPY – Daily Analysis

During the Asian session, the USD/JPY currency pair extended its 6-day losing streak and dropped to 106.41 while representing 41% declines on the day mainly due to broad-based U.S. dollar weakness in the wake of the risk-on market sentiment. However, the currency pair failed to cheer Japanese yen weakness and dropped to 6-weeks low. As of writing, the USD/JPY currency pair is currently trading at 106.44 and consolidates in the range between the 106.39 – 106.89.

Whereas, the safe-haven demand for the U.S. dollar continues to lose due to the better mood in the equity market as hopes of re-opening of the economies in Australia, New Zealand, and parts of Europe boosting the market sentiment. Moreover, the dismal U.S. C.B. Consumer Confidence data, as well as the hopes of sharp U.S. economic contraction, keeps the U.S. dollar under pressure.

The reason behind the risk-on market sentiment could also be the upbeat comments from the BOJ Governor. The Bank of Japan (BOJ) Governor Haruhiko Kuroda said on Tuesday that Japan’s financial system remains firm because a whole as bank groups have satisfactory capital buffers.

Daily Support and Resistance

R3 108.1
R2 107.72
R1 107.3

Pivot Point 106.93

S1 106.51
S2 106.14
S3 105.72

USD/JPY – Trading Tips

On the technical front, the USD/JPY was facing solid support around 107, the round figure, but it got violated over increased demand for safe-haven yen. At the moment, the USD/JPY is facing strong resistance around 107, along with support at 106.500, but this support seems weaker, and we may see USD/JPY prices falling further until 106.240 later today. Looking at the leading indicators on the 4-hour timeframe, we may see USD/JPY prices are holding below 50 periods EMA, and at the same time, the MACD is also holding into a negative zone. Let’s look for selling trades below 106.800 today.

All the best for today!

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

Crypto Market Analysis

Daily Crypto Review, Apr 29 – Small Bitcoin addresses skyrocketing; XRP exploding to the upside

Post author By Ilija Rankovic
Post date 29 April, 2020
No Comments on Daily Crypto Review, Apr 29 – Small Bitcoin addresses skyrocketing; XRP exploding to the upside

The cryptocurrency market continued its past moves by slowly going towards the upside. Bitcoin is currently trading for $7,809, which represents an increase of 1.48% on the day. Meanwhile, Ethereum gained 2.74% on the day, while XRP gained 10.32%.

Aave took the position of today’s most prominent daily gainer, with gains of 25.55%. Hive lost 20.55% on the day, making it the most prominent daily loser.

Bitcoin’s dominance increased slightly compared to yesterday’s dominance levels. Its value is now 63.90%, which represents a 0.53% difference to the upside.

The cryptocurrency market capitalization pretty much stayed at the same place when compared to yesterday, with its current value being $224.88. This value represents an increase of $2.38 billion when compared to the value it had yesterday.

Honorable mention

Bitcoin network addresses reaching all-time highs

Glassnode’s data shows that the number of network addresses that hold at least 0.1 BTC continued growing throughout time, signifying a great increase in interest for Bitcoin. The numbers keep going up, passing 3,010,784 on Monday.

The number of addresses began to increase drastically around mid-February.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap continued its slow move towards the upside along the ascending channel. Yesterday’s consolidation tested the downside of this channel, which kept up nicely and propelled the price up. In the meantime, Bitcoin passed the $7,750 resistance level and continued to move up.

BTC’s volume stayed steady over the course of the day, while its RSI level is currently dangerously close to the overbought area on the 4-hour time frame.

Key levels to the upside Key levels to the downside

1: $8,000 1: $7,750

2: $8,650 2: $7,420

3: $8,820 3: $7,085

Ethereum

Ethereum was stuck within a range bound by $193.6 to the downside and $198 to the upside for the majority of the day. However, the past couple of hours brought additional bull support, and Ethereum is now breaking this level. The price is currently above $198, but it will take some more time and testing to confirm the level breaking.

Ethereum’s volume was on the same level as it was the previous couple of days, while its RSI level started increasing. It is currently at a value of 62.5.

Key levels to the upside Key levels to the downside

1: $198 1: $193.6

2: $217 2: $185

3: $178.6

Ripple

XRP had a massive uptick that brought its price from $0.1965 all the way up to $0.2185. The move was accompanied by massive volume. This uptick broke through $0.2 as well as $0.205 resistance levels, stopping above (and retesting) the $0.214 level, which wasn’t really acknowledged since early March 2020.

XRP’s massive price increase brought its RSI level to overbought levels on every single time-frame. Its value on the 4-hour time-frame is currently sitting at 78.5. The $0.214 level will not be included in the “key level” section yet due to the uncertainty of it maintaining relevance.

Key levels to the upside Key levels to the downside

1: $0.227 1: $0.205

2: $0.285 2: $0.2

3: $0.296 3: $0.10

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

Forex Course

107. Comprehending The Impulsive Waves In Elliot Wave Theory

Post author By Reddy Shyam Shankar
Post date 28 April, 2020
No Comments on 107. Comprehending The Impulsive Waves In Elliot Wave Theory

Introduction

In the previous lesson, we got started with understanding the fundamentals of the Elliot Wave theory. An introduction to impulsive waves and corrective waves was also discussed. This lesson shall go over the concept of impulsive waves.

There are two types of waves in the Elliot theory, impulsive and corrective. And as a whole, Elliot stated that a trending markets move in 5-3 wave patterns. The 5-wave pattern corresponds to the impulsive wave, and a 3-wave pattern corresponds to the corrective wave. And the combination of the 5-wave and 3-wave patterns form a trend.

Formation of Impulsive Wave

The impulsive waves are formed by five waves numbered from 1 through 5. Wave numbers 1, 3, and 5 are motive, i.e., they are the waves that go along the overall trend, while wave numbers 2 and 4 are corrective waves that go against the overall trend. Below is a diagram that represents the 5-wave impulsive pattern.

This is the impulsive wave that is formed in all types of instruments. It claimed that this wave patterns form not only in stocks but on currencies, bonds, gold, oil, etc. as well. Now, let’s interpret each wave in the impulsive wave pattern.

🌊 Wave 1 – This is the first up move in the market. This is typically caused by a handful number of people who think that the currency is at a discounted rate and is the right time to buy.

🌊 Wave 2 – This move is against the previous move. There is a dip in the market as the initial buyers are booking profits, thinking it is now overvalued. However, it does not go down until the previous lows because it is also considered to be at a discount for other traders.

🌊 Wave 3 – Wave 3 resembles the wave 1. This wave is usually the longest and the strongest in terms of momentum. This is because, as the price goes higher and higher, the mass public begins to buy along with the institutional players. Hence, it is stronger than wave 1.

🌊 Wave 4 – After a strong up move (wave 3), some traders start to book profit, assuming the security has become expensive. However, this down-move is not quite strong because there are traders who still believe in the bullishness and hence see this as a discounted price.

🌊 Wave 5 – Wave 5 is when most people start to buy security. This is solely due to panic and is considered to a rat trap. Wave 5 is when the security has reached the news. All traders and investors on the news channels advice the public to buy.

But, in reality, this is when the security is considered to be overpriced. The big investors and institutions begin to short and square off their positions. And the liquidity for it is provided by the mass public.

All these waves together form the 5-wave impulsive pattern. We hope you were able to comprehend this concept of impulsive waves. If not, shoot your questions in the comment section below, and don’t forget to take the below quiz.

[wp_quiz id=”71436″]

Tags 5-wave impulsive pattern, Education, elliot, Elliot wave, Elliot Wave Theory, elliot waves, Forex, Forex Course, Impulsive waves, Technical Analysis

Forex Elliott Wave

Alternation and Extensions in the Wave Analysis – Advanced Level

Post author By Eduardo Vargas
Post date 28 April, 2020
1 Comment on Alternation and Extensions in the Wave Analysis – Advanced Level

Introduction

In previous articles, we discussed the concepts of alternation and extensions and their importance in wave analysis.

R.N. Elliott, in his work “The Wave Principle,” described alternation as a principle of nature. Likewise, since financial markets are the result of human activity, and consequently part of nature, they are governed by the “law of nature.”

Elliott also identified the existence of extensions as part of impulsive movements. In particular, in his Treatise, Elliott points out that extensions should appear only on one of the three motive waves and never on more than one.

In this educational article, we will review and expand on the concepts of Alternation and Extensions applied in wave analysis.

Alternation

As we have seen in previous articles, alternation can be recognized in different forms, which are detailed as follows:

Price, which corresponds to vertical advance, either increasing or decreasing.
Time, which corresponds to the time taken by the construction of each wave.
Severity, which is the ratio of the wave to the impulsive pattern, this aspect applies only to corrective waves 2 and 4.
Complexity, which refers to the number of subdivisions that the Elliott pattern has in development.
Construction, an Elliott wave pattern, can be a flat, zigzag, triangle, etc.

So far, we have studied the characteristics of alternation in the first three aspects.

In impulsive structures, they can alternate in terms of time and price. However, in corrective structures, alternation in terms of price is usually not relevant.

However, on alternation in time, in particular, one must verify the time taken by each phase of the corrective pattern, which in general will be very different from each other. Likewise, in terms of severity, if a corrective wave produces a deep retrace to the previous impulsive wave, likely, the next corrective wave will not show a deep retrace and vice versa.

The next aspect that corresponds to the alternation principle is complexity or intricacy, which refers to the number of internal subdivisions that have an Elliott wave pattern, compared to the number of subdivisions that have the adjacent structure.

In practical terms, it will be useful for the analysis of poly-waves and multi-waves. In this way, it will be helpful for one wave to be subdivided and the other not.

The following figure shows cases for impulsive and corrective structures.

The alternation in terms of construction corresponds to the patterns that compose an impulsive or corrective structure.

For example, in a corrective sequence in which the first movement is composed of a zigzag pattern, the next corrective move can be any structure, minus a zigzag.

In this context, in the real market, a typical sequence is first the appearance of a zigzag and then a movement corresponding to a flat pattern, as shown in the following figure. Likewise, if the price action develops an impulsive structure, the next movement will correspond to a corrective structure of the same degree.

Extensions

Usually, in wave analysis, the extension and subdivision concepts tend to be used interchangeably. However, Glenn Neely, in his work “Mastering Elliott Wave,” shows that both terms are independent.

On the one hand, the extension corresponds to the wave with the longest movement in favor of the trend. As we have seen in previous articles, the extended wave appears in a single wave, and this may be in the first, third, or fifth wave, but it will never be present in more than one simultaneously.

On the other hand, the term subdivision applies to the number of segments constituting a wave, which can be impulsive or corrective.

Thus, the extended wave will not necessarily be the one with the most subdivisions. Likewise, as the complexity of the wave under study increases, the level of subdivisions that constitute it will also increase.

Finally, as indicated by R.N. Elliott in his Treatise, the extended wave is a relevant factor in terms of the behavior of an impulsive wave, either by what the most complex corrective wave will be. It can also lead the wave analyst to avoid losses and obtain gains from its knowledge.

When the first wave is extended, the structural sequence has a wedge shape. In this series of waves, the ends of waves 1 and 3 and waves 2 and 4 are joined. Usually, the fifth wave will end up under the higher guideline. The structure shall be complete when the price action violates the lower guideline joining waves 2 and 4.

When the third wave is the extended one, the fourth wave should not retrace beyond 38.2% of the third wave advance. If the retrace extends beyond 38.2%, this would be indicative of a weakness in impulsive movement, and consequently, the fifth wave should not reach a new high.

Finally, when the fifth wave is the most widespread, waves 1 and 3 may be similar, the third wave being slightly longer than the first and the fourth wave the most complex corrective wave compared to the second wave. The fifth wave will have the appearance of a false rupture of the directive that joins waves 1 and 3.

Conclusions

In this educational article, we have seen the importance of the principle of alternation in wave analysis, which can provide valuable information in the study of price action.

Also, knowledge of the alternation principle can help the wave analyst to identify which wave will be extended. In particular, when the analysts look to incorporate to the trend when it is in progress.

In the next educational article, we will study the process of wave counting and counting.