Tag: Technical Analysis

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 29 – Bitcoin’s Fail to Break $11,000 Causes a Red Day for Crypto: What’s Next?

The cryptocurrency sector has lost some value as Bitcoin failed to break $11,000. Bitcoin is currently trading for $10,660, representing a decrease of 1.68% on the day. Meanwhile, Ethereum lost 1% on the day, while XRP gained 0.76%.

The cryptocurrency sector has lost some value as Bitcoin failed to break $11,000. Bitcoin is currently trading for $10,660, representing a decrease of 1.68% on the day. Meanwhile, Ethereum lost 1% on the day, while XRP gained 0.76%.

The cryptocurrency sector has lost some value as Bitcoin failed to break $11,000. Bitcoin is currently trading for $10,660, representing a decrease of 1.68% on the day. Meanwhile, Ethereum lost 1% on the day, while XRP gained 0.76%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies and their gains and losses, OMG Network gained 27% on the day, making it the most prominent daily gainer. ABBC Coin (18.7%) and Storj (16.95%) also did great. On the other hand, DeFi projects took a hit as Uniswap lost 16.2%, making it the most prominent daily loser. It is followed by DFI. Money’s loss of 13.47% and Ocean Protocol’s loss of 12.4%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s level of market dominance decreased slightly since our last report, with its value currently being at 60.46%. This value represents a 0.29% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has lost in value over the course of the past 24 hours. Its current value is $343.89 billion, which represents a decrease of $5.5billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin failed to end the day above the large triangle formation (and the 38.2 Fib retracement level), which caused its price to push back inside the body of the triangle. The move towards the upside exhausted the buyers as they couldn’t get past the 50-day moving average as well as the Fib retracement level.

BTC/USD 1-day Chart

If we zoom in to the 4-hour chart, we can clearly see that this was a fakeout that exhausted the buy-side even further. While it is unknown where Bitcoin’s next move will be, traders should look at the triangle and check for where BTC exits it.

BTC/USD 4-hour Chart

Bitcoin’s short-term technicals have changed its position from a “buy” to a “sell.” When comparing the technicals, we can see that the longer time frame we pick, the more bullish the Bitcoin overview is.

BTC/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • Price is slightly below its 50-period EMA and below its 21-period EMA
  • Price is below its middle Bollinger band
  • RSI is neutral (47.23)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $10,850                                 1: $10,630

2: $11,000                                 2: $10,500

3: $11,090                                  3: $10,015

Ethereum

Ethereum has been in a state of constant price growth since Sept 24, with the price posting higher and highs as well as higher lows. This time, while the movement towards the downside was a bit sharper than usual, Ethereum has still posted a higher low, indicating it’s not as bullish as many people think. However, this move towards the downside stopped Ethereum from moving above the dreaded $360 resistance level, once again fulfilling the words of the majority of Options traders, which called for ETH trading between $340 and $360 until the end of October.

ETH/USD 4-hour Chart

While Ethereum’s 4-hour and 1-day technicals turned slightly more bearish and are tilted towards the sell-side, its longer-term overview is extremely bullish. When talking about weekly or monthly technicals, the sentiment is heavily tilted towards the buy-side.

ETH/USD 4-hour Technicals

Technical Factors (4-hour Chart):
  • The price is at its 50-period and its 21-period EMA
  • The price is at its middle Bollinger band
  • RSI is neutral (51.26)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $360                                     1: $340

2: $371                                     2: $300

3: $400                                      3: $289

Ripple

Not much has happened for XRP in the past 24 hours regarding price movement. The $0.2454 level stopped out any push from the bull-side, making XRP stagnant just below this resistance level. However, this made it almost clear that the 5th leg of the Elliot impulse wave did end with XRP’s move towards $0.219 (the circled candles). We can expect XRP to trader between the $0.235 support level and $0.2454 resistance level for some time.

XRP/USD 4-hour Chart

Ever since XRP left the Elliot wave pattern behind it, its short-term overview has turned bullish. However, its overview changes to bearish and then extremely bearish the longer we go in time (daily, weekly, monthly overview).

XRP/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • The price is above both its 50-period EMA and its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (55.23)
  • Volume is stable and average
Key levels to the upside          Key levels to the downside

1: $0.2454                                 1: $0.235 

2: $0.266                                   2: $0.227

3: $0.27                                    3: $0.221

 

Categories
Forex Market Analysis

Dow Jones Moves Under Bearish Signals

Overview

Overview

Overview

The Dow Jones Industrial Average is developing a descending sequence that could drive the price to new lower lows. This bearish context occurs in the middle of the US presidential elections campaign, which will take place on November 03rd.

Market Sentiment Overview

The United States benchmark, led by the Dow Jones index, appears to be preparing for the presidential elections on November 3.

The short-term market sentiment exposed in the following 8-hour chart illustrates the price shift below the 200-day weighted moving average, which has turned from support to the next short-term resistance to struggle with.

On the other hand, we observe the 90-day high and low range, where the Industrial Average Index has found support in the neutral zone at over the 26,700 pts, where it bounced, being traded slightly bullish during the last Friday 25th session. This context, added to the shifting movement of the price and against its 200-day moving average, leads us to suspect that the Dow Jones Index could see a further drop within the next few sessions.

Concerning the volatility associated with the Industrial Average, expressed by the Dow Jones Volatility Index (VXD) on its daily chart, we distinguish that the action consolidates above the 60-day moving average. Likewise, VXD shows an increasing sequence of short-term lows, which provides a chance of a new bullish movement of the VXD in the short term.

In consequence, the market context leads us to expect a potential bearish movement for the Industrial Average. However, this scenario still needs to be confirmed by the price action.

Technical Analysis Outlook

From a technical analysis perspective, the Dow Jones Index in its 4-hour chart is showing a descending sequence that began once the price found resistance at 29,193.6 pts on September 03rd. Once the Industrial Average found fresh sellers, the downward pressure drove the price to a retracement till the 26,541 level, where the leading US benchmark found support and began to bounce back to the current trading levels.

On the other hand, in the previous figure, we distinguish the progress of a head and shoulders pattern, which has its neckline at the level of 27,457.5. The bearish breakdown developed during the September 21st trading session, and its subsequent pullback confirmed the bearish signal in the Industrial Average. In this regard, according to the head and shoulder pattern definition, this trend reversal formation has a pending bearish target located at 25,724 pts.

Similarly, if the price confirms a new lower high under the previous peak at 28,370.8 pts, it would confirm a bearish continuation pattern identified as three descending peaks, which would support the bearish scenario for Dow Jones.

In conclusion, our short-term perspective is mainly bearish as long as the price remains below 28,370.8 pts, with a bearish target established at 25,724 pts. The invalidation of our bearish scenario will occur if the Industrial Average consolidates above 28,370.8 pts.

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 28 – Top Trade Setups In Forex – ECB President Lagarde Speaks

The Asian session has exhibited thin trading volume and volatility amid Chinese banks will be closed in observance of the Mid-Autumn Festival. However, the eyes will remain on the ECB President Lagarde Speak later during the European session.

The Asian session has exhibited thin trading volume and volatility amid Chinese banks will be closed in observance of the Mid-Autumn Festival. However, the eyes will remain on the ECB President Lagarde Speak later during the European session.

The Asian session has exhibited thin trading volume and volatility amid Chinese banks will be closed in observance of the Mid-Autumn Festival. However, the eyes will remain on the ECB President Lagarde Speak later during the European session.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.16299 after placing a high of 1.16848 and a low of 1.16120. Overall the movement of the EUR/USD pair remained bearish throughout the day. The pair dropped to its 2-months lowest level below 1.16200 level on Friday as the risk-sentiment was dropped in the market, and the U.S. dollar gained renewed strength. The strength of the greenback was the main driver of the EUR/USD pair on Friday.

The greenback posted the biggest weekly gain on Friday since March and rose to 2-months high level after the safe-haven momentum rose amid the weak economic data. The safe-haven appeal was also supported by the ongoing worries about the economic fallout from a delayed U.S. stimulus measure.

On Friday, the U.S. Dollar Index rose to its 2-months highest level above 96.6 level and weighed heavily on the EUR/USD pair. The M3 Money Supply from the E.U. dropped to 9.5% from the projected 10.0% at 13:00 GMT on the data front. Private Loans from the European Union remained flat with expectations of 3.0%. The depressing data from the E.U. added further losses in the EUR/USD pair.

From the U.S. side, the Core Durable Goods Orders in August dropped to 0.4% against the projected 1.0%, and the Durable Goods Orders also declined to 0.4% from the anticipated 1.1% and weighed on the greenback. The declining goods orders raised concerns for the economic recovery and raised the safe-haven appeal that ultimately supported the greenback. The strong U.S. dollar added further in the downward momentum of the EUR/USD pair. On the coronavirus front, the second wave of the pandemic in Europe was hitting the European countries hard as the number of coronavirus infections increased day by day. The daily count of infected people rose to an all-time high in France and the U.K. on Thursday. 

France recorded 16,096 new cases in a single day, and the U.K. reported 6634 cases in 24 hours. Meanwhile, other countries also saw the highest number of infected cases since the pandemic started earlier this year. 

The European Union health commissioner said that coronavirus’s situation was even worse in some member states than during the peak in March, and this weighed heavily on the local currency Euro. The declining Euro currency supported the downward momentum of the EUR/USD pair on Friday.

The rising safe-haven market sentiment kept the EUR/USD pair under heavy pressure due to its riskier nature. The U.S. dollar regained its safe-haven status and was further supported by the uncertainty in the market related to the rising number of coronavirus cases and the rising tensions between the U.S. & China that could also lead to a new cold war. The strength of the greenback kept the pair EUR/USD under pressure throughout the whole week.

Daily Technical Levels

Support Resistance

1.1636       1.1698

1.1600       1.1724

1.1573       1.1760

Pivot point: 1.1662

EUR/USD– Trading Tip

The bearish bias of the EUR/USD continues to dominate the market as it’s providing selling bias at 1.1650. Staying below 1.1650 level can extend the selling trend until 1.1590 level while resistance stays at the 1.1680 level today. A bullish breakout of the 1.1686 level can drive the buying trend until the 1.1760 level. Mixed bias prevails in the market today. The ECB President Lagarde Speech will remain in highlights today.

GBP/USD – Daily Analysis

The GBP/USD currency pair extended its early-day bullish bias and took some further bids around well above the mid-1.2750 level despite the U.K. preparing to impose a total social lockdown across much of Northern Britain and potentially London. However, the reason for the bullish trend in the currency pair could be associated with the bearish sentiment surrounding the broad-based U.S. dollar ahead of the U.S. presidential debate on Tuesday and the release of U.S. economic data. 

Adding to the U.S. dollar’s problem could also be the market risk-on sentiment, which tends to undermine the safe-haven U.S. dollar and contributed to the currency pair gains. Apart from this, the bullish tone around the currency pair was further bolstered by the latest positive report suggesting brighter odds of success for the key Brexit talks. On the contrary, the latest fears of strict lockdown conditions in the U.K. hampering global economic growth seem to challenge the currency pair bulls and become the key factor that kept the lid on any additional currency gains pair. At this particular time, the GBP/USD currency pair is currently trading at 1.2776 and consolidating in the range between 1.2752 – 1.2778. Moving on, the currency pair traders seem cautious to place any strong position ahead of the U.S. presidential debate on Tuesday and the release of U.S. economic data later in the week.

The market trading sentiment rather unaffected by the fears of rising COVID-19 cases in the UK, Spain, and some of the notable Asian nations like India, which keeps fueling worries that the economic recovery could be halt. However, the market trading sentiment has been reporting gains since the Asian session started, possibly due to the latest headlines suggesting a strong immune response to the coronavirus vaccine with a single dose in the early trial stages. Besides this, the market sentiment was further bolstered by the hopes of the U.S. stimulus to combat the coronavirus (COVID-19). Apart from this, the Brexit optimism also exerted a positive impact on market sentiment. 

This, in turn, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day ahead of the U.S. presidential debate on Tuesday and the release of U.S. economic data later in the week. Besides, the upbeat market sentiment also keeps the USD bulls on the defensive. However, the losses in that U.S. dollar kept the GBP/USD currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies edged down by 0.04% to 94.588 by 10 PM ET (2 AM GMT). 

At home, the Confederation of British Industry (CBI) head Carolyn Fairbairn showed some readiness about the Brexit trade deal ahead of the 9th-phase of talks starting from Tuesday. Also on the positive side is the Internal Market Bill (IMB) has ripped off the latest round of Brexit talks. This, in turn, underpinned the British Pound and extended some support to the currency pair. 

On the contrary, the Irish leader Taoiseach Micheál Martin’s latest statement that the U.K. headed for no-deal Brexit eventually fueled the worries of losing a trade deal and becoming the key factor that cap further gains in the currency pair. It is worth reporting that the cost of losing a trade deal is estimated as near 1.0 million British jobs, as per the Financial Times. Meanwhile, the further burden on the economy that is yet to overcome the COVID-19 woes seems to push the BOE policymakers to defend the negative rate policies.

Across the ocean, the U.K. policymakers are ready to a strict ban on socializing due to the recent surge in the coronavirus (COVID-19) cases, which also keeps challenging the currency pair upside momentum. The re[orts also revealed that the new lockdown measures put forward a complete closure for all pubs, restaurants, and bars for two weeks initially. Looking ahead, the market traders will keep their eyes on headlines concerning Brexit, pandemic, and U.S. Presidential Election, which may offer important clues. Meanwhile, the USD price dynamics will be key to watch. 

Daily Technical Levels

Support Resistance

1.2698       1.2791

1.2647       1.2833

1.2605       1.2884

Pivot point: 1.2740

GBP/USD– Trading Tip

The cable is consolidating in a sideways trading range of 1.2770 to 1.2725 level, as it has formed an ascending triangle pattern on the hourly timeframe. A bullish breakout of 1.2770 level can lead the Sterling price towards 1.2819 level on the higher side. Bullish bias will be more substantial over the 1.2770 level and bearish below the same level today.

 

USD/JPY – Daily Analysis

The USD/JPY currency pair extended it’s early-day losing momentum and picked up further offers around 105.30 level mainly due to the broadly weaker U.S. dollar. That was triggered by traders’ cautious mood ahead of Tuesday’s U.S. presidential election debate between President Donald Trump and Democratic candidate Joe Biden. Apart from this, the upticks in the U.S. stock futures, which refer to market risk-on sentiment, also undermined the safe-haven U.S. dollar. This, in turn, kept the currency pair under pressure. The reason for the currency pair losses could be associated with the stronger Japanese yen across the pond. Despite the upbeat tone in the Japanese stocks, the Japanese yen remains in demand across the board, which keeps the currency pair down. 

On the contrary, the upbeat market mood, backed by the recently positive coronavirus (COVID-19) vaccine news and stimulus hopes, tends to undermine the safe-haven Japanese yen, which might help the currency pair to limit its deeper losses. Meanwhile, the latest Japanese Chief Cabinet Secretary Kato’s latest report that the government will not hesitate to deploy additional economic measures could also be considered one of the key factors that kept the lid on any additional losses in the currency pair. 

Despite the rise in the COVID-19 cases, coupled with the expected return of lockdown conditions in major economies, the market trading sentiment started to flash green during the Monday’s Asian session amid hopes of the American stimulus, which keeps the broad-based U.S. dollar under pressure. Moreover, the cautious mood of traders ahead of Tuesday’s U.S. presidential election debate between President Donald Trump and Democratic candidate Joe Biden also kept the U.S. dollar bulls on the defensive. 

The broad-based U.S. dollar failed to keep its early-day gains and edged lower before the European trading hours due to the risk-on market sentiment. Moreover, the U.S. dollar losses could also be associated with lingering doubts about the U.S. economic recovery ahead of plenty of economic data and political developments in the United States. However, the losses in the U.S. dollar kept the USD/JPY currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies edged down by 0.04% to 94.588 by 10 PM ET (2 AM GMT). 

However, the market trading sentiment was supported by the hopes of the U.S. stimulus to combat the coronavirus (COVID-19). As per the latest report, the U.S. House Speaker Nancy Pelosi thinks that the COVID-19 aid package deal is possible while considering the Democratic preparation for a new package. Besides this, the New York Times alleged U.S. President Donald Trump over income tax returns of $750 for 2016 and 2017, which initially left the negative impact on the government. Afterward, the Democratic leader proved it as “fake news” while showing strong belief to have tremendous victory in the election. 

Across the pond, the reason for the upbeat market mood could also be associated with the latest reports suggesting that the Confederation of British Industry (CBI) head Carolyn Fairbairn is confident about the Brexit trade deal ahead of the 9th-round of discussions, which is scheduled to start from Tuesday.  

As in result, the S&P 500 Futures keeps its Friday’s upbeat performance of Wall Street while rising 0.36% to 3,298 as of writing. Although, the risk barometer seems to await clearer signals to extend the latest recovery.

At home, the new Japanese Chief Cabinet Secretary Kato told that the government would not hesitate to deploy additional economic measures if needed. This, in turn, undermined the Japanese yen currency and helped the currency pair limit its deeper losses. Looking ahead, the market traders will keep their eyes on headlines concerning Brexit, pandemic, and U.S. Presidential Election, which may offer important clues. Meanwhile, the USD price dynamics will be key to watch. 

Daily Technical Levels

Support Resistance

105.22       105.56

105.04       105.72

104.88       105.90

Pivot point: 105.38

  

USD/JPY – Trading Tips

The USD/JPY is consolidating with a bullish bias to trade at 105.460 level, and the series for EMA is now extending at 105.550 level. On the lower side, the support holds at 104.840 level. The MACD also supports the bullish bias amid a stronger U.S. dollar and diminished safe-haven appeal. A Bullish crossover of the 105.550 level may drive more buying until 106.258. The idea is to stay bearish below 105.470 today. Good luck! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 28 – XRP Exiting Bearish Structure and Aiming for $0.245; Bitcoin Eyeing $11,000

The cryptocurrency sector was mostly trading sideways over the weekend, with a sudden burst towards the upside in recent hours. Bitcoin is currently trading for $10,877, representing an increase of 1.14% on the day. Meanwhile, Ethereum lost 0.59% on the day, while XRP gained 0.18%.

The cryptocurrency sector was mostly trading sideways over the weekend, with a sudden burst towards the upside in recent hours. Bitcoin is currently trading for $10,877, representing an increase of 1.14% on the day. Meanwhile, Ethereum lost 0.59% on the day, while XRP gained 0.18%.

The cryptocurrency sector was mostly trading sideways over the weekend, with a sudden burst towards the upside in recent hours. Bitcoin is currently trading for $10,877, representing an increase of 1.14% on the day. Meanwhile, Ethereum lost 0.59% on the day, while XRP gained 0.18%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, Arweave gained 36.17% on the day, making it the most prominent daily gainer. Swipe (21.16%) and CyberVein (12.64%) also did great. On the other hand, ABBC Coin lost 18.37%, making it the most prominent daily loser. It is followed by DFI.Money’s loss of 10.91% and Reserve yearn.finance’s loss of 10.43%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s level of market dominance decreased slightly since our last report, with its value currently being at 60.75%. This value represents a 0.72% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased in value over the weekend. Its current value is $349.48 billion, which represents a decrease of $13.19 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the weekend preparing for a move towards the upside, which happened in recent hours. While the move did break the large triangle to the upside, it stopped at the 38.2% level, which it is now fighting for. Only a daily close above this level would mean that the bulls have taken over the market, while anything else is far less bullish.

BTC/USD 1-day Chart

If we zoom in to the 4-hour chart, we can see that the largest cryptocurrency by market cap got stopped out (for now) at the 38.2% Fib retracement level. The next couple of hours will be crucial in determining Bitcoin’s short-term future and its sentiment.

BTC/USD 4-hour Chart

Bitcoin’s short-term technicals tilted even more towards the bull side over the weekend. On the other hand, its long-term technicals are still bullish on all time-frames.

BTC/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • Price is above both its 50-period EMA and 21-period EMA
  • Price above its top Bollinger band
  • RSI is static but close to being overbought (62.31)
  • Volume is steady with a few spikes
Key levels to the upside          Key levels to the downside

1: $10,850                                 1: $10,630

2: $11,000                                 2: $10,500

3: $11,090                                  3: $10,015

Ethereum

Unlike Bitcoin, Ethereum didn’t have a strong move towards the upside, but rather kept its trading within a range, bound by $360 to the upside and $340 to the downside. As we said in our previous post, options traders bet on Ethereum having over 55% chance of staying below $360 and above $340 in the next month, with only around 20% of them betting on ETH breaking the $360 mark in October.

ETH/USD 4-hour Chart

While Ethereum’s 4-hour technicals are tilted towards the buy-side, its 1-day technicals are bearish. When talking about weekly or monthly technicals, the sentiment is tilted towards the buy-side heavily.

ETH/USD 4-hour Technicals

Technical Factors (4-hour Chart):
  • The price is above its 50-period and its 21-period EMA
  • The price ascension is stopped by its top Bollinger band
  • RSI is neutral (57.76)
  • Volume is below average
Key levels to the upside          Key levels to the downside

1: $360                                     1: $340

2: $371                                     2: $300

3: $400                                      3: $289

Ripple

XRP’s price movement has surprised traders as they expected it to push more towards the downside and continue its Elliot impulse wave 5th leg movement. However, it seems that XRP wanted to move towards the upside and pushed towards its $0.2454 resistance (unsuccessfully).

Traders are calling for two scenarios, with one being that XRP hasn’t finished its Elliot impulse wave pattern yet and that it will revisit the $0.21 lows before doing anything else. However, many traders are now saying that the impulse wave has ended with XRP reaching $0.219 instead of $0.21 and that it is now moving freely and trying to push above its resistance levels. While both sides have their reasoning, the large ascending support level (red line) is tipping the scales in favor of XRP, already ending its Elliot wave structure.

XRP/USD 1-day Chart

If we zoom in to the 4-hour chart, it’s even more apparent that the Elliot impulse wave has finished, and that XRP is now moving towards its support/resistance levels without such a strong pattern behind it.

XRP/USD 4-hour Chart

XRP’s 4-hour sentiment has turned bullish after (most likely) finishing its Elliot impulse wave pattern. Not only that, but its slightly longer time-frames are also tilted towards the buy-side, which is a healthy change when compared to last week. However, its monthly overview is still looking bearish (though not as much as before the weekend).

XRP/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • The price is above both its 50-period EMA and its 21-period EMA
  • Price is slightly below its top Bollinger band
  • RSI is neutral (59.22)
  • Volume is stable and average
Key levels to the upside          Key levels to the downside

1: $0.235                                   1: $0.227 

2: $0.2454                                 2: $0.221

3: $0.266                                  3: $0.214

 

Categories
Forex Basic Strategies

Learning To Trade The ‘Make Your Wish’ Forex Trading Strategy

Introduction

Introduction

Introduction

The ‘make your wish’ strategy is based on one of the most popular candlestick patterns, i.e., the Shooting Star. As we all are aware that it looks similar to an inverted hammer, we try to develop a strategy that gives us the ability to capture small bearish reversal in the market. This pattern can prove to be a very “dangerous” pattern if developed at the right location.

Once we comprehend the importance of shooting stars, we discover that one candle pattern has such a power that it can signal the reversal of a strong bullish trend. Very few people take the risk of trading reversal, as this type of trading has badly hurt the trading accounts of many.

Today’s strategy will address this issue and will show how we can catch a falling knife without cutting off our fingers. The ‘make your wish’ can help us spot the top of the market and how to trade it properly. As Shooting stars are believed to make our wishes come true, we have named this strategy as ‘Make Your Wish,’ hoping that the strategy makes our wish of winning come true.

Time Frame

This strategy can only be traded on very short-term price charts such as 5 minutes or 1 minute. Hence, this is a perfect, intraday trading strategy.

Indicators

We make use of just one technical indicator in this strategy, and that is the Chaikin Oscillator.

Currency Pairs

The most suitable currency pairs are EURUSD, USD/JPY, GBP/USD, AUD/USD, GBP/AUD, USD/CAD, GBP/JPY, and CAD/JPY. Minor and exotic pairs should completely be avoided.

Strategy Concept

The ‘make your wish’ strategy is a very simple and effective technique to use in the forex market. Since most traders are interested in day trading and scalping, there isn’t a better strategy to use for that. The strategy is based on the simple concept that when the market moves sharply in one direction, it needs to ‘pullback’ at some of the time that will lead to a decent retracement in the price to the next technical level. The ‘shooting star’ helps us identifying the time when retracement will start.

Here, we take advantage of this retracement and try to particulate in the short-term reversal of the market. As this can involve high risk, we cannot solely rely on a candlestick pattern and use a technical indicator to give us the extra confirmation. We use the ‘Chaikin Oscillator, ’ which is designed to anticipate directional changes in the market by measuring the momentum behind the movements. Anticipating change in direction is the first step to identifying a change in the trend. But this also isn’t enough for forecasting a reversal, which we shall in detail in the future course of the detail.

The risk-to-reward (RR) of the trades will not be high as we are trading against the trend of the market, which may not be suitable for high ‘RR’ seekers. But at the same time, the probability of success is high for trades executed using this strategy.

Trade Setup

In order to execute the strategy, we have considered the 5-minute chart of where we will be illustrating a ‘long’ trade. Here are the steps to execute the strategy.

Step 1: Firstly, we identify the trend of the market by plotting a trendline. If the price bounces off from the trendline, each time it comes close to it, we can say that the market is trending. Here we should make sure that the price is not violating the trendline multiple times. This also means that there are no deeper retracements in the trend, which is desired for the strategy. The trendline is plotted by connecting the ‘highs’ and ‘lows’ of the market.

The below image shows that GBP/AUD is in a strong uptrend.

Step 2: Next, we wait for the ‘Shooting star’ candlestick pattern to appear in the trend. Once the pattern shows up on the chart, we look at the Chaikin oscillator and make a note of its reading. When this ‘rejection’ pattern appears in an uptrend, it indicates a reversal of the trend if the Chaikin oscillator starts moving lower and slips below the ‘0’ level.

When this ‘rejection’ pattern appears in a downtrend, it indicates a reversal of the trend if the Chaikin oscillator starts moving upwards and moves from negative to positive territory. When both these criteria are fulfilled, reversal is imminent in the market. But we cannot enter the market as yet.

The below image shows how the pattern emerges on the chart along with a falling Chaikin oscillator.

Step 3: It is important to note that we enter the market soon after the appearance of the pattern. After the formation of the pattern, it is necessary to wait for a ‘lower high’ in case of an uptrend reversal and a ‘higher low’ in a downtrend reversal.

The below image shows the formation of  ‘lower high’ after the appearance of the ‘shooting star’ pattern, which is the final confirmation for entering the trade.

Step 4: Now, let us determine the stop-loss and take-profit levels for the strategy. Setting the stop-loss is pretty simple, where it is placed above the ‘lower high’ in a ‘long’ trade and below the ‘higher low’ in a ‘short’ trade. The take-profit is set at a price where the distance of take-profit from the point of ‘entry’ is equal to the distance of ‘stop-loss.’ That means the risk-to-reward (RR) of trades executed using this strategy is not more than 1:1. The reason for low RR is because we are trading against the trend of the market. Hence there is a possibility that the market might start moving in its major direction.

Strategy Roundup

A lot of traders warn against reversal trading, but finding top and bottom in the market and trading reversal can be done successfully if we have a proven methodology like the ‘make your wish’ strategy. We need to take into consideration all the rules outlined in this strategy guide other than just looking for the ‘shooting star’ pattern.

Categories
Forex Market Analysis

Gold Still Under Bearish Pressure

Overview

Overview

Overview

Gold price eases over 4% during this week, dragged by the U.S. Dollar strength, which rallies nearly 1.5%. Considering the short-term structure observed on both the market sentiment and the Elliott wave outlook, the precious metal could experience further declines during the coming trading sessions.

Market Sentiment Overview

The price of Gold continues being dominated by selling pressure this week, driven by the U.S. Dollar strength, accumulating losses of over 4% in the week. However, during this year, the precious metal has advanced over 24% (YTD). 

The market sentiment shown in the weekly chart reveals a decrease in the bullish bias of market participants, who have shifted from extreme bullish sentiment until the past week to a bullish bias. Likewise, considering that the price action continues above the 26-week moving average, the mid-term trend continues being bullish.

Likewise, the wide-range weekly candle, still in progress, reveals the current control by the bearish-side participants. However, the rebound at $1,848.84 per ounce developed during the trading session on Thursday 24th, leads us to observe that the yellow metal could have found a short-term support level.

On the other hand, according to the latest reading unveiled in the Commitment of Traders Report, where the speculative net positioning reached 240,977 positions, reveals that the big participants still maintain their bias on the bullish side. Consequently, a massive sell-off could correspond mainly to the take-profit activity rather than to a reversal of the upward trend.

The volatility presented in the following daily chart corresponds to the Gold Volatility Index (GVZ) and shows the movement consolidating into a flag pattern. At the same time, the internal structure reveals an upward pressure, which is confirmed by its last close above the 60-day moving average. This the market context leads us to expect new increments in the precious metal volatility, and with it, further declines in the price of gold.

Under the market sentiment perspective, the big picture of the precious metal reveals that the long-term trend remains mostly bullish. However, the short-term bias suggests further declines.

Elliott Wave Outlook

The gold price on its 4-hour chart shows the progress of a corrective sequence, which began on August 06th when the price reached its all-time high at $2,075.14 per ounce. Once this record high was reached, the precious metal found sellers which currently are maintaining the price under pressure.

As said, after Gold was controlled by the sellers, the price began a corrective structure made by three waves of Minuette degree labeled in blue, which is currently developing its wave (c). In the figure, we distinguish that once the price closed below the base-line b-d of the triangle pattern, the yellow metal confirmed this wave (c) that remains in progress. The internal structure of the wave (c) unveils that Gold advances in its third wave of Subminuette degree identified in green.

According to the Elliott wave theory, the wave (c) follows an internal structure formed by five segments. In the previous chart, we see that the price moves in its wave iii labeled in green. Consequently, the precious metal should develop a consolidation sequence before dropping to a new lower low with a potential target zone between $1,802.56 and $1,744.76 per ounce.

Finally, the invalidation level of the current bearish scenario locates at $1,973.43 per ounce.

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 25 – ETH Options Traders Like Trading Below $360; Crypto Market In the Green

The cryptocurrency sector has surprised the market and pushed towards the upside despite the short-term bearish sentiment surrounding it recently. Bitcoin is currently trading for $10,630, representing an increase of 3.56% on the day. Meanwhile, Ethereum gained 5.49% on the day, while XRP gained 3.71%.

The cryptocurrency sector has surprised the market and pushed towards the upside despite the short-term bearish sentiment surrounding it recently. Bitcoin is currently trading for $10,630, representing an increase of 3.56% on the day. Meanwhile, Ethereum gained 5.49% on the day, while XRP gained 3.71%.

The cryptocurrency sector has surprised the market and pushed towards the upside despite the short-term bearish sentiment surrounding it recently. Bitcoin is currently trading for $10,630, representing an increase of 3.56% on the day. Meanwhile, Ethereum gained 5.49% on the day, while XRP gained 3.71%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, Avalanche gained 24.96% on the day, making it the most prominent daily gainer. ABBC Coin (22.9%) and Arweave (18.7%) also did great. On the other hand, Hyperion lost 3.05%, making it the most prominent daily loser. It is followed by CyberVein’s loss of 2.76% and Reserve Paxos Standard’s loss of 0.4%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s level of market dominance stayed at the same spot since our last report, with its value currently being at 61.47%. This value represents a 0.02% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased in value over the past 24 hours. Its current value is $336.29 billion, which represents a decrease of $11.24 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the past 24 hours pushing towards the upside, which resulted in a price increase of around 6% during its peak. The largest cryptocurrency by market cap has reached $10,800 before the bulls have exhausted their resources. This move towards the upside has put BTC within the large triangle, meaning that we can expect another strong move (to either side of the triangle) in the short future.

BTC/USD 1-day Chart

If we take a look at the 4-hour time-frame, the largest cryptocurrency by market cap has pushed past 23.6% Fib retracement and established itself well above it. Once the move ended, BTC found immediate support at the 50-period moving average.

BTC/USD 4-hour Chart

Bitcoin’s short-term technicals have changed its overview from very bearish to slightly bullish. On the other hand, its long-term technicals remained extremely bullish on all time-frames longer than 4-hours.

BTC/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • Price is above both its 50-period EMA and 21-period EMA
  • Price near its top Bollinger band
  • RSI is neutral and tilted towards the upside (56.98)
  • Volume is volatile
Key levels to the upside          Key levels to the downside

1: $10,850                                 1: $10,630

2: $11,000                                 2: $10,500

3: $11,090                                  3: $10,015

Ethereum

Ethereum has pushed towards the upside, following Bitcoin’s move and gaining a bit less than 10% in the past 24 hours (during its peak). The second-largest cryptocurrency by market cap pushed past the $340 resistance line and established itself above it, therefore turning it into support. However, further moves towards and past $360 may be difficult at the moment, as we saw option traders for October expiration contracts “betting” that Ether is most likely going to trade between $340 and $360.

ETH/USD 4-hour Chart

Ethereum’s short-term technicals have not changed much since yesterday, tilting just slightly less to the sell-side than before. Its overview of longer time frames is extremely bullish, especially on the 1-day and 1-month technical overview.

ETH/USD 4-hour Technicals

Technical Factors (4-hour Chart):
  • The price is below its 50-period and right at its 21-period EMA
  • The price is between its top and middle Bollinger band
  • RSI is neutral (47.68)
  • Volume increased (but descending towards average)
Key levels to the upside          Key levels to the downside

1: $360                                     1: $340

2: $371                                     2: $300

3: $400                                      3: $289

Ripple

While XRP didn’t differ from the rest of the top cryptocurrencies and pushed towards the upside as well, the gains it made may not remain gains for long. XRP managed to gain around 5% in the past 24 hours (during its peak) but found great resistance at the 5th leg of the Elliot impulse wave. XRP quickly bounced off of it, indicating that we may see consolidation and a continuation towards the downside, where XRP will fulfill its move at the $0.219 target.

XRP/USD 4-hour Chart

XRP’s bearish sentiment extends across all time frames, with its 4-hour overview showing a bit lighter tilt towards the sell-side, and its longer time-frame overviews showing a strong tilt towards the sell-side.

XRP/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • The price is below its 50-period EMA and just above its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is natural (49.02)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $0.235                                   1: $0.227 

2: $0.2454                                 2: $0.221

3: $0.266                                  3: $0.214

 

Categories
Forex Price Action

It is Not over until It’s Over

In today’s lesson, we are going to demonstrate an example of a trendline trade setup. The price heads towards the North, and upon finding its support, it keeps moving towards the upside. At some point, it seems that the price is about to make a breakout at the trendline. However, the trendline works as a level of support and produces a beautiful bullish engulfing candle ending up offering a long entry. Let us find out how that happens.

In today’s lesson, we are going to demonstrate an example of a trendline trade setup. The price heads towards the North, and upon finding its support, it keeps moving towards the upside. At some point, it seems that the price is about to make a breakout at the trendline. However, the trendline works as a level of support and produces a beautiful bullish engulfing candle ending up offering a long entry. Let us find out how that happens.

In today’s lesson, we are going to demonstrate an example of a trendline trade setup. The price heads towards the North, and upon finding its support, it keeps moving towards the upside. At some point, it seems that the price is about to make a breakout at the trendline. However, the trendline works as a level of support and produces a beautiful bullish engulfing candle ending up offering a long entry. Let us find out how that happens.

The chart shows that the price makes a bullish move and comes down to make a bearish correction. It makes a bullish move again but finds its resistance around the same level. At the moment, the chart suggests that the bears have the upper hand.

The chart produces a Doji candle having a long lower spike. It pushes the price towards the North, and the price makes a breakout at the highest high. The last move confirms that the bull has taken control. The buyers may look for buying opportunities. Assume you are a trendline trader. Do you see anything?

Yes, you can draw an up-trending trendline. The last candle comes out as a bearish engulfing candle. It suggests that the price may make a bearish correction. As a trendline trader, you are to wait for the price to produce a bullish reversal candle at the trendline’s support to go long on the chart.

The chart produces two more candles that are bearish. The last candle closes just below the trendline’s support. It seems that the price is about to make a breakout at the trendline. The next candle is going to be very crucial for both. If the next candle comes out as a bullish reversal candle, the buyers are going to push the price towards the North. On the other hand, if the next candle comes out as a bearish candle closing below the trendline’s support, the sellers may push the price towards the South. Let us find out what happens next.

The chart produces a copybook bullish engulfing candle. Traders love to get this kind of reversal candle. The buyers may trigger a long entry right after the last candle closes. Let us proceed to find out how the trade goes.

The price heads towards the North with good bullish momentum. It makes a breakout at the last swing high as well. It means the trendline is still valid for the buyers. The chart produces a bearish reversal candle. Thus, the buyers may consider taking their profit out here.

If we look back, we find that the trendline’s support produces an excellent bullish reversal candle, which some buyers may not expect. This is what often happens in the market. Thus, never give up until its really over.

Categories
Forex Market Analysis

Daily F.X. Analysis, September 25 – Top Trade Setups In Forex – U.S. Durable Goods Orders in Highlights! 

On the news front, the eyes will remain on the U.S. fundamentals, especially the Durable Goods Orders m/m and Core Durable Goods Orders m/m, which are expected to report negative data and drive selling bias for the U.S. .dollar.

On the news front, the eyes will remain on the U.S. fundamentals, especially the Durable Goods Orders m/m and Core Durable Goods Orders m/m, which are expected to report negative data and drive selling bias for the U.S. .dollar.

On the news front, the eyes will remain on the U.S. fundamentals, especially the Durable Goods Orders m/m and Core Durable Goods Orders m/m, which are expected to report negative data and drive selling bias for the U.S. .dollar.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.6680 after placing a high of 1.16867 and a low of 1.16263. Overall the movement of the EUR/USD pair remained bullish throughout the day. After declining for four consecutive days, the EUR/USD currency pair fell to its lowest level in two months in an earlier trading session but reversed its direction in the late American session rose on Thursday.

During the first half of the day, the EUR/USD pair was continuously weighed by the broad-based U.S. dollar strength amid the lack of significant macroeconomic data from the Eurozone. The DXY that measures the greenback’s performance against its rival currencies rose to its highest level since late July at 94.59. However, the U.S. dollar gains were deteriorated by the decisive rebound in Wall Street’s main indexes. The S&P 500 Index was up by 1.23% on Thursday, and the DXY was also starting to decline near 94.30 level. This provided strength to the risk sentiment that ultimately pushed the EUR/USD pair to reverse its direction.

On the data front, at 13:00 GMT, the German IFO Business Climate dropped to 93.4 from the anticipated 93.9 and weighed on single currency Euro. At 17:57 GMT, the Belgian NBB Business Climate came in as -10.8 against the forecasted -11.0. From the U.S. side, the Unemployment Claims last week surged to 870K against the forecasted 845K and weighed on the U.S. dollar. The weak U.S. dollar added strength in EUR/USD pair on Thursday.

The rise in EUR/USD pair’s prices on Thursday could also be attributed to the chief economist’s positive comments for the Eurozone and Global Head of Macroeconomics, Carsten Brezesk. He said that the German economy has already entered the next recovery stage after the strong rebound in the third quarter. This was related to the German IFO Business Climate survey’s relatively strong release on Thursday that advanced in September to 93.4 from the previous 92.6. However, the single currency remained under pressure due to the high uncertainty faced by the largest Eurozone’s economy as the COVID-19 rate continued to increase across Europe.

On Thursday, both France and the United Kingdom counted record-breaking daily cases of COVID-19, with the U.K. reporting 6634 new COVD-19 cases on a single day. It was the highest number recorded by the country even before the nationwide lockdown. The rising number of infections across Europe and countries adopting new restrictive measures to control the spread and damage by coronavirus kept weighing the EUR/USD prices on Thursday.

Daily Technical Levels

Support Resistance

Support     Resistance

1.1636       1.1698

1.1600       1.1724

1.1573       1.1760

Pivot point: 1.1662

EUR/USD– Trading Tip

The bearish bias of the EUR/USD continues to dominate the market as it’s providing selling bias at 1.1650. The bearish breakout of the 1.1650 level can extend the selling trend until the 1.1590 level, while resistance stays at the 1.1680 level today. A bullish breakout of the 1.1686 level can drive the buying trend until the 1.1760 level. Mixed bias prevails in the market today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.27434 after placing a high of 1.27808 and a low of 1.26902. Overall the movement of the GBP/USD pair remained bullish throughout the day. After posting losses for three consecutive days and remaining flat for a day, the GBP/USD pair finally rebounded on the upside on Thursday amid the U.S. dollar weakness and fresh actions by the U.K. government to lessen the impact of the second wave of coronavirus in the country.

The British Pound rebounded against the U.S. dollar on Thursday after the U.K. government revealed fresh measures to protect businesses and jobs. This helped decrease the ongoing fear about the economic fallout by the newly imposed restrictions on the economy. To contain the virus, the U.K. government made a law that prohibits gathering more than six people. Furthermore, the bars and pubs in the U.K. were ordered to close by 10 PM, and movie theatres and parks were closed again. However, on Thursday, the UK Chancellor Rishi Sunak attempted to ease the pandemic’s economic fallout.

According to the Tory government’s new plans, from November, the U.K. will subsidize the pay of employees who have not returned to work full time but are working at least a third of their usual hours. This came in as the furlough scheme’s expiry date at the end of October was near, and the U.K. businesses had been calling on the government to renew the support. The calls for new support increased after the fears emerged in the market that the second wave could improve the job losses.

On Thursday, the U.K. reported a record-high number of coronavirus cases in a single day with a count of 6634 cases. It was the highest single-day count even before the lockdowns. This pushed the need for new measures from the government that was also welcomed by the Bank of England’s Governor Andrew Bailey. However, the BoE governor, Andrew Bailey, was less optimistic about the economy when he said that the fast recovery pattern over the summer would not continue in the same way. The British Pound that was surged against the dollar on the back of new measures might not live for long as the uncertainty around the Brexit talks between the E.U. & the U.K. remains on the card.

The latest Brexit update shows that the E.U. has threatened to take legal actions against the U.K. over its plans to go ahead with the so-called internal market bill that would undermine some parts of the withdrawal agreement the Northern Ireland issue. The E.U. has given a deadline of the end of September to the U.K. to scrap the bill. Meanwhile, Michel Barnier, a top E.U. negotiator, has also said that despite the U.K.’s wrong intentions to halt the withdrawal agreement, the Brexit deal was still possible, but this time E.U. will remain firm and realistic in negotiations. This also kept supporting the GBP/USD gains on Thursday.

Meanwhile, on the data front, at 15:00 GMT, the CBI Realized Sales rose to 11 from the projected -10 and supported British Pound that added gains in GBP/USD pair on Thursday. On the USD front, the rise in unemployment claims during last week to 870K from the projected 845K weighed on the U.S. dollar pushed GBP/USD pair even higher.

 Daily Technical Levels

Support    Resistance

1.2698        1.2791

1.2647        1.2833

1.2605        1.2884

Pivot point: 1.2740

GBP/USD– Trading Tip

The cable is consolidating in a sideways trading range of 1.2770 to 1.2725 level, as it has formed an ascending triangle pattern on the hourly timeframe. A bullish breakout of 1.2770 level can lead the Sterling price towards 1.2819 level on the higher side. Bullish bias will be more substantial over the 1.2770 level and bearish below the same level today.

 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.409 after placing a high of 105.529 and a low of 105.203. After posting bullish bias for three consecutive days, the GBP/USD pair remained in a confined range on Thursday, but one way or another managed to close its day with modest gains.

The Governor of the Bank of Japan, Haruhiko Kuroda, and the Prime Minister of Japan, Yoshihide Suga, met on Wednesday met for the first time since the prime minister took office last week. After the meeting, Kuroda said that there was no change in the Bank of Japan’s stance that former PM Shinzo Abe set that pledged monetary easing in pursuit of a 2% inflation target. Furthermore, Kuroda said that the deadline for aid to pandemic hit firms might extend, and this weighed on the Japanese Yen that ultimately supported the USD/JPY pair’s upward momentum.

On the other hand, the persistent uncertainty over the U.S. stimulus and resurging coronavirus cases worldwide resumed the downfall momentum in Wall Street Indexes and provided support to the safe-haven greenback that added in the upward trend of USD/JPY.

In an early trading session on Thursday, the Bank of Japan published its Minutes from its latest meeting and showed that policymakers were willing to act as needed to counter the pandemic’s effects on the economy. However, the USD/JPY pair’s gains were limited by the increased number of jobless Americans who filed for Unemployment claim benefits during the last week. The actual number came in as 870K against the forecasted 845K and weighed on the U.S. dollar.

Furthermore, the Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin testified before the Senate Banking Committee on Thursday. Both were gathered to discuss their agencies’ role in controlling the losses caused by the coronavirus crisis.

Powell said that the fears of slow economic growth have increased after the failure of the U.S. Congress to pass additional relief funds. Whereas, Mnuchin forced Congress to quickly pass the targeted relief fund by focusing on both parties’ needs and continuing the negotiations after that. The U.S. Dollar Index (DXY) rose to a two-month highest level, and this continued supporting the USD/JPY pair.

Daily Technical Levels

Support    Resistance

105.22        105.56

105.04        105.72

104.88        105.90

Pivot point: 105.38

  

USD/JPY – Trading Tips

On Friday, the USD/JPY is consolidating with a bullish bias to trade at 105.460 level, and the series for EMA is now extending at 105.550 level. On the lower side, the support holds at 104.840 level. The MACD is also in support of bullish bias amid a stronger U.S. dollar and reduced safe-haven appeal. Bullish crossover of 105.550 level may drive more buying until 106.258. The idea is to stay bearish below the 105.470 level today. Let’s wait for Jobless Claims from the U.S. to determine further trends. Good luck! 

 

Categories
Forex Basic Strategies

The Amazing Combination of ‘EMA & RSI’ While Trading The Forex Market

Introduction

Introduction

Introduction

Previously, we discussed several trading strategies that involved a combination of different indicators, but the number did not exceed two or three. In today’s article, we present a trading system that is based on five different Exponential Moving Averages, combined with the Relative Strength Index (RSI). This strategy will make a lot of sense to traders who are at an intermediate level of trading. It is totally mechanical in nature and requires a thorough understanding of technical indicators of MT4 or MT5.

Time Frame

The strategy can almost be used on any time frame, but a larger one is preferred, 1 hour or higher. This means the strategy is not suitable for trading during the day.

Indicators

As said, we will use five different Exponential Moving Averages and one Relative Strength Index (RSI). This is the reason we need to be well versed in the technical indicators.

Currency Pairs

This strategy can be used with any currency pair. Also, with few commodities as well. Liquidity will not be an issue here since we are trading on the higher time frames.

Strategy Concept

Firstly, we use 80-period EMA to identify the major trend of the market. If the price is above 80 EMA, we say that the market is in a bull market, while if it is below the 80 EMA, the market is in a bear market. Secondly, we use the 21-period and 13-period EMA to point out the current trend direction, meaning, the current minor trend within the major trend. If the EMA with a shorter period is above the one with the longer period, we have a minor bull trend, and vice versa.

Third, we use the other two EMAs with even shorter ‘periods’ in conjunction with the Relative Strength Index (RSI) to generate entry signals. These are the 3-period EMA and 5-period EMA. The crossing of these two EMAs supported by the appropriate value of RSI, tells us whether to go long or short in the currency pair.

However, a more conservative approach would be by ignoring the entry signals, which are in the opposite direction of the major trend. Therefore a ‘long’ entry signal would be generated when the 3-period EMA penetrates the 5-period EMA from below and starts moving higher. Also, the 80-period EMA must be below the price action discussed above, and RSI must have a value exceeding 50. We execute the trade once the signal bar closes beyond the 5-period EMA.

Conversely, a ‘short’ entry will be taken when the 3-period EMA penetrates the 5-period EMA from above and continues lower. This must be coupled with an RSI value below 50, and 80-period EMA be above the price action.

Trade Setup

In order to explain the strategy, we have considered the 4-hour chart of USD/CAD, where we will be applying the rules of the strategy to execute a ‘long’ trade.

Step 1

Since this a trend-based strategy, the first step is to identify the major direction of the market using the 80-period EMA. It is important that the price remains above the EMA for at least four consecutive higher highs and higher lows before we can call it an uptrend. Likewise, the price should be below the 80-period EMA for a minimum of 4 lower lows and lower highs.

The below image shows a clear uptrend visible on USD/CAD on the 4-hour chart.

Step 2

Once we have identified the trend, we need to wait for a price retracement that could give us an opportunity to enter the market and ride the trend. We need to evaluate if this a true retracement or the start of a reversal. In this step, we should wait until the price develops a ‘range’ or the 80-period EMA becomes flat. This partially confirms that the retracement is real, and the price could be making a new ‘high’ or ‘low.’

In the example we have taken, we can see how the price starts to move in a ‘range’ along with the flattening of the EMA. Next, let us discuss the ‘entry’ part of the strategy.

Step 3

We shall enter the market for a ‘buy’ when all the smaller EMAs cross the 80-period from below. The 3-period EMA should penetrate the 5-period EMA and start moving forward to generate a reliable ‘buy’ signal. Along with this, at the entry bar, the RSI should be above the 50 levels, and both the 3 and 5 periods EMA should cross the 13-21 EMA channel. Once all of these conditions are fulfilled, we can take a risk-free entry into the market. The same rules apply while taking a ‘short’ trade but in reverse.

The below image clearly shows the ‘entry’ where all the conditions mentioned above are met.

Step 4

Once we have entered the trade, we need to determine the stop-loss and take-profit levels. For this strategy, the take-profit and stop-loss are placed in such a way that the resultant risk-to-reward of the trade is 2.5. The RR is derived mathematically, where we have taken into consideration the possibility of a new ‘high’ or ‘low’ as we are trading in a strong trending environment.

Accordingly, we have set the take-profit and stop-loss in our example, as shown below.

Strategy Roundup

Combining two or more technical indicators has always proven profitable for traders. The above-discussed strategy considers the trend of the market, momentum, strength of the retracement, and shift of ‘highs’ and ‘lows,’ which makes it an amazing strategy to be used while trading part-time or full-time. Since there are many rules and requirements for the strategy, the probability of occurrence of trade-setup is less, but once formed, it can provide amazing results.

Categories
Forex Market Analysis

Daily F.X. Analysis, September 24 – Top Trade Setups In Forex – U.S. Jobless Claims in Focus! 

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

Economic Events to Watch Today  

 

 

AUD/USD – Daily Analysis

The AUD/USD failed to stop its previous losing streak and dropped to a 2-months low around below the mid-0.7000 level mainly due to the risk-off market sentiment, triggered by the renewed concern about the second wave of coronavirus infections, which continued weighing on investors sentiment and undermined the perceived riskier Australian dollar. The broad-based U.S. dollar strength, supported by the combination of factors, also dragged the currency down across the ocean. At the moment, the AUD/USD is currently trading at 0.7033 and consolidating in the range between 0.7029 – 0.7083. 

The traders seem cautious to place any strong position ahead of the testimony by the Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin, which will influence the USD price dynamics and provide some fresh direction to the currency pair.

Worries that the coronavirus pandemic’s resurgence could ruin the global economic recovery keeps the market trading sentiment under pressure and weakened the perceived riskier Australian dollar. As per the latest report, the coronavirus COVID-19 cases continue to climb in Europe, U.K., and the U.S. Whereas, some E.U. countries are now facing the starting of the second wave coinciding with the onset of the flu season. That was witnessed after the World Health Organization’s regional director for Europe said that “We have a dire situation unfolding before us,” H further added that Europe’s number of weekly infections was higher now than at the first peak in March. 

At the US-China front, the long-lasting tussle between the United States and China remains on the play as State Mike Pompeo took help from France, Germany, and the U.K. to reject China’s claims of the South China Sea at the United Nations (U.N.). This also exerted downside pressure on the market trading sentiment and contributed to the currency pair losses. 

As a result, the broad-based U.S. dollar succeeded in extending its previous session gains and remained well bid on the day as investors turned to the safe-haven in the wake risk-off market sentiment. However, the U.S. dollar gains could be short-lived or temporary due to the worries that the U.S.’s economic recovery could be stopped because of the reappearance of coronavirus cases. Besides this, the gains in the U.S. dollar was further boosted after the hawkish comments by Chicago Fed President Charles Evans, that further quantitative easing may not provide additional support to the U.S. economy. However, the gains in the U.S. dollar kept the currency pair under pressure. Whereas, the dollar index, which pits the dollar against a bucket of 6-major currencies, stood at 94.336 on the day, close to a nine-week high.

Moving Ahead, the traders will keep their eyes on the U.S. economic docket, which will show the release of Initial Weekly Jobless Claims and New Home Sales data. Apart from this, the U.S. Federal Reserve (Fed) Chair Jerome Powell’s testimony will also be closely observed. Across the ocean, the market risk sentiment and developments surrounding the coronavirus will not lose their importance. 

Daily Technical Levels

 Support      Resistance  

0.7035       0.7147  

 0.6996      0.7218  

 0.6924      0.7258  

  Pivot Point: 0.7107  

  

AUD/USD– Trading Tip

The stronger U.S. dollar has also driven sharp selling in the AUD/USD pair as it trades at 0.7042 level today. The AUD/USD pair has formed three black crows patterns on a daily timeframe, suggesting odds of selling bias in the AUD/USD. However, the AUD/USD has closed a Doji candle at 0.7042 level, and we may see some bullish correction over the 0.7001 support level until the next resistance level of 0.7098 and 0.7152 level. 

USD/CAD– Daily Analysis

The USD/CAD currency pair extended its previous session bullish bias and kept gaining positive traction around above 1.3400 level, mainly due to the broad-based U.S. dollar strength. The bullish tone around the U.S. dollar was sponsored by the concerns over rising COVID-19 cases and fears of renewed lockdown measures, which kept the market trading sentiment under pressure and supported the greenback’s status as the global reserve currency. 

On the flip side, the currency pair bullish bias could also be attributed to the weaker crude oil prices, which undermined the demand for the loonie, a commodity-linked currency, and contributed to the pair gains. Currently, the USD/CAD pair is trading at 1.3396 and consolidating in the range between 1.3370 – 1.3412.

As we already mentioned that the equity market had been flashing red since the Asian session started. The reason could be associated with the major negative catalysts. Be it the concerns about the second wave of coronavirus diseases or the fears of renewed lockdown measures, not to forget the long-lasting US-China tussle, all these factors weigh on the market trading sentiment and helping the U.S. dollar to put the safe-have bids. Apart from this, the slowdown in Europe, alongside concerns expressed by U.S. Federal Reserve officials over the U.S. economy, pushed the equity market down. 

The broad-based U.S. dollar keeps its gaining streak and still reporting gains on the day amid market risk-off sentiment. However, the U.S. dollar gains could be short-lived or temporary as worries that the U.S.’s economic recovery could be stopped amid the resurgence of the second wave of coronavirus cases. Besides this, the U.S. dollar gains were further boosted by the hawkish comments by Chicago Fed President Charles Evans, suggesting that further quantitative easing may not provide additional support to the U.S. economy. However, the gains in the U.S. dollar kept the currency pair higher. Whereas, the dollar index, which pits the dollar against a bucket of 6-major currencies, stood at 94.336 on the day, close to a nine-week high.

Across the pond, the crude oil prices failed to stop its previous session, losing streak and remained pressed around below the mid-$39.00 marks. Besides, the possibilities of Libya resuming oil exports added further bearish pressures around the crude oil prices. Thus, the declines in crude oil prices undermined demand for the commodity-linked currency the loonie and contributed to the currency pair gains. 

Looking forward, the traders will keep their eyes on the U.S. Federal Reserve (Fed) Chair Jerome Powell’s testimony. Furthermore, the U.S. Jobless Claims and Housing data will also be key to watch. Whereas, the updates concerning the US-China relations and the U.S. stimulus package will not lose their importance.

 Daily Technical Levels

Support      Resistance

  1.3323      1.3418  

  1.3260      1.3450  

  1.3228      1.3513  

  Pivot Point: 1.3355  

  

USD/CAD– Trading Tip

The USD/CAD is trading with a bullish bias at 1.3402 level, having violated the ascending triangle pattern at 1.349 level, and now it’s heading further higher until the next resistance level of 1.3460. The MACD and three white soldiers pattern is suggesting chances of bullish bias in the pair. In contrast, the pair has also crossed over 50 periods EMA at 1.3254 level. Today we should consider taking a buying trade over 1.3349 level to target the 1.3462 level. 

 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.362 after placing a high of 105.494 and a low of 104.847. The pair USD/JPY extended its gains on Wednesday for the third consecutive day and peaked six previous days. The rising USD/JPY prices were due to the strong rebound of the U.S. dollar’s safe-haven status and upbeat market data.

On Wednesday, the U.S. dollar was strong due to Fed officials’ more hawkish comments that raised the U.S. dollar and helped it regain its safe-haven status. The strong bullish momentum in the USD/JPY pair was also supported by Japan’s weak PMI data on Wednesday.

At 05:30 GMT, the Flash manufacturing PMI from Japan for the month of September declined to 47.3 against the projected 48.0 and weighed on the Japanese Yen. The figures showed that Japan’s manufacturing sector viewed contraction in September that was negative for local currency but positive for the USD/JPY pair. At 09:30 GMT, All Industrial Activity in September remained flat at 1.3% from Japan.

On the U.S. front, the Housing Price Index for July advanced to 1.0% against the expectations of 0.4% and supported the U.S. dollar that helped the gains of USD?JPY pair on Wednesday. At 18:45 GMT, the highly awaited Flash Manufacturing PMI also rose to 53.5 against the anticipated 52.5 and supported the greenback that added further gains in the USD/JPY pair. However, the Flash Services PMMI remained flat with a projection of 54.5.

Meanwhile, the President of the Federal Reserve Bank of Cleveland, Loretta Mester, said on Wednesday that the U.S. economy had rebounded significantly from the losses caused by the pandemic induced lockdowns. However, she also said that the recovery was still narrow and was not sustainable. The Fed Vice Chair Randal K. Quarles said that the coronavirus event was an enormous economic shock in the first half of 2020. He also said that the recovery was underway, but a full recovery was far off as the risks remain on the downside.

Apart from this, the Fed Chair Jerome Powell, in his testimony, faced many questions regarding the next round of stimulus package. He replied that the difference between Democrats & Republicans over the package’s size remains and caused a delay. Powell also urged more spending to help the economy recover from the pandemic crisis. All these developments raised the U.S. dollar prices due to its safe-haven status and boosted the USD/JPY pair.

Moreover, the tensions between the U.S. and China also escalated after U.S. President Donald Trump blamed China and called for holding it accountable for the global spread of coronavirus. In response to this, Chinese President XI Jinping accused Trump of lying and insulting the platform of the U.N. He also said that he had no intension of having a cold war with any country. These harsh comments from both sides also raised uncertainty and helped the U.S. dollar to gain traction due to safe-haven nature and post gains in the USD/JPY pair on Wednesday.

Daily Technical Levels

Support      Resistance

  105.0000      105.6100  

  104.6400      105.8600  

  104.3900      106.2100  

  Pivot Point: 105.2500  

  

USD/JPY – Trading Tips

The USD/JPY is trading with a bullish bias to trade at 105.460 level, and the series for EMA are now extending at 105.550 level. On the lower side, the support stays at 104.840 level. The MACD is also in support of bullish bias amid a stronger U.S. dollar and reduced safe-haven appeal. Bullish crossover of 105.550 level may drive more buying until 106.258. The idea is to stay bearish below the 105.470 level today. Let’s wait for Jobless Claims from the U.S. to determine further trends. Good luck! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 24 – Bitcoin Following Gold: $9,300 On The Horizon

The cryptocurrency sector has experienced a slight decrease in value as (as many traders speculate) Bitcoin mirrored Gold’s triangle pattern breakout and headed towards the downside. Bitcoin is currently trading for $10,261, representing a decrease of 1.72% on the day. Meanwhile, Ethereum lost 4.54% on the day, while XRP lost 3.79%.

The cryptocurrency sector has experienced a slight decrease in value as (as many traders speculate) Bitcoin mirrored Gold’s triangle pattern breakout and headed towards the downside. Bitcoin is currently trading for $10,261, representing a decrease of 1.72% on the day. Meanwhile, Ethereum lost 4.54% on the day, while XRP lost 3.79%.

The cryptocurrency sector has experienced a slight decrease in value as (as many traders speculate) Bitcoin mirrored Gold’s triangle pattern breakout and headed towards the downside. Bitcoin is currently trading for $10,261, representing a decrease of 1.72% on the day. Meanwhile, Ethereum lost 4.54% on the day, while XRP lost 3.79%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, Uniswap gained 13.73% on the day, making it the most prominent daily gainer. HedgeTrade (9.22%) and Hyperion (5.61%) also did great. On the other hand, DigiByte lost 17.91%, making it the most prominent daily loser. It is followed by Ren’s loss of 17.78% and Reserve Rights’ loss of 11.70%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced a slight increase since our last report, with its value currently being at 61.45%. This value represents a 0.35% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has decreased in value over the past 24 hours. Its current value is $325.05 billion, which represents a decrease of $8.86 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day mirroring Gold’s movement from a day ago, where it broke the same triangle pattern to the downside. With the same happening to Bitcoin, we saw its price falling to sub-$10,300 levels. If we take into account the CME Futures, which will expire on Friday, deeming as much as 86% of $284 million worth of contracts worthless, we can guess with accuracy that the bears will continue to reign over the market for now. The suggested price of $9,300 to $9,500 is even more realistic now.

BTC/USD 1-day Chart

If we take a look at the 4-hour time frame, the largest cryptocurrency by market cap has dropped below the 23.6% Fib retracement as well as the triangle bottom line, suggesting strong bearish sentiment in the short-term. While the volume is descending and preparing for the next move, Bitcoin’s next one will most likely be to the downside.

BTC/USD 4-hour Chart

Bitcoin’s short-term technicals haven’t changed from yesterday, and are still very bearish. However, while the technicals are very bearish on the 4-hour chart, the daily and weekly technical overview is slightly less bearish, while the monthly overview is very bullish.

BTC/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • Price is below both its 50-period EMA and 21-period EMA
  • Price slightly closer to the bottom Bollinger band
  • RSI is neutral (34.72)
  • Volume is slowly descending from a massive spike
Key levels to the upside          Key levels to the downside

1: $10,500                                 1: $10,015

2: $10,630                                 2: $9,880

3: $10,850                                  3: $9,740

Ethereum

The DeFi market has managed to recover from its plummet, with yearn.finance leading the move to the upside. While Ethereum has lost value due to its correlation with Bitcoin, its short-term overview is slightly more bullish.

However, if we take a look at Ethereum’s chart, we can see that the second-largest cryptocurrency by market cap managed to stabilize after hitting the bottom Bollinger band, which provided adequate support. While ETH did fall below $340 and broke a major support level, which calls for a push towards $300, the situation is slightly more bullish than the day before.

ETH/USD 4-hour Chart

Ethereum’s short-term technicals are extremely bearish, while the situation changes drastically in the weekly and monthly overview, where the overview is quite bullish.

ETH/USD 4-hour Technicals

Technical Factors (4-hour Chart):
  • The price is below both its 21-period and its 50-period EMA
  • The near its bottom Bollinger band
  • RSI is hovering around the oversold line (30.56)
  • Volume is average (except for the one-candle volume spike during the downturn)
Key levels to the upside          Key levels to the downside

1: $340                                     1: $300

2: $360                                     2: $289

3: $371                                      3: $278

Ripple

XRP has spent the day continuing its Elliot impulse wave 5th leg. While its price did go down, many traders have turned slightly bullish, calling out for the end of the 5th leg of the impulse wave at the spot where the price meets the ascending trend line from March (the red ascending line). This would put the price target for XRP at somewhere between $0.215 and $0.218 before pushing towards the upside.

XRP/USD 1-day Chart

While many traders have turned bullish, XRP’s technicals are still firm with their bearish sentiment. The bearish sentiment doesn’t end at the shorter time frames; it rather extends to the daily and weekly overview as well.

XRP/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • The price is below both its 21-period EMA and its 50-period EMA
  • Price is very close to its bottom Bollinger band
  • RSI is in the oversold territory (27.28)
  • Volume is volatile, with occasional spikes
Key levels to the upside          Key levels to the downside

1: $0.227                                   1: $0.221 

2: $0.235                                   2: $0.214

3: $0.2454                                3: $0.2

 

Categories
Forex Course

148. How To Fade The Breakout By Successfully Trading It?

Introduction Most retail traders have a greedy mentality, so they always prefer to trade the breakouts to catch the home run. They believe in considerable gains in huge moves. Trading smaller moves are something they are not interested in because it takes a lot of work and time to scan the market. The problem with […]

Introduction Most retail traders have a greedy mentality, so they always prefer to trade the breakouts to catch the home run. They believe in considerable gains in huge moves. Trading smaller moves are something they are not interested in because it takes a lot of work and time to scan the market. The problem with […]

Introduction

Most retail traders have a greedy mentality, so they always prefer to trade the breakouts to catch the home run. They believe in considerable gains in huge moves. Trading smaller moves are something they are not interested in because it takes a lot of work and time to scan the market. The problem with breakout trading is that the majority of the breakouts fail. To make consistent money from the market, professionals always prefers to fade the breakout. The fading breakout essentially means trading a false breakout.

Fading Breakouts = Successfully trading the False Breakout

The image above represents the formation of a false breakout, which gives us a potential sell opportunity. Experienced industrial traders are always interested in fading the breakout because they know the crux of it. Most of the time, when the price action attempts to fade the breakout, it fails and closes back inside any of the major levels. Therefore, fading the breakout is always a smarter move than avoiding it.

Trading Strategies

Always remember that fading the breakout is a short term strategy. Therefore, please do not expect a home run while taking these trades. What we are doing here is that we are trading the false breakout moves. During the fight between the buyers and sellers, we will witness the initial moves, often failing to give the breakouts.

We are just taking advantage of these exact moves. In the end, one party always wins, and we will eventually get the breakout on the price chart. Instead of waiting for the home run, it is always advisable to trade some smaller moves, and if the market allows the home run, we must definitely go for it.

Buy Trade

The price chart below represents a false breakout in the GBP/NZD Forex pair.

As we can see in the below chart, where the price action breaks below the channel, it came back right into the channel, indicating a false breakout. After the breakout, we can see the price action holding at the support zone. We decided to go long after we saw the red candles struggling to go down and when a clear big Green Candle is formed. Instead of being disappointed that the breakout didn’t happen to take the trade, these small trades inside the major areas come handy to make money.

Sell Trade

The image below represents the formation of a false breakout in the GBP/AUD Forex pair.

As you can see, the image below represents our entry, exit, and stop-loss in this pair. When the price failed to go above the major level, it is an indication for us to take a trade inside the triangle. Therefore, when the price came back, we took the sell entry to the most recent support area. The stops above the entry should be good enough.

Another Sell Trade

The image below represents a false breakout in the GBP/AUD Forex pair.

As you can see, when the prices failed to break the trend line and started to hold below the trend line, it was a sign that it is a failed breakout. It also indicates that the sellers are going to take over the market when we look-in the price action perspective. In this trade, we choose not to close our position at the most recent higher low. Instead, we went for the actual breakout. The holds below the support area is an additional confirmation for us to go to the most recent lower low area.

That’s about Fading the breakout, and we hope you find this lesson informative. Let us know if you have any questions in the comments below. Cheers!

Categories
Forex Daily Topic Forex Price Action

What Does A Combination of Double Top and Evening Star Do?

We know a double top is a strong bearish reversal pattern. When the price trends with a double top, it usually creates strong bearish momentum. At consolidation, if it produces an evening star, it creates more momentum that is more bearish since the evening star is a strong bearish reversal pattern as well. In today’s lesson, we are going to demonstrate an example of that.

We know a double top is a strong bearish reversal pattern. When the price trends with a double top, it usually creates strong bearish momentum. At consolidation, if it produces an evening star, it creates more momentum that is more bearish since the evening star is a strong bearish reversal pattern as well. In today’s lesson, we are going to demonstrate an example of that.

We know a double top is a strong bearish reversal pattern. When the price trends with a double top, it usually creates strong bearish momentum. At consolidation, if it produces an evening star, it creates more momentum that is more bearish since the evening star is a strong bearish reversal pattern as well. In today’s lesson, we are going to demonstrate an example of that.

The chart shows that the price has been roaming around within two horizontal levels. It has several rejections at the resistance zone. At the last two rejections, it produces two bearish engulfing candles. Moreover, the last candle breaches through the level of support or the neckline. It means the chart may get bearish since it produces a double top.

As expected, the price heads towards the South with good bearish momentum. The sellers are to wait for the price to consolidate and a bearish reversal candle/pattern to go short in the pair.

It seems that the price may have found its support. It produces a bullish inside bar followed by a Doji candle. If the price makes a breakout at the level of consolidation support, the sellers may go short in the pair and drive the price towards the South.

The chart produces a bearish engulfing candle closing well below consolidation support. It is a strong bearish reversal candle itself. The combination of the last three candles is called the evening star, which is a very strong bearish reversal pattern. It suggests that the price may get very bearish soon. The sellers may trigger a short entry right after the last candle closes by setting stop-loss above the last candle’s highest high. We talk about the take-profit level in a minute. Let us find out how the trade goes.

The price heads towards the South with extreme bearish momentum. The last candle comes out as a bullish engulfing candle. It may make a bullish correction or reversal now. However, before producing the bullish engulfing candle, the price travels 2R. Even if the sellers close the entry at the last candle close, they make 1R profit.

When a trend starts with a strong reversal pattern such as the double top/double bottom, morning star, evening star, and it produces a strong reversal pattern at consolidation as well, the price usually produces a longer wave. Trade management is to immaculate, though. Thus, make sure that the trade is made relatively on a bigger time frame such as the H4, the daily, the weekly, etc.

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 23 – Gold Pushing BTC Towards $9,500; XRP Bears Taking Over

The cryptocurrency sector has mostly tried to consolidate after this weekend’s losses. Bitcoin is currently trading for $10,496, representing an increase of 0.68% on the day. Meanwhile, Ethereum gained 0.26% on the day, while XRP lost 1.28%.

The cryptocurrency sector has mostly tried to consolidate after this weekend’s losses. Bitcoin is currently trading for $10,496, representing an increase of 0.68% on the day. Meanwhile, Ethereum gained 0.26% on the day, while XRP lost 1.28%.

The cryptocurrency sector has mostly tried to consolidate after this weekend’s losses. Bitcoin is currently trading for $10,496, representing an increase of 0.68% on the day. Meanwhile, Ethereum gained 0.26% on the day, while XRP lost 1.28%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, OMG Network gained 21.05% on the day, making it the most prominent daily gainer. Synthetix Network (20.54%) and Hyperion (16.87%) also did great. On the other hand, Avalanche lost 54.43%, making it the most prominent daily loser. It is followed by Orchid’s loss of 13.56% and Celo’s loss of 10.10%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced a slight decrease since our last report, with its value currently being at 61.10%. This value represents a 0.19% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has slightly increased in value over the past 24 hours. Its current value is $333.91 billion, which represents an increase of $3.7 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day trying to “end the battle” for the 23.6% Fib retracement level. With it ultimately ending up above it, Bitcoin has managed to stay out of the bearish cycle it was about to jump in. With that being said, the 1-day chart is still calling for a pullback towards the $9,300-$9,500. The large red triangle on our chart shows Bitcoin’s possible correlation with gold (as the gold chart looks exactly the same, with the exception that its triangle already popped to the downside), which may cause another push towards the downside.

BTC/USD 1-day Chart

If we take a look at the 4-hour time frame, the largest cryptocurrency by market cap managed to stay above the triangle bottom line and gain a foothold at the 23.6% Fib retracement line. However, Bitcoin’s sentiment is still slightly bearish in the short-term, which may ultimately result in another nosedive.

BTC/USD 4-hour Chart

Bitcoin’s short-term technicals are still very bearish. However, the more we look at longer time frames, the better the situation is. While the technicals are very bearish on the 4-hour chart, the daily and weekly overview are not so bad (though still tilted towards the downside), while the monthly overview is still very bullish.

BTC/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • Price is slightly  below its 50-period EMA and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral and recovering from the downswing (39.62)
  • Volume is slowly descending from a massive spike
Key levels to the upside          Key levels to the downside

1: $10,630                                 1: $10,500

2: $10,850                                 2: $10,015

3: $11,000                                  3: $9,880

Ethereum

DeFi market is experiencing a bloodbath, with yearn.finance dropping 50% from its highs established in the past weeks and the rest of the market following. With that being said, many institutional investors have said they are macro-driven and not crypto-driven and that ETH’s fundamentals have never been better.

However, if we take a look at Ethereum’s chart, we can see that the situation is not exactly bullish. The second-largest cryptocurrency by market cap has barely established support at the $340 level. With the volume coming back to normal, it seems that ETH will stay at this level and try to consolidate in the short-term.

ETH/USD 4-hour Chart

Ethereum’s short-term technicals are extremely bearish, while its mid-term technicals are getting quite bullish. This confirms the story that the “smart money” is telling, which is that institutional money is coming into the market regardless of the short-term bearishness.

ETH/USD 4-hour Technicals

Technical Factors (4-hour Chart):
  • The price is below both its 21-period and its 50-period EMA
  • The between its middle and bottom Bollinger band
  • RSI is neutral but tilted towards the downside (34.67)
  • Volume has returned to average
Key levels to the upside          Key levels to the downside

1: $360                                     1: $340

2: $371                                     2: $300

3: $400                                      3: $289

Ripple

XRP has spent the day trying to consolidate after a push towards the downside. The fourth-largest cryptocurrency by market cap has (for now) stopped its squeeze down after hitting the bottom of the bottom Bollinger band, which stopped it from descending further. While the sentiment is still bearish, the move towards the downside that will finish the Elliot impulse wave’s fifth leg may be delayed slightly.

XRP/USD 1-day Chart

Taking a look at the technicals, XRP is showing extreme bearish sentiment on both short-term and long-term charts. Its 4-hour, daily, weekly and monthly indicators are heavily tilted towards the downside, which is certainly not a good sign for the XRP bulls.

XRP/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • The price is below both its 21-period EMA and its 50-period EMA
  • Price is slightly above its bottom Bollinger band
  • RSI is neutral and flat (38.38)
  • Volume is coming back to average
Key levels to the upside          Key levels to the downside

1: $0.235                                   1: $0.227 

2: $0.2454                                 2: $0.221

3: $0.266                                  3: $0.214

 

Categories
Forex Daily Topic Forex Price Action

Using Weekly High or Weekly Low in the H4 Chart Trading

The Weekly high or Weekly low plays a significant part in the H4 chart traders. In today’s lesson, we will demonstrate an example of how last week’s high works as a level of support and pushes the price towards the upside by offering a long entry to the buyers. Let us get started.

The Weekly high or Weekly low plays a significant part in the H4 chart traders. In today’s lesson, we will demonstrate an example of how last week’s high works as a level of support and pushes the price towards the upside by offering a long entry to the buyers. Let us get started.

The Weekly high or Weekly low plays a significant part in the H4 chart traders. In today’s lesson, we will demonstrate an example of how last week’s high works as a level of support and pushes the price towards the upside by offering a long entry to the buyers. Let us get started.

It is an H4 chart. Look at the vertical dotted line. The price starts its week with a spinning top having a bullish body. The price then heads towards the North and come down again. In the end, the price closes its week around the level where it starts its trading week.

The pair starts its week with a spinning top having a bearish body this time. The price heads towards the North and makes a breakout at the last week’s high. The price usually comes back at the breakout level to have consolidation and ends up offering entry upon producing a reversal candle. Let us draw the breakout level to have a clearer picture.

The drawn line indicates the last week’s high. Now, the H4 chart suggests that the price made a breakout, and the pair is trading above the level currently. The buyers are to wait for the price to consolidate and produce a bullish reversal candle to go long in the pair.

The chart produces a bearish candle closing within the breakout level first. The next candle comes out as a Doji candle. The buyers are to wait for a breakout at consolidation resistance to go long in the pair. Let us proceed to the next chart to find out what the price does next.

The chart produces three more bullish candles. One of the candles breaches through the level of resistance closing above it. The buyers may trigger a long entry right after the last candle closes. The buyers may set their stop loss below the breakout level. To set the take-profit level, the buyers may set their take profit with 2R. It is the best thing about this trading strategy. It offers at least 2R. Sometimes the price travels even more than 2R. Let us find out how the trade goes.

The price heads towards the North with good bullish momentum. Before hitting 2R, it produces a bearish inside bar. It continues its journey towards the North and travels more than 2R. The last candle comes out as a bearish engulfing candle. It suggests that the price may get bearish now.

The best things about using the strategy are

  1. Traders know where the price is going to consolidate.
  2. Which level is going to produce the signal candle.
  3. It offers an excellent risk-reward.
Categories
Forex Market Analysis

Daily F.X. Analysis, September 22 – Top Trade Setups In Forex – Fed Chair Powell Testifies!

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.7713 after placing a high of 1.18715 and a low of 1.17315. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair slumped on Monday amid the reclaimed safe-haven status by the U.S. dollar and the re-imposed lockdown measures to curb the spread on the virus in Europe.

The U.S. Dollar Index was up by 0.8% to 93.69 level on Monday, its highest level since August 13. This supported the greenback on its way to reclaiming its safe-haven status and pulled the EUR/USD pair on the downside.

According to the European health minister, the second wave of coronavirus in France, Austria, and the Netherlands could spike and affect the European countries and hold threats that Germany could also see infection spikes. 

The U.K. is also reporting new coronavirus cases and the Britain Chief Scientific adviser, Patrick Vallance, said that there could be 50,000 new infections every day by mid-October if the virus continues at its current rate. The rising number of coronavirus cases from Europe weighed on prices of EUR/USD pair on Monday.

Furthermore, the European Central Bank President Christine Lagarde said that Europe’s economic rebound was uncertain and uneven, and it required a careful assessment of incoming data, including the evolution of the coronavirus pandemic. On Monday, Lagarde said that the recovery strength was dependent on the future evolution of the pandemic and containment policies’ success. These remarks came in as the economists expect the ECB to expand its emergency 1.35T euros bond-buying program this year to revive inflation.

Germany’s Bundesbank also said that it expected the recovery in Europe’s largest economy to continue at a slower pace during the rest of the year. These concerning comments raised caution and stressed the local currency that ended up weighing on EUR/USD pair prices on Monday.

Meanwhile, the risk sentiment further deteriorated after the US-China tensions continue to expand along with the delayed U.S. stimulus measure that raised the safe-haven appeal. The U.S. dollar regained its safe-haven status and was up by 0.8% on Monday. This strong U.S. dollar added further pressure on EUR/USD prices.

Daily Technical Levels

Support Resistance

1.1709     1.1851

1.1649     1.1933

1.1568     1.1993

Pivot Point: 1.1791

EUR/USD– Trading Tip

The stronger U.S. dollar has also driven sharp selling in the EUR/USD pair as it trades at 1.1768 level today. The pair gains support over a double bottom pattern of 1.1736, and a bullish crossover of 1.1773 level may extend the buying trend until 1.1797 level. Bullish bias can remain strong today as most of the traders may do profit-taking in the EUR/USD pair. Let’s stay bullish over the 1.1728 level and bearish below the same level today.

GBP/USD – Daily Analysis

Today in the Asian trading hours, the GBP/USD pair was closed at 1.28156 after placing a high of 1.29664 and a low of 1.27751. Overall the movement of the GBP/USD pair remained bearish throughout the day. The GBP/USD pair extended its previous day’s losses on Monday and fell to its 5-days lowest level amid the broad-based U.S. dollar strength and rising number of coronavirus cases in the U.K., along with Brexit worries.

The rising signals drove the downward momentum in the Pound to U.S. dollar exchange rate that the U.K. government could send Britain into another lockdown. The rising concerns over Britain’s economy and the stalled Brexit process further weighed on the Sterling that dragged the GBP/USD prices on Monday.

The top science adviser of the U.K., Sir Patrick Vallance, said on Monday that U.K.’s coronavirus numbers could reach new 50,000 cases per day by mid-October. His warning was based on current trends that showed that the pandemic was doubling every seven days.

Valance said that 50,000 figure was a warning and not a prediction. In response to his warning, the fears that the U.K.’s economy could see another round of lockdown measures to control the spread of coronavirus raised and weighed on local currency. The weak British Pound added further pressure on the declining GBP/USD prices on Monday.

On the Brexit front, the former Prime Minister of the UK, Theresa May, said that she could not support the government’s plan to override parts of its Brexit agreement with the European Union. She said that moving ahead with this law would break international law and damage the United Kingdom’s trust. On Tuesday, the internal market bill will be voted on in the Commons as it had already passed the first hurdle last week. Ministers have said that the bill contains vital safeguards to protect Northern Ireland and the rest of the U.K. 

In simple terms, the bill is designed to enable goods and services to flow freely across England, Scotland, Wales, and Northern Ireland after Brexit on January 1 when U.L. will leave the E.U.’s single market customs union. However, this bill gives the government the power to change the aspects of the E.U. withdrawal agreement that was signed between both nations earlier this year. Theresa May has spoken against this bill, and the markets have started selling British Pound that ultimately led to a declining GBP/USD pair.

On the data front, the Rightmove Housing Price Index in September rose to 0.2% against the previous -0.2% and supported GBP. On the other hand, the greenback was strong across the board as it regained its safe-haven status amid the increasing concerns over the U.S. stimulus measure. The strength of the U.S. dollar added further pressure on GBP/USD pair on Monday.

 Daily Technical Levels

Support Resistance

1.2737     1.2930

1.2659     1.3045

1.2544     1.3123

Pivot point: 1.2852

GBP/USD– Trading Tip

The GBP/USD traded sharply bearish at 1.2784 support level, having violated the upward channel on the hourly chart. The triple bottom level of 1.2780 is likely to keep the GBP/USD pair supported, and violation of this may lead the Cable towards 1.2727 level. On the higher side, the GBP/USD may drive upward movement until the 1.2840 level. The 50 periods EMA are likely to extend selling until 1.2727 level. The MACD is currently moving into the bullish zone; however, it can be merely for correction. Let’s consider taking a sell trade below 1.2780 level today. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair failed to extend its early-day recovery moves and dropped to a 104.47 level while representing 0.11% losses on the day. However, the currency pair losing streak could be attributed to the downbeat market sentiment, which tends to underpin the safe-haven Japanese yen and contributed to the currency pair declines. Hence, the market trading sentiment was being pressured by the negative comments from the Federal Reserve members. 

Apart from this, the recent resurgence in the pandemic, mainly in Europe and the U.K., also weighing on the market risk tone. Across the pond, the broad-based U.S. dollar weakness, triggered by the multiple factors, could also be considered as a key factor that dragged the currency pair lower. Currently, the USD/JPY currency pair is currently trading at 104.53 and consolidating in the range between 104.47 – 104.75.

However, the market risk tone extended its previous 5-consecutive day selling bias as fears of the coronavirus (COVID-19) resurgence disturbed the global markets. In the meantime, the Federal Reserve members’ downbeat comments also exerted pressure on the global traders. It is worth mentioning that the Fed Chair Jerome Powell said that the economic recovery track remains “highly uncertainty.” Moreover, the Federal Reserve Bank of St. Louis President James Bullard, also delivered a dovish tone while stating that the Fed will be much less pre-emptive about increasing rates.

On the flip side, the renewed tussle between the U.S. and China and Trump’s latest warnings to the firms helping Iran build arms also exerted downside pressure on the market risk-tone. The tension further boosted after the U.S. Secretary of State Mike Pompeo took help from France, Germany, and the U.K. to reject China’s South China Sea claims at the United Nations (U.N.). This, in turn, underpinned the safe-haven Japanese yen and dragged the currency pair lower.

At the coronavirus front, the recent hike in the virus cases, mainly in Europe and the U.K., probes the buyers. As per the World Health Organization’s (WHO) regional director Hans Kluge, Europe reported 300,000 new infections, the most significant weekly rise ever, including the first spike in spring. Meanwhile, the U.K. is also preparing to slap new restrictions, which keeps the market trading ton sluggish and contributed to the currency pair losses.

Across the ocean, the decision-makers from the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) also cited their worries in the latest appearances, which also probe the bulls. This was evident from a bearish sentiment around the equity markets, which underpinned the safe-haven Japanese yen and contributed to the USD/JPY pair’s downfall.

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day amid worries over the U.S. Congress’ stimulus impasse. Furthermore, the concerns about the ever-increasing number of coronavirus cases faded the optimism over the V-shape recovery, which also kept the U.S. dollar under pressure. However, the losses in the U.S. dollar kept the USD/JPY currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies fell to 93.623.

Looking forward, the traders will keep their eyes on the continuous drama surrounding the US-China relations and updates about the U.S. stimulus package. Given the holiday in Japan, due to the Autumnal Equinox Day, coupled with an absence of major data/events, the USD moves and coronavirus headline will be key to watch.

Daily Technical Levels

Support Resistance

104.44     105.10

104.15     105.47

103.78     105.76

Pivot point: 104.81

USD/JPY – Trading Tips

Despite sharp movement in the other currency pairs, the USD/JPY continues to follow the same technical setup. On the 4 hour chart, the downward channel is anticipated to drive selling sentiment in the USD/JPY pair as it provides resistance at the 104.800 level. On the downside, the support lingers at 104.100 level, and a bearish breakout can lead USD/JPY price further lower towards 103.700 level. The eyes will remain on the Fed Chair Powell Testifies as it may drive further market trends. 

Good luck! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 22 – Crypto Sector Plummets Alongside Stocks and Gold; Markets Preparing for the US Presidential Election

The cryptocurrency sector has dropped severely as the traditional markets tumbled and caused the crypto market to do the same. Bitcoin is currently trading for $10,458, representing a decrease of 4.38% on the day. Meanwhile, Ethereum lost 7.68% on the day, while XRP lost 5.87%.

The cryptocurrency sector has dropped severely as the traditional markets tumbled and caused the crypto market to do the same. Bitcoin is currently trading for $10,458, representing a decrease of 4.38% on the day. Meanwhile, Ethereum lost 7.68% on the day, while XRP lost 5.87%.

The cryptocurrency sector has dropped severely as the traditional markets tumbled and caused the crypto market to do the same. Bitcoin is currently trading for $10,458, representing a decrease of 4.38% on the day. Meanwhile, Ethereum lost 7.68% on the day, while XRP lost 5.87%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, only three have actually increased in value. Orchid gained 25.73% on the day, making it the most prominent daily gainer. Loopring (5.88%) and Hyperion (5.03%) also did great. On the other hand, Celo lost 19.17%, making it the most prominent daily loser. It is followed by Uniswap’s loss of 19.04% and Aave’s loss of 16.93%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced an increase since our last report (as it always happens when the market drops), with its value currently being at 61.29%. This value represents a 0.67% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has lost value over the course of the past 24 hours. Its current value is $330.84 billion, which represents a decrease of $21.61 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day in a bearish pullback, which stopped at the 23.6% Fib retracement. However, its current position is just below that line, which makes it possible that it will continue its drop towards $9,300 to $9,500 levels. This push towards the downside was a bit premature, and most likely caused by the traditional market plummeting. Traditional markets have historically been slightly bearish before the presidential election, while they quickly recovered shortly after.

BTC/USD 4-hour Chart

If we take a look at the 4-hour time frame, the largest cryptocurrency by market cap has bounced off of the pink line after failing to break it, pushing further towards the downside, and ultimately breaking the 23.6% Fib retracement level. Bitcoin’s immediate position will be determined by whether it can break the 23.6% Fib retracement, but its overall short-term position is still bearish.

BTC/USD 4-hour Chart

Bitcoin’s short-term technicals have turned bearish as BTC dropped in price. However, its longer-term technicals are still bullish. With that being said, we can expect Bitcoin to drop a bit further before turning towards the upside.

BTC/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • Price is far below its 50-period EMA and its 21-period EMA
  • Price slightly above its bottom Bollinger band
  • RSI is extremely close to being oversold (34.92)
  • Volume is slowly descending from a massive spike
Key levels to the upside          Key levels to the downside

1: $10,630                                 1: $10,500

2: $10,850                                 2: $10,015

3: $11,000                                  3: $9,880

Ethereum

While fundamental traders are calling for ETH’s price increase, most traders that take technical indicators into account are calling for a pullback towards $300. Etherum has lost over 7% of its value in the past 24 hours, with the move towards the downside ending at $340.

ETH/USD 4-hour Chart

Ethereum’s short-term technicals are still extremely bearish, while its mid-term technicals are tilted towards the bear side just a bit. With that being said, we can expect Ethereum to push towards the $300 level, unless Bitcoin pulls out of its bearish sentiment and pushes the market upwards.

ETH/USD 4-hour Technicals

Technical Factors (4-hour Chart):
  • The price is far below both its 21-period and its 50-period EMA
  • The slightly above its bottom Bollinger band
  • RSI is recovering from being oversold (32.42)
  • Volume is descending from its spike during the downswing
Key levels to the upside          Key levels to the downside

1: $360                                     1: $340

2: $371                                     2: $300

3: $400                                      3: $289

Ripple

XRP has spent the day (as almost every single cryptocurrency) pushing towards the downside. While the overall market move seemed premature and looked like it was pushed by the traditional markets, that may not be the case with XRP. If we take a look at the 4-hour chart, XRP’s 4th leg of the Elliot impulse wave has ended, which prompted the price to go towards the downside. Traders can most likely expect XRP’s price pushing towards $0.21.

XRP/USD 4-hour Chart

Taking a look at the technicals, XRP is showing bearish sentiment with both its short-term and long-term indicators. Its indicators change from just bearish to extremely bearish the longer we go in time, which implies an inherent bearishness when it comes to XRP.

XRP/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • The price is well below both its 21-period EMA and its 50-period EMA
  • Price is slightly above its bottom Bollinger band
  • RSI is oversold but recovering (27.50)
  • Volume is coming back to normal after a huge spike (low)
Key levels to the upside          Key levels to the downside

1: $0.235                                   1: $0.227 

2: $0.2454                                 2: $0.221

3: $0.266                                  3: $0.214

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 21 – Top Trade Setups In Forex – Fed Chair Powell in Focus! 

The market’s fundamental side is likely to offer us a Fed Chair Powell Speech later during the New York session. Federal Reserve Chair Jerome Powell is due to speak, along with the rest of the FOMC board members, about rule-making for the Community Reinvestment Act, via satellite. It may drive volatility in the market today.

The market’s fundamental side is likely to offer us a Fed Chair Powell Speech later during the New York session. Federal Reserve Chair Jerome Powell is due to speak, along with the rest of the FOMC board members, about rule-making for the Community Reinvestment Act, via satellite. It may drive volatility in the market today.

The market’s fundamental side is likely to offer us a Fed Chair Powell Speech later during the New York session. Federal Reserve Chair Jerome Powell is due to speak, along with the rest of the FOMC board members, about rule-making for the Community Reinvestment Act, via satellite. It may drive volatility in the market today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18404 after placing a high of 1.18703 and a low of 1.18258. Overall the movement of the EUR/USD pair remained bearish throughout the day. The Euro U.S. Dollar exchange rate dropped on Friday amid the declining U.S. stock and risk sentiment. The Dow Jones Industrial Average dropped by 0.2%, and the Nasdaq Futures also fell from its record high. The risk sentiment was affected by the rising number of coronavirus cases in Europe.

 According to Johns Hopkins University, the number of coronaviruses confirmed cases across the globe have raised to 30 Million, and it raised fears of the second wave of coronavirus. Since the outbreak started in China late last year, the death toll has risen more than 940,000.

After the United States, India, and Brazil, Europe has reached the most confirmed cases as it has seen a renewed spike in the infections. The World Health Organization has also issued a warning that Europe could see many deaths from coronavirus over November and October. This has weighed heavily on the Euro currency, and the EUR/USD pair has been under pressure since then.

The rising number of coronavirus cases in Europe, some European countries imposed new lockdown measures to slow down the virus spread, and it raised fears for a quick economic recovery that also kept the EUR/USD prices on the downside on Friday.

Meanwhile, at 11:00 GMT, the German PPI in August remained flat with a projection of 0.0% on the data front. At 13:00 GMT, the Current Account Balance from Eurozone also showed a surplus of 16.6B against the projection of 12.0B and supported Euro.

On the U.S. front, the Current Account Balance from the U.S. dropped by -171B against the forecasted -158B and weighed on the U.S. dollar. The C.B. Leading Index also declined to 1.2% from the forecasted 1.3%, and the Prelim UoM Consumer Sentiment rose to 78.9 against the forecasted 75.0. The Prelim UoM Inflation Expectations came in at 2.7%. 

Apart from that, the U.S. dollar’s safe-haven status gained traction on Friday after the tensions between the United States and China raised amid the tech war. The U.S. government attempted to ban the Chinese WeChat app’s download in the United States, which was, however, failed due to rejection from the Judge. China may react to such action with anger, and this fear raised safe-haven appeal, and the U.S. dollar advanced that added pressure on EUR/USD prices on Friday.

Daily Technical Levels

Support Resistance

1.1772 1.1889

1.1696 1.1930

1.1655 1.2007

Pivot point: 1.1813

EUR/USD– Trading Tip

The EUR/USD pair trades bullish at 1.1868 level, holding right below an immediate resistance level of 1.1870 that’s extended by a triple top pattern. On the hourly timeframe, a bullish crossover of 1.1870 level may lead EUR/USD prices towards the next target level of 1.1882 level. Conversely, selling bias remains strong below 1.1870 until the 1.1840 level today.

GBP/USD – Daily Analysis

Today in the Asian trading hours, the GBP/USD currency pair extended its previous bullish trend and took some further bids around above the mid-1.2950 level. However, the currency pair’s bullish trend could be associated with the weaker sentiment surrounding the broad-based U.S. dollar ahead of the U.S. Federal Reserve official’s speech. Adding to the U.S. dollar’s problem is its latest tussle with Iran and an on-going tension with Beijing. 

This, in turn, boosted the sentiment around the currency pair. Moreover, the currency pair gains could also be associated with the latest reports that the U.K. Finance Minister Rishi Sunak is again stepping forward to help businesses. On the contrary, the growing worries over a nationwide lockdown in the wake of rising coronavirus cases became the key factor that kept the lid on any additional currency pair gains. Apart from this, the on-going Brexit pessimism also keeps challenging the currency pair bullish bias. Moving on, the currency pair traders seem cautious to place any strong position ahead of the Fed policymakers’ comments during the American session,

The fears of rising COVID-19 cases in the UK, Spain, and some of the notable Asian nations like India continually fueling worries that the economic recovery could be halt, which eventually weighed on the market trading sentiment. Apart from this, the on-going political impasse over the shape and size of the next U.S. fiscal recovery package also played its role in declining equity markets. Elsewhere, the renewed conflict between the U.S. and China and the US-Iran tussle and Trump’s latest warnings to the firms helping Iran build arms also exerted downside pressure on the market risk-tone and underpinned the safe-haven Japanese yen.

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day ahead of the U.S. Federal Reserve official’s speech, which is scheduled to happen later in the week. Besides, the decision over the inclusion of Chinese government bonds in the FTSE Russell World Government Bond Index (RWGBI) also keeps the USD bulls on the defensive. However, the losses in the U.S. dollar kept the GBP/USD currency pair higher. 

At home, the upcoming speech of British Chief Medical Officer Chris Whitty suggests that the coronavirus return is not only halting the economic recovery but also pushes the country towards another lockdown and a “very challenging winter.” On the other hand, London Mayor Sadiq Khan also said that they’re “catching up” with Covid-19 hotspots in northern England. 

Additionally, capping the gains could be the fresh warning by the U.K. Transport Minister Grant Shapps about the rising odds of a nationwide lockdown, as the country’s coronavirus situation is at a critical point. At the Brexit front, the long-lasting Brexit pessimism is still looming over the GBP traders. Having initially showed a willingness to hear the Internal Market Bill (IMB), mainly due to the UK PM Boris Johnson’s offer to ease fisheries, the European Union (E.U.) is repeating the warning if London moves ahead to overcome the Brexit Withdrawal Agreement Bill (WAB). These renewed fears also weighed on the GBP currency.

Looking forward, the Chicago Fed National Activity Index, which is expected 1.95 against 1.18 prior, will be key to watch on the day. Apart from this, the traders will also keep their eyes on the speech from the U.K.’s health authorities, at 10:00 AM GMT will be the key to watch. Whereas, the continuous drama surrounding the US-China relations and updates about the U.S. stimulus package will also be closely followed. 

 Daily Technical Levels

Support Resistance

1.2890 1.3025

1.2810 1.3080

1.2756 1.3160

Pivot point: 1.2945

GBP/USD– Trading Tip

On Monday, the GBP/USD is trading at 1.2941 mark, staying within an upward channel that’s supporting the pair at 1.2909 level. The closing of the recent Doji candle above the EMA and upward trendline support level of 1.2909 level signals chances of upward direction in the market. Thus, traders should consider looking for a buying trade with a target of 1.2996 level. Violation of 1.2909 level can trigger selling bias until 1.2828 level. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair extended its early-day losing streak and hit the intra-day low around the 104.28 regions in the last hours. However, the reason for the currency pair bearish bias could be attributed to the risk-off market sentiment, which tends to underpin the safe-haven Japanese yen and contributed to the currency pair decline. Hence, the market trading sentiment was being pressured by the coronavirus (COVID-19) and downbeat catalysts from America. 

Apart from this, the absence of any major data/events from the rest of the Asia-Pacific nations also kept the currency pair’s performance confined. On the other hand, the broad-based U.S. dollar weakness ahead of the U.S. Federal Reserve officials scheduled to speak could also be considered a key factor that dragged the currency pair lower. 

Elsewhere, the market risk tone has been sluggish since the day started, possibly due to the worsening coronavirus (COVID-19) conditions in the U.K. and Europe. Meanwhile, the renewed conflict between the U.S. and China and the US-Iran tussle and Trump’s latest warnings to the firms helping Iran build arms also exerted downside pressure on the market risk-tone and underpinned the safe-haven Japanese yen. As per the World Health Organization’s (WHO) regional director Hans Kluge, Europe reported 300,000 new infections, the most significant weekly rise ever, including the first spike in spring. Furthermore, France, Poland, the Netherlands, and Spain are facing the second wave. The U.K. is already considering a new lockdown, while countries from Denmark to Greece announced new restrictions on Friday. These headlines add an extra burden on the market risk tone.

Across the ocean, the positive remarks from Chinese President Xi Jinping and hopes of further stimulus for the Asian major under the presidency of Yoshihide Suga might help the market trading sentiment to limit its deeper losses. At the USD front, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day ahead of the U.S. Federal Reserve official’s speech, scheduled to happen later in the week. Besides, the decision over the inclusion of Chinese government bonds in the FTSE Russell World Government Bond Index (RWGBI) also keeps the USD bulls on the defensive. However, the losses in the U.S. dollar kept the USD/JPY currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies fell by 0.16% to 92.870 by 9:55 PM ET (2:55 AM GMT).

Looking forward, the Chicago Fed National Activity Index, which is expected 1.95 against 1.18 prior, will be key to watch on the day. Apart from this, the continuous drama surrounding the US-China relations and updates about the U.S. stimulus package will also be closely followed. In the meantime, the USD moves and coronavirus headlines will not lose their importance as they could play a key role in the currency pair movements.

Daily Technical Levels

Support Resistance

104.44 105.10

104.15 105.47

103.78 105.76

Pivot point: 104.81

USD/JPY – Trading Tips

The USD/JPY pair had disrupted the double bottom support mark of 104.650, and presently it’s holding beneath 50 periods EMA, implying chances of selling bias in the USD/JPY. On the 4 hour chart, the downward channel is anticipated to drive selling sentiment in the USD/JPY pair. On the downside, the support lingers at 104.100 level, and a bearish breakout can lead USD/JPY price further lower towards 103.700 level. The eyes will remain on the Fed Chair Powell’s speech as it may drive further market trends. The MACD and EMA are also in support of selling bias. 

Good luck! 

 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 21 – Crypto Market is Preparing For a Bearish Move; UNI Token Booming

The cryptocurrency sector has mostly stayed at the same place over the weekend as Bitcoin was trying to break the psychological $11,000 resistance. Bitcoin is currently trading for $10,935, which represents an increase of 0.28% on the day. Meanwhile, Ethereum lost 1.58% on the day, while XRP lost 1.27%.

The cryptocurrency sector has mostly stayed at the same place over the weekend as Bitcoin was trying to break the psychological $11,000 resistance. Bitcoin is currently trading for $10,935, which represents an increase of 0.28% on the day. Meanwhile, Ethereum lost 1.58% on the day, while XRP lost 1.27%.

The cryptocurrency sector has mostly stayed at the same place over the weekend as Bitcoin was trying to break the psychological $11,000 resistance. Bitcoin is currently trading for $10,935, which represents an increase of 0.28% on the day. Meanwhile, Ethereum lost 1.58% on the day, while XRP lost 1.27%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, Celo gained an astonishing 45.37% on the day, making it the most prominent daily gainer. ZB Token (33.20%) and DigiByte (15.24%) also did great. On the other hand, HedgeTrade lost 13.52%, making it the most prominent daily loser. It is followed by Flexacoin’s loss of 12.67% and yearn.finance’s loss of 9.63%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced a slight increase since our last report, with its value currently being at 60.62%. This value represents a 0.48% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization stayed at virtually the same place over the weekend. Its current value is $351.13 billion, which represents a decrease of $3.37 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the weekend trying to get past the psychological resistance of $11,000, but failed to do so. The daily chart shows a possible resistance level at the 61.8% Fib retracement from the Head and Shoulders pattern. If that happens, we may expect lows of $9,300 to $9,500.

BTC/USD 4-hour Chart

If we take a look at the 4-hour time frame, Bitcoin fell under the pink ascending line, which is now acting as resistance. However, this resistance is not as strong and may be surpassed with ease. Bitcoin is still struggling and trading within the range bound by $11,000 and $10,850 to the upside and downside, respectively.

BTC/USD 4-hour Chart

Bitcoin’s short-term technicals are showing bullish sentiment, while its mid-term technicals are slightly more bearish. While Bitcoin shows the most bullish sentiment out of the top three cryptocurrencies, we can expect a rebound from the current highs as BTC is unable to gain any meaningful bull push.

BTC/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • Price is above its 50-period EMA and just slightly above its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is flat but overextended to the upside (53.96)
  • Volume is slowly descending
Key levels to the upside          Key levels to the downside

1: $11,000                                 1: $10,850

2: $11,090                                 2: $10,630

3: $11,460                                  3: $10,500

Ethereum

Ethereum’s price has been squeezed out of its current levels over the weekend, pushing it below the yellow bottom support (now resistance) line. However, the bears didn’t do much either, with ETH’s price descent ending after failing to break $371 to the downside. If this level breaks, we can expect a push towards the $360 support level.

ETH/USD 4-hour Chart

Ethereum’s technicals have turned towards the bear side as the price went down. While the DeFi surge should be taken into account, Ethereum looks like it will push towards the downside in the short-term.

ETH/USD 4-hour Technicals

Technical Factors (4-hour Chart):
  • The price is below both its 21-period and its 50-period EMA
  • The price below its middle Bollinger band
  • RSI neutral and stabilizing (45.44)
  • Volume is average (two-candle spike during the downswing)
Key levels to the upside          Key levels to the downside

1: $400                                     1: $371

2: $415                                     2: $360

3: $445                                      3: $340

Ripple

When taking a look at the 1-day chart, XRP has continued its Elliot Wave impulse pattern, nearly ending the fourth part of the wave. It is expected for XRP to push towards the downside (most likely towards $0.21) as a final leg of the impulse wave.

XRP/USD 1-day Chart

XRP spent its weekend in a slow push towards the upside as a continuation of its 4th leg of the impulse wave. With that being seemingly done, we can expect more bears to enter the market quite soon. This prediction is also confirmed by XRP finding much resistance at its 21-period and 50-period moving averages.

Taking a look at its technicals, XRP is (just as Ethereum) tilted towards the sell-side. Unlike Ethereum, however, XRP is showing even more bearish sentiment on longer time frames.

XRP/USD 4-hour Chart

XRP/USD 4-hour Technicals

Technical factors (4-hour Chart):
  • The price is below both its 21-period EMA and its 50-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral and stabilizing (43.93)
  • Volume is average (low)
Key levels to the upside          Key levels to the downside

1: $0.266                                   1: $0.2454 

2: $0.285                                   2: $0.235

3: $0.31                                    3: $0.227

 

Categories
Forex Daily Topic Forex Price Action

Double Top and Evening Star Drive the Price Far Down to Consolidate

In today’s lesson, we are going to demonstrate an example of a double top offering an entry, not right after the breakout. It rather offers an entry upon finding its resistance, which is well below the neckline level. Let us find out how that happens.

In today’s lesson, we are going to demonstrate an example of a double top offering an entry, not right after the breakout. It rather offers an entry upon finding its resistance, which is well below the neckline level. Let us find out how that happens.

In today’s lesson, we are going to demonstrate an example of a double top offering an entry, not right after the breakout. It rather offers an entry upon finding its resistance, which is well below the neckline level. Let us find out how that happens.

The chart shows that the price gets trapped within two horizontal levels. It produces a bearish engulfing candle but heads towards the North upon having a bounce at the level of support. The last candle comes out as a Doji candle around the resistance zone. Let us find out what happens next.

The chart produces a bearish engulfing candle closing well below the neckline. The chart produces an evening star to make the breakout. It suggests that the price may head towards the South with good bearish momentum.

The price heads towards the South with three more candles. However, the price does not consolidate around the neckline. Thus the sellers in the chart may find it difficult to go short in the pair. Let us wait and see whether it consolidates or not.

The chart produces two bullish corrective candles. If the price finds its resistance and produces a bearish reversal candle, the sellers may go short below the last swing low.

The chart produces a bearish engulfing candle closing well below the last swing low. The sellers may trigger a short entry right after the last candle closes by setting stop-loss above the candle’s highest high and by setting take profit with 1R.

The price travels a long way towards the South. The last candle comes out as a bullish inside bar. It is a weak bullish reversal candle. However, the way the price has been heading towards the South; it suggests that the price may continue its bearish move. However, many sellers may want to close their entries and come out with the profit after the last candle.

Usually, traders wait for the price to consolidate and produce a reversal candle at the breakout level. However, when a trend starts with a strong reversal pattern, such as the morning star/evening star, the price may not consolidate around the neckline level. Nevertheless, if the chart allows the price space to travel, traders may wait for the price to consolidate and to get a reversal candle to trade. This is what happens here. The price finds its resistance, not at the neckline but somewhere else, and produces a strong bearish engulfing candle offering an entry.

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 18 – Uniswap’s UNI Token Surges Over 100% After Launch; Bitcoin Continues Fighting For $11,000

The cryptocurrency sector has mostly stayed at the same place as Bitcoin was fighting for the psychological $11,000 resistance. Bitcoin is currently trading for $10,938, which represents an increase of 0.46% on the day. Meanwhile, Ethereum gained 1.8% on the day, while XRP gained 1.33%.

The cryptocurrency sector has mostly stayed at the same place as Bitcoin was fighting for the psychological $11,000 resistance. Bitcoin is currently trading for $10,938, which represents an increase of 0.46% on the day. Meanwhile, Ethereum gained 1.8% on the day, while XRP gained 1.33%.

The cryptocurrency sector has mostly stayed at the same place as Bitcoin was fighting for the psychological $11,000 resistance. Bitcoin is currently trading for $10,938, which represents an increase of 0.46% on the day. Meanwhile, Ethereum gained 1.8% on the day, while XRP gained 1.33%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, |Uniswap gained an astonishing 112.59 % on the day, making it the most prominent daily gainer. ABBC Coin (28.18%) and SushiSwap (21.75%) also did great. On the other hand, Hyperion lost 19.78%, making it the most prominent daily loser. It is followed by Flexacoin’s loss of 12.93% and Celo’s loss of 11.74%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced a slight decrease since our last report, with its value currently being at 60.14%. This value represents a 0.16% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization stayed at the same place in the past 24 hours. Its current value is $354.50 billion, which represents an increase of $0.59 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day trying to confirm its position above $11,000 or to push above it yet again after it dropped below the level. The largest cryptocurrency by market capitalization struggled to cross this psychological resistance but confirmed the $10,850 support, which puts it in a narrow range that traders can use to their advantage.

Bitcoin’s short-term indicators are a bit less bullish than a couple of days ago, as Bitcoin did not manage to break the $11,000 mark. However, its long-term technicals are still extremely tilted towards the upside.

BTC/USD 4-hour Chart

Technical factors:
  • Price is above both its 50-period EMA and 21-period EMA
  • Price is right between its middle and top Bollinger band
  • RSI is flat but overextended to the upside (64.35)
  • Volume is slowly descending
Key levels to the upside          Key levels to the downside

1: $11,000                                 1: $10,850

2: $11,090                                 2: $10,630

3: $11,460                                  3: $10,500

Ethereum

Ethereum has followed its tight movement towards the ascending trend line, which took its price a bit higher than yesterday. Technicals, as well as the influx of people using Ethereum due to UNI token launching, bumped its price up to around 2% towards the upside.

With this being said, Ethereum’s technicals have turned extremely bullish as many traders called for the double bottom that formed, propelling ETH’s price up towards $400.

ETH/USD 4-hour Chart

Technical Factors:
  • The price is above both its 21-period and its 50-period EMA
  • The price slightly closer to its top Bollinger band than the middle one
  • RSI slowly descending (60.41)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $371                                     1: $360

2: $400                                     2: $340

3: $415                                      3: $300

Ripple

XRP has continued its push towards the upside and has continued heading towards the $0.266 resistance level. The steady push has slowed down a bit due to a decrease in volume but has shown no signs of completely stopping. XRP is in quite a good spot now, as many traders are calling for long positions (mostly on the 1-day and 1-week charts).

XRP saw a change of its short-term technicals to extremely bullish, while its mid-term technicals (1-month) are still tilted towards the sell-side. With that being said, more and more traders are slightly less bearish on XRP in the mid-term.

XRP/USD 4-hour Chart

Technical factors:
  • The price is well above its 21-period EMA and its 50-period EMA
  • Price is very close to its top Bollinger band
  • RSI is pushing towards overbought (64.37)
  • Volume is descending
Key levels to the upside          Key levels to the downside

1: $0.266                                   1: $0.2454 

2: $0.285                                   2: $0.235

3: $0.31                                    3: $0.227

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 18 – Top Trade Setups In Forex – Consumer Sentimentin Focus! 

On the news front, the focus will remain on the U.S. Prelim Consumer Confidence and C.B. Leading Index m/m, which are expected to report mixed outcomes and may drive choppy movement in the U.S. dollar. Let’s focus on technical levels today.

On the news front, the focus will remain on the U.S. Prelim Consumer Confidence and C.B. Leading Index m/m, which are expected to report mixed outcomes and may drive choppy movement in the U.S. dollar. Let’s focus on technical levels today.

On the news front, the focus will remain on the U.S. Prelim Consumer Confidence and C.B. Leading Index m/m, which are expected to report mixed outcomes and may drive choppy movement in the U.S. dollar. Let’s focus on technical levels today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.18474 after placing a high of1.18522 and a low of 1.17371. On Thursday, the EUR/USD pair fell in the early trading session to the lowest level since August 12 but managed to reverse its direction and recover its daily losses. The shared currency Euro remained appealing this week and has been driven more by movements in rival currencies like the U.S. dollar. A rise in demand for the U.S. dollar was the primary cause of the EUR/USD pair’s early losses.

In the early trading session, the U.S. dollar saw a jump in demand in reaction to the latest Fed’s decision to keep interest rates near zero until 2023. Fed also decided not to announce any stimulus package that lifted the demand for the greenback. This rise in the U.S. dollar pressured the EUR/USD pair, and the pair saw a sudden decline to its lowest level since mid-August.

After this decision to not add more stimulus to advance the Fed’s goal of spurring inflation, the U.S. stocks fell sharply on Thursday as the risk sentiment faded away. This decreased risk sentiment also added further weakness in the EUR/USD pair. 

The sudden decline in the EUR/USD could also be attributed to the latest warning from the World Health organization that cautioned on Thursday and said that there were alarming rates of transmission of coronavirus across Europe. This warning came in against the shortening quarantine periods from countries across Europe. After this warning, the concerns and fears of a resurgence of coronavirus raised and the local currency suffered that dragged the currency pair on the downside.

However, the Eurozone market outlook remains optimistic due to the bloc’s handling of the coronavirus pandemic. The Eurozone data has not been influencing this week as the Eurozone inflation data released at 14:00 GMT came in line with the expectations of -0.2%. The Final Core CPI for the year also remained flat with a projection of 0.4%. Whereas, the Italian Trade Balance rose to 9.69B against the forecasted 5.20B and supported the shared currency that pushed the EUR/USD pair’s prices on the upside.

Another factor involved in the upward movement of currency pair in the late trading session was the negative macroeconomic data releases from the United States. At 17:30 GMT, the Unemployment Claims from the U.S. last week rose to 860K from the forecasted 825K and weighed on the U.S. dollar. The Building Permits also declined to 1.47M from the projected 1.51M and weighed on the U.S. dollar. The Housing Starts dropped to 1.42M against the forecasted 1.47Mand weighed on the U.S. dollar. These negative reports from the U.S. pushed the pair EUR/USD higher in the late trading session.o increase the 2030 target of emission reduction to 55%, and investment for digital technologies. 

Daily Technical Levels

Support Resistance
1.1772      1.1889
1.1696      1.1930
1.1655      1.2007
Pivot point: 1.1813

EUR/USD– Trading Tip

The EUR/USD pair has traded sharply bullish to trade at 1.1849 level, and now it’s trading sideways within a narrow trading range of 1.1865 level to 1.1849 level. Violation of this range may determine further trends in the market. On the higher side, the EUR/USD can go after the 1.1898 level. Conversely, a bearish breakout of the 1.1840 support level may extend selling bias until the 1.18200 level.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.29723 after placing a high of 1.29990 and a low of 1.28647. Overall the movement of the GBP/USD pair remained flat but slightly bullish throughout the day. On Thursday, the GBP/USD pair extended its bullish streak for 4th consecutive day. However, the gains were very short on Thursday as the pair dropped in the first half of the day amid broad-based U.S. dollar demand. In the second half of the day, the pair bounced back on the upside amid Bank of England’s latest monetary policy decision and weak U.S. economic data.

During the Asian and European trading session on Thursday, the pair faced high pressure due to the broad-based U.S. dollar strength driven by the latest Federal Reserve monetary policy decision. The Fed decided to hold its interest rates near zero until inflation reached 2% or above, projected to reach till 2023. Fed also decided not to announce any stimulus measure against the expectations, so the U.S. dollar rebounded.

The U.S. dollar strength dragged the pair EUR/USD on the downside; however, the pair managed to recover its daily losses and bounced back in the late trading session. The British Pound recovered from session lows on Thursday as the Bank of England kept the rates unchanged. The Bank kept the rates at 0.1% and the asset purchase target at 745B Pound and hinted that it was ready to adjust monetary policy to meet to support the recovery. 

As per the Bank of England, the U.K. economic data justified that Bank’s policies supported the recovery and acknowledged that GDP and inflation had recently been running above the estimates given in the August monetary policy report. However, despite the faster pace of economic recovery in the U.K., the Bank left the door open for negative interest rates as additional policy measures to keep the economy on track if the second wave of coronavirus emerged and affect the labor market that could trigger the slowdown.

The less dovish comments from BoE and cooling expectations that easing in November was a forgone conclusion raised the British Pound, and the pair GBP/USD started moving in an upward direction. Furthermore, the U.S. dollar came under pressure on the data front after the negative macroeconomic data releases on Thursday. The Unemployment claims from the U.S. rose during last week to 860K against the expectations of 825K and weighed on the U.S. dollar. The Building Permits also declined along with the Housing Starts in August to 1.47M and 1.42M, respectively. These negative economic figures also helped the GBP/USD pair to move on the upside and recover its early losses.

On the other hand, on the Brexit front, the Pound got an unexpected boost from the latest comments from E.U. Commission President Ursula von der Leyen, who said that she believes a trade deal with the U.K. was still possible despite the distraction caused by Boris Johnson’s Internal Market Bill. These comments also helped the GBP/USD pair to reverse its early daily movement on Thursday.

 Daily Technical Levels

Support Resistance
1.2890      1.3025
1.2810      1.3080
1.2756      1.3160
Pivot point: 1.2945

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.2945 level, holding within an upward channel supporting the pair at 1.2909 level. The closing of the recent Doji candle over the EMA and upward trendline support level of 1.2909 level suggests odds of upward movement in the market. Considering this, we may have some upward trend in the Sterling ahead of the BOE rate decision. Thus, we should look for a buying trade with a target of 1.2996 level. Violation of 1.2909 le el can trigger selling bias until 1.2828 level.

 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.737 after placing a high of 105.172 and 104.523. The pair USD/JPY extended its losses for the 4th consecutive day on Thursday and dropped to its lowest level since July 31 on the strong demand for the Japanese Yen. The pair was rather unaffected by the modest pickup in the U.S. dollar demand after the Federal Reserve kept its rates neat zero for likely until 2023 and refrained from announcing further monetary stimulus package.

On late Wednesday, the global risk sentiment was hit after the Fed failed to offer any clues about additional stimulus measures with the S&P 500 index down by 0.6% on the day. The Fed also upgraded its economic outlook and projected a much shallower contraction in 2020. This supported the rise in the U.S. dollar; however, it failed to impress the USD/JPY pair’s bullish traders as the focus was shifted to Japan’s monetary policy.

On Thursday, the Bank of Japan left its aggressive monetary stimulus on hold and upgraded its view of the pandemic-hit economy. The Bank of Japan announced its monetary policy decision a day after Mr. Yoshihide Suga took over as Prime Minister and pledged to continue his predecessor’s stance on monetary and fiscal policy.

As expected, the Bank of Japan kept its interest rates at -0.1% and left its asset purchases unchanged. Mr. Suga said that there was no need for any immediate changes in BOJ policies as they have helped to keep the financial markets stable and get credit to companies amid the coronavirus crisis. The Central Bank’s economic assessment was upgraded for the first time on Thursday since the coronavirus hit the economy and sent it to the bottom. BOJ said that economy has started to pick up with activity resuming gradually. However, the pace for recovery was likely to be only moderate as the pandemic is continuously affecting the countries worldwide. The BOJ decision came after hours the Federal Reserve unveiled its latest policy guidance, and the traders followed more the BOJ’s statement as it was the latest and the pair USD/JPY continued declining. 

Another reason behind the decreased USD/JPY prices was the negative and depressing U.S. economic data on Thursday. At 17:30 GMT, the Philly Fed Manufacturing Index remained unchanged and came as expected 15.0. The Unemployment Claims last week advanced to 860K against the anticipated 825K and weighed on the U.S. dollar. In August, the Building Permits also dropped to 1.47M from the forecasted 1.51M, and the Housing Starts declined to 1.42M from the expected1.47M and weighed on the U.S. dollar. The weak U.S. economic data weighed on the U.S. dollar and added further in the USD/JPY pair’s losses on Thursday.

Daily Technical Levels

Support Resistance
104.44      105.10
104.15      105.47
103.78      105.76
Pivot point: 104.81

USD/JPY – Trading Tips

The USD/JPY pair had violated the double bottom support level of 107.750, and now it’s holding below 50 periods EMA, suggesting odds of selling bias in the USD/JPY. On the 4 hour timeframe, the downward channel is likely to drive selling bias in the USD/JPY pair. On the lower side, the support stays at 104.500 level, and a bearish breakout can lead USD/JPY price further lower towards 104.300 level. The focus will remain on the Prelim UoM Consumer Sentiment data as it may drive further market trends. The MACD and EMA are also in support of selling bias. 

Good luck! 

 

 

Categories
Forex Videos

How to read a volatile chart! EURUSD Price Analysis…

https://youtu.be/KCPaLes7U6k

https://youtu.be/KCPaLes7U6k

How to read a volatile chart: EURUSD Price Analysis for 13th August 2020

Thank you for joining this forex academy educational video. In this session, we will look at one of the most frustrating things that a trader will find and about a complete turn in price action, which does not necessarily go with technical analysis.


This is a one-hour chart of the euro US dollar pair, and I’m interested in the period between the 12th and 13th of August.
We can see that at position A, on the 11th August, the price action high, is at the same level as on the 10th of August, suggesting a price action double top reversal formation, and indeed the market reacts accordingly, and price action begins to fade back to position B, which breaches the previous lows going all the way back to the beginning of August, suggesting that the bears were in control of the pair, and price action might continue lower into the high 1.16’s
However, frustratingly for those sellers, the price could not be maintained in the downward direction and then completely reverses, retesting the high at position ‘A’ and finally breaching it to the upside, and where now we might expect a retest of the 1.19 level.


So, what is going on here where our chart suggests the bears are in control, and then all of a sudden, during the Asian session on the 12th of August, things just completely reverse, and the pair is driven higher?
One of the main factors to consider during the current economic crisis throughout the world caused by the global covid pandemic is the continuous change in sentiment for one country against the next, which at the moment is causing such a volatility and where the market can turn for no apparent reason with regards to technical analysis.


This pair was simply unable to bridge the 1.1700 key level, and this became a significant turning point. Key level trading such as round numbers can often reverse an exchange rate in its tracks, and that is what happened on this occasion. However, we must also take into account market sentiments, and a critical component of this reversal was the continuing spat between the democrats and republicans of the United States Congress who have so far not been able to come to a solution with regard to the continuation of the covid relief fund, which expired the previous Friday, leaving millions of Americans wondering how they are going to cope financially without the support that they had been relying on in the last few months.
Until such time as the Americans have got their act together and implement extra financial relief, we can expect more market volatility and a weakening United States dollar. Watch out for key number reversals and spikes in price action, where technical analysis must be used in combination of market sentiment while keeping fundamentals in the background and remembering that these are not the key market drivers during the continuing crisis. Keep informed with up-to-date news, especially pertaining to the United States covid relief status. And Keep stops tight.

Categories
Forex Market Analysis

Daily F.X. Analysis, September 17 – Top Trade Setups In Forex – Brace for BOE Policy! 

On the news front, the eyes will remain on the U.K. Monetary Policy reports due during the late European hours. BOE isn’t expected to change the rates, and it may keep them at 0.10%; however, it will be important to see MPC Official Bank Rate Votes. Besides, the European Final CPI data will remain in focus today. During the U.S. session, the Unemployment Claims and Philly Fed Manufacturing Index will be the main highlight to drive further market movement.

On the news front, the eyes will remain on the U.K. Monetary Policy reports due during the late European hours. BOE isn’t expected to change the rates, and it may keep them at 0.10%; however, it will be important to see MPC Official Bank Rate Votes. Besides, the European Final CPI data will remain in focus today. During the U.S. session, the Unemployment Claims and Philly Fed Manufacturing Index will be the main highlight to drive further market movement.

On the news front, the eyes will remain on the U.K. Monetary Policy reports due during the late European hours. BOE isn’t expected to change the rates, and it may keep them at 0.10%; however, it will be important to see MPC Official Bank Rate Votes. Besides, the European Final CPI data will remain in focus today. During the U.S. session, the Unemployment Claims and Philly Fed Manufacturing Index will be the main highlight to drive further market movement.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.18161 after placing a high of 1.18824 and a low of 1.17873. The EUR/USD pair continued following its previous day bearish trend on Wednesday ahead of the FOMC meeting. The pair posted losses on the day despite upbeat macroeconomic data from Europe.

The U.S. dollar became strong in response to the Federal Reserve’s rate decision. The Fed left its monetary policy unchanged and signaled no changes to borrowing costs potentially through 2023. The growth projections by Fed pointed a return to pre-pandemic levels by the end of 2021.

The Federal Reserve Chairmen, Jerome Powell, said that the current bond-buying level was appropriate and said that more fiscal support was likely to be needed. The U.S. dollar index found support at 92.8 level and spiked to 93.15 level and weighed on EUR/USD pair.

On the data front, At 14:00 GMT, the Trade Balance from the Eurozone showed a surplus of 20.3B against the forecasted 19.3B in July and supported single currency Euro. However, the upbeat data failed to reverse the pair’s movement as the focus was all on the FOMC meeting and Fed decision.

On the U.S. front, the Core Retail Sales in August declined to 0.7% from the forecasted 1.0%, and the Retail Sales in August also dropped to 0.6% from the projected 1.2% and weighed on the U.S. dollar. Whereas, the Business Inventories in July dropped to 0.1% from the projected 0.2% and supported the U.S. dollar. The NAHB Housing Market Index advanced to 83 from the anticipated 78 and supported the U.S. dollar. The mixed macroeconomic data from the U.S. also failed to impact on EUR/USD prices on Wednesday.

As the WHO has warned that the death toll in Europe is likely to increase in October and November, the local currency has come under pressure since then. On Wednesday, the regional health authorities announced that Madrid’s Spanish capital would introduce selective lockdowns in urban areas where the coronavirus has spread widely. This also weighed on local currency and added further pressure on EUR/USD pair.

On Wednesday, the European Commission President Ursula von der Leyen came to the European Parliament in Brussels to deliver her first state of European Union Address. She announced new plans that included measures to tear down single market restrictions, a new strategy for the Schengen zone, a proposal to increase the 2030 target of emission reduction to 55%, and investment for digital technologies. 

Daily Technical Levels

Support Pivot Resistance
1.1773 1.1828 1.1869
1.1732 1.1924
1.1676 1.1966

EUR/USD– Trading Tip

The EUR/USD pair has traded sharply bearish at 1.1750 area, and now the same level is extending solid support to the pair. On the higher side, the EUR/USD may soar until 1.1780 level that marks 38.2% Fibo and 1.1810 level of 61.8% Fibonacci retracement. Conversely, the support stays at 1.1699 level today.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.29666 after placing a high of 1.30070 and a low of 1.28749. Overall the movement of the GBP/USD pair remained bullish throughout the day. The pair GBP/USD extended its previous daily gains and rose above 1.3000 level on Wednesday amid dovish hopes for the FOMC meeting. The strong CPI report from the U.K. negative Retail Sales report from the U.S. also added further gains in the GBP/USD pair on Wednesday.

As investors have digested the recent developments surrounding Brexit and the internal market bill, the heavy tone surrounding the U.S. dollar also helped the GBP/USD pair to surgeon Wednesday. The heavy bearish pressure on the U.S. dollar was exerted by the release of disappointing U.S. monthly Retail Sales figures for August.

At 17:30 GMT, the Core Retail Sales dropped to 0.7% from the anticipated 1.0%, and the Retail Sales were declined to 0.6% from the projected 1.1% and weighed heavily on the U.S. dollar that helped GBP/USD pair to move on the upside. Meanwhile, from the U.K., at 11:00 GMT, the Consumer Price Index for the year rose to 0.2% from the expected 0.1% and supported the Sterling. The Core Consumer Price Index also rose to 0.9% from the expected 0.7% and supported British Pound.

Whereas the PPI Input in August was declined to -0.4% from the forecasted 0.1%, and the PPI Output also declined to 0.0% against the forecasted 0.2% and weighed on local currency. The year’s RPI declined to 0.5% from the expected 0.6% and weighed on British Pound. However, the Housing Price Index for the year rose to 3.4% from the projected 3.2% and supported British Pound that added further gains in GBP/USD pair.

On the Brexit front, the head of the European Commission said on Wednesday that the chances of reaching a trade deal with Britain were fading by the day as the British government pushes ahead with moves that would breach their withdrawal agreement.

Brussels have warned Prime Minister Boris Johnson to scrap the Internal Market Bill, or it would sink the talks on future trade arrangements before Britain finally leaves the E.U.’s orbit on December 31. However, Johnson has refused to step back from issuing an Internal Market Bill. 

The President of the European Commission, Ursula von der Leyen, said that the timely agreement’s chances have started to fade with the time passing, which raised the fears on no-deal Brexit. However, this failed to cap the additional gains in GBP/USD pair as markets have already priced the no-deal Brexit worries. Moreover, the U.S. dollar was also under pressure on Wednesday ahead of FOMC meeting results and the speech of Fed Chair Jerome Powell. This added further strength in the GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.2890 1.2949 1.3024
1.2815 1.3083
1.2757 1.3157

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.2909 level, holding within an upward channel supporting the pair at 1.2909 level. The closing of the recent Doji candle over the EMA and upward trendline support level of 1.2909 level suggests odds of upward movement in the market. Considering this, we may have some upward trend in the Sterling ahead of the BOE rate decision. Thus, we should look for a buying trade with a target of 1.2996 level. Violation of 1.2909 le el can trigger selling bias until 1.2828 level, but it depends upon the policy decision today. Let’s keep an eye on it. 

 

USD/JPY – Daily Analysis

The USD/JPY Pair was closed at 104.944 after placing a high of 105.432 and a low of 104.799. Overall the movement of the USD/JPY pair remained bearish throughout the day. The pair USD/JPY extended its bearish trend for the 3rd consecutive day and fell to its lowest since July 31. The U.S. Dollar Index fell 0.3% on Wednesday ahead of the U.S. Federal Reserve policy meeting outcome.

The decline in the U.S. dollar was due to the expectations that the Federal Reserve Open Market Committee will maintain a dovish stance on the economy’s outlook. Last month during the Fed’s annual Jackson Hole Symposium, the Federal Reserve unveiled a major change in policy and said it would now target an inflation rate that averages 2% over time. Previously the Fed’s target was to maintain inflation at 2%; the current U.S. consumer inflation is at 1.3%.

The Market Participants do not expect any rise in the Fed’s benchmark interest rate of 0.25% for a longer period; however, they were keenly awaiting the meeting to conclude whether the central bank issues any surprise economic projections. The dovish expectations kept the local currency under pressure that weighed on the USD/JPY pair on Wednesday.

Meanwhile, the Trade Balance from Japan showed a surplus of 0.35T from the anticipated 0.01T and supported the Japanese Yen that added further pressure on the USD/JPY pair on the data front. On the U.S. side, the Core Retail Sales in August fell to 0.7% from the anticipated 1.0% and weighed on the U.S. dollar that exerted further pressure on the USD/JPY pair. In August, the Retail Sales also fell to 0.6% from the anticipated 1.1% and weighed on the U.S. dollar that kept the pair USD/JPY on the downside.

However, in July, the Business Inventories that were released at 19:00 GMT dropped to 0.1% from the forecasted 0.2% and supported the U.S. dollar. The NAHB Housing Market Index also favored the U.S. dollar when it rose to 83 from the anticipated 78 and capped further downward movement in the USD/JPY pair.

On Wednesday, the U.S. President Donald Trump urged Republicans to hold a larger coronavirus package as this will increase the chances of striking a deal with Democrats. The comments from Trump showed a need for stimulus and raised hopes that the stimulus package will be announced soon, and hence, the U.S. dollar came under fresh pressure that ultimately weighed on USD/JPY pair prices.

On the other hand, the USD/JPY pair’s losses were limited by the latest news that supported the risk sentiment in the market. The U.S. Federal Government drew a sweeping plan on Wednesday to make vaccines for the coronavirus available for free to all Americans. The federal health agencies and the Defense Department offered plans for a vaccination campaign that will start in January or later this year. The market participants are waiting for his speech to find fresh clues about the economic condition and further monetary policy decisions by the U.S. government. Hence, the local currency remained under pressure ahead of it and kept weighing the USD/JPY currency pair.


Daily Technical Levels

Support Pivot Resistance
104.6700 105.0600 105.3300
104.4100 105.7100
104.0200 105.9800

USD/JPY – Trading Tips

The USD/JPY pair had violated the double bottom support level of 105.300 level, and closing of the candle below 105.300 level may drive more selling bias in the USD/JPY. On the lower side, the support stays at 104.780 level, and a bearish breakout can lead USD/JPY price further lower towards 104.300 level. The focus will remain on the U.S. Jobless claims data as it may drive further market trends. The MACD and EMA are also in support of selling bias. 

Good luck! 

 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 17 – Bitcoin Above $11,000; XRP Skyrocketing

The cryptocurrency sector has shot up as Bitcoin pushed towards $11,000. Most cryptos ended up in the green, with some even outperforming Bitcoin. Bitcoin is currently trading for $11,019, which represents an increase of 2.72% on the day. Meanwhile, Ethereum gained 5.58% on the day, while XRP gained an astonishing 7.24%.

The cryptocurrency sector has shot up as Bitcoin pushed towards $11,000. Most cryptos ended up in the green, with some even outperforming Bitcoin. Bitcoin is currently trading for $11,019, which represents an increase of 2.72% on the day. Meanwhile, Ethereum gained 5.58% on the day, while XRP gained an astonishing 7.24%.

The cryptocurrency sector has shot up as Bitcoin pushed towards $11,000. Most cryptos ended up in the green, with some even outperforming Bitcoin. Bitcoin is currently trading for $11,019, which represents an increase of 2.72% on the day. Meanwhile, Ethereum gained 5.58% on the day, while XRP gained an astonishing 7.24%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, DigiByte gained 23.07% on the day, making it the most prominent daily gainer. Hyperion (19.61%) and Kusama (11.85%) also did great. On the other hand, SushiSwap lost 15.68%, making it the most prominent daily loser. It is followed by Flexacoin’s loss of 11.46% and UMA’s loss of 11.43%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced a slight decrease since our last report, with its value currently being at 60.30%. This value represents a 0.21% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up significantly in the past 24 hours. Its current value is $353.89 billion, which represents an increase of $10.48 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has, as we said in our previous article, pushed towards the upside, attempting an $11,000 break. While it has broken the $11,000 psychological resistance, it got stopped out at the $11,090 resistance level. Bitcoin will have to make a confirmation move in order to stay above $11,000, which may be hard since it will be in such a tight range ($11,000 to $11,090).

Bitcoin’s short-term indicators are extremely bullish, but its longer-term indicators are also tilted towards the bull side. Traders should look out for how Bitcoin handles the $11,000 level and trade off of it.

BTC/USD 4-hour Chart

Technical factors:
  • Price is above both its 50-period EMA and 21-period EMA
  • Price is near its top Bollinger band
  • RSI is overextended to the upside (71.42)
  • Volume is stable (with a couple of spikes)
Key levels to the upside          Key levels to the downside

1: $11,000                                 1: $10,850

2: $11,090                                 2: $10,630

3: $11,460                                  3: $10,500

Ethereum

As we said in our previous article, it would take a strong push towards the upside to pull Ethereum out of the 35% downside prognosis, which many trades called since the ETH/USD pair created a bear flag. However, Bitcoin’s push towards $11,000 prompted Ethereum to push towards the upside and get back into the range.

With this being said, Ethereum hasn’t confirmed its position above the bear flag lower line, which is because the $371 level it passed will remain in our “key level to the upside” section until ETH confirms otherwise. Still, its short-term indicators have changed to a bit more bullish scenario.

ETH/USD 4-hour Chart

Technical Factors:
  • The price is above both its 21-period and its 50-period EMA
  • The price is right at its top Bollinger band
  • RSI is neutral but pushing towards the upside (59.82)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $371                                     1: $360

2: $400                                     2: $340

3: $415                                      3: $300

Ripple

XRP had an amazing day, with its price pushing over 7% on the day. The third-largest cryptocurrency by market cap has used this influx of bulls to its fullest, confirming its position above $0.2454 and even pushing towards $0.266.

XRP has joined Ethereum in terms of technicals, with the short-term overview changing to a short-term buy, while its long-term technicals are still showing slight bearishness. Traders can look for a pullback that XRP will inevitably make and trade off of it.

XRP/USD 4-hour Chart

Technical factors:
  • The price is above its 21-period EMA and its 50-period EMA
  • Price is above its top Bollinger band
  • RSI is skyrocketing and pushing towards overbought (67.99)
  • Volume is low (but slowly increasing)
Key levels to the upside          Key levels to the downside

1: $0.266                                   1: $0.2454 

2: $0.285                                   2: $0.235

3: $0.31                                    3: $0.227

 

Categories
Forex Signals

Gold Trades Choppy Ahead of FOMC – Ascending Triangle in Play! 

During Wednesday’s Asian trading session, the yellow metal prices extended its overnight buying bias and gathered some pace around the two-week tops above 1,960. The massive offered tone surrounding the greenback was seen as one of the major factors that helped the dollar-denominated commodity gold. However, the weaker tone around the U.S. dollar was mainly driven by the ongoing risk-on mood, which eventually undermined the safe-haven U.S. dollar. Besides, the U.S. dollar bearish bias could also be associated with traders’ cautious mood ahead of the Federal Open Market Committee (FOMC) meeting. Apart from this, the market trading sentiment was being supported by the news suggesting the AstraZeneca’s restart of the coronavirus (COVID-19) vaccine trials.

During Wednesday’s Asian trading session, the yellow metal prices extended its overnight buying bias and gathered some pace around the two-week tops above 1,960. The massive offered tone surrounding the greenback was seen as one of the major factors that helped the dollar-denominated commodity gold. However, the weaker tone around the U.S. dollar was mainly driven by the ongoing risk-on mood, which eventually undermined the safe-haven U.S. dollar. Besides, the U.S. dollar bearish bias could also be associated with traders’ cautious mood ahead of the Federal Open Market Committee (FOMC) meeting. Apart from this, the market trading sentiment was being supported by the news suggesting the AstraZeneca’s restart of the coronavirus (COVID-19) vaccine trials.

During Wednesday’s Asian trading session, the yellow metal prices extended its overnight buying bias and gathered some pace around the two-week tops above 1,960. The massive offered tone surrounding the greenback was seen as one of the major factors that helped the dollar-denominated commodity gold. However, the weaker tone around the U.S. dollar was mainly driven by the ongoing risk-on mood, which eventually undermined the safe-haven U.S. dollar. Besides, the U.S. dollar bearish bias could also be associated with traders’ cautious mood ahead of the Federal Open Market Committee (FOMC) meeting. Apart from this, the market trading sentiment was being supported by the news suggesting the AstraZeneca’s restart of the coronavirus (COVID-19) vaccine trials.

Meanwhile, the risk-on sentiment was further bolstered by the University Of Pittsburgh School Of Medicine’s positive news, where experts produced the strongest antibody component for the coronavirus tested over animals. These positive headlines became the key factor that kept the lid on any further yellow metal gains. On the contrary, the Sino-US trade area and coronavirus woes flashed mixed signals, which keep challenging the market risk-on sentiment. Gold prices are currently trading at 1,966 and consolidating in the range between 1,949.99 – 1,962.97. Moving on, the market traders seem reluctant to place any strong position ahead of the U.S. Federal Reserve’s policy meeting, which is due to happen on the day. 

Despite the COVID-19’s ongoing global spread and the Sino-American tussle, not to forget the fears of no-deal Brexit, the market trading sentiment extended its early-day positive tone and remained supportive by the positive data from the U.S. and China, which suggesting gradual recoveries in the global economics from China and the U.S. At the data front, China’s Industrial Production and Retail Sales surpassed forecasts for August, the U.S. NY Empire State Manufacturing Index also recovered to 17.00 and pleased the optimists. 

Apart from this, the reasons for the risk-on market trading sentiment could also be attributed to the positive headlines concerning the coronavirus vaccine. The AstraZeneca showed readiness for resuming its vaccine trials after a brief “routine” pause, while the Pfizer is confident about getting the cure of the pandemic by the year’s end. Furthermore, the latest news came from the University Of Pittsburgh School Of Medicine, wherein the scientists produced the strongest antibody component for the pandemic. This, in turn, underpinned the market trading sentiment and kept the lid on any further gains in the gold prices.

Across the pond, the tussle between the US-China flashed mixed signals as the Trump administration quietly eased warning towards China and Hong Kong. Whereas, the Dragon Nation extended tariff relief for U.S. imports. This, in turn, the U.S. rolled back the decision to ban some of the productions from Xinjiang. Despite this, the relationship between US-China turned sour after the World Trade Organization (WTO) ruled against the Trump administration’s decision to levy multiple trade sanctions on China. These mixed headlines might exert downside pressure on the market trading sentiment, which could help further the safe-haven assets.

The broad-based U.S. dollar failed to keep its overnight gains and edged lower on the day, mainly due to the risk-on market sentiment. Moreover, the U.S. dollar losses could also be associated with cautious sentiment ahead of the U.S. Federal Reserve’s policy meeting, which is scheduled to take place on the day. It is worth mentioning that the Fed will speak later to hand down its policy decision; as we know, this will be its first meeting since Fed Chairman Jerome Powell announced a more relaxed approach to inflation at the Jackson Hole symposium August 27. However, this stance is broadly expected to be continued and could undermine the U.S. dollar by introducing further stimulus measures. At the coronavirus front, the ongoing rise in COVID-19 cases globally continues to fuel worries concerning the global economic outlook for the foreseeable future.


Looking ahead, the market traders will keep their eyes on Japan’s trade numbers and Aussie housing data. Whereas, investors are also looking to the U.S. Federal Reserve’s policy meeting, scheduled to take place on the day. Meanwhile, New Zealand’s Current Account and the Pre-Election Economic and Fiscal Update (PREFU) will also key to watch. All in all, the updates surrounding the Brexit, virus, and US-China tussle will not lose their importance. 

The yellow metal gold traded sharply bullish amid weaker U.S. dollar to trade at 1,961 level. On the higher side, the gold prices may continue to trade bullish until 1,970 and 1,985 and 1,994 resistance levels. On the lower side, the gold may gain support at 1,963 and 1,955 levels. Overall, the trading bias seems bullish. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 16 – Top Trade Setups In Forex – Eyes on FOMC Fed Fund! 

On the news front, the eyes will remain on the FOMC Statement and Federal Funds Rate, which is not expected to show a rate change but will help us understand U.S. economic situation and policymakers’ stance on it. Besides, the Inflation reports from the U.K. and Eurozone are also likely to drive some price action during the European session today.

On the news front, the eyes will remain on the FOMC Statement and Federal Funds Rate, which is not expected to show a rate change but will help us understand U.S. economic situation and policymakers’ stance on it. Besides, the Inflation reports from the U.K. and Eurozone are also likely to drive some price action during the European session today.

On the news front, the eyes will remain on the FOMC Statement and Federal Funds Rate, which is not expected to show a rate change but will help us understand U.S. economic situation and policymakers’ stance on it. Besides, the Inflation reports from the U.K. and Eurozone are also likely to drive some price action during the European session today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.18461 after placing a high of 1.19003 and a low of 1.18393. Overall the movement of the EUR/USD pair remained bearish throughout the day. After rising for four consecutive days, the EUR/USD pair fell on Tuesday amid renewed safe-haven appeal for the U.S. dollar despite the strong Eurozone data. The EUR/USD turned negative for the day as the greenback managed to trim losses versus Euro as the latest statement from WTO weighed down the risk sentiment.

On Tuesday, the World Trade Organization ruled that the U.S. tariffs imposed on Chinese goods in 2018 that led to trade war were inconsistent with international trade rules. The WTO said that the U.S. did not provide evidence that its claims of China’s unfair technology theft and state aid justified the border taxes. 

The U.S. condemned and called WTO inadequate to the task of confronting China while Chinese officials cheered the ruling. Due to its safe-haven status on such news and weighed on EUR/USD pair on Tuesday, the U.S. dollar gained due to its safe-haven status.

On the data front, at 11:45 GMT, the French Final CPI in August remained flat with the expectations of -0.1%. At 14:00 GMT, the ZEW Economic Sentiment for Eurozone rose in September to 73.9 from the forecasted 63.0 and Euro. The German ZEW Economic Sentiment in September also rose to 77.4 from the forecasted 69.7 and supported the single currency. These positive reports from Eurozone gave the Euro strength and capped further losses in EUR/USD pair.

On the U.S. front, the Empire State Manufacturing Index for August rose to 17.0 from the projected 6.2 and supported the U.S. dollar that added further losses in EUR/USD pair. The Import Prices in August also advanced to 0.9% from the anticipated 0.5% and supported the losses of the EUR/USD pair.

On Tuesday, the U.S. Dollar Index (DXY) erased its previous losses and rose to 93.00 and was up by 0.6% on Tuesday. On the other hand, the Euro was weak against the U.S. dollar; hence, the pair EUR/USD came under pressure. Another factor involved in the sudden fall of EUR/USD pair prices was the World Health Organization’s latest warning. The WHO warned on Monday that Europe would face a rising death toll from the coronavirus during the autumn months as the number of daily infections worldwide reached a high record. This raised the fears and weighed on risk sentiment that dragged the EUR/USD pair on the downside.

Daily Technical Levels

Support Pivot Resistance
1.1821 1.1861 1.1883
1.1799 1.1923
1.1760 1.1945

EUR/USD– Trading Tip

The EURUSD pair is bouncing off the support level of 1.1835 level, and now it’s trading at 1.1845 level. For now, the EUR/USD may find support at 1.1815 level, and above this, the continuation of a bullish trend may lead EUR/USD price until 1.1903 level. Bearish correction can be seen until 1.1815 and 1.1764 support levels.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.28885 after placing a high of 1.29262 and a low of 1.28145. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair on Tuesday rose and extended its previous day’s bullish track on the back of positive macroeconomic data from the U.K. despite the strong rebound of the U.S. dollar in the market. However, the gains were limited as the issue of the internal market bill was still intact.

The GBP/USD pair rose on the strong U.K. jobs data on Tuesday when at 11:00 GMT, the Claimant Count Change from the U.K. dropped in August to 73.7K from the forecasted 99.5K and supported a single currency, the British Pound.

The Average earning Index for the quarter came in as -1.0% against the forecasted -1.3% and supported the British Pound that helped GBP/USD to gain traction. The Unemployment Rate in July remained flat with expectations of 4.1%.

The strong jobs report from the U.K. gave strength to the local currency Sterling and helped the pair rise for the second consecutive day. 

Meanwhile, the U.S. dollar was also strong on the board after the WTO ruled the U.S. tariffs as illegal on Chinese goods imposed in 2018 and triggered the US-China trade war. The U.S. dollar’s safe-haven status supported the greenback and the capped further gains in GBP/USD pair on Tuesday.

Moreover, the mixed U.S. macroeconomic data also helped the GBP/US pair to post gains on Tuesday. At 17:30 GMT, the Import Prices in August rose by 0.9% from the forecasted 0.5% and supported the U.S. dollar. While, at18:15 GMT, the Industrial Production from the U.S. in August fell to 0.4% from the forecasted 1.2% and weighed on the U.S. dollar. The Capacity Utilization Rate also dropped to 71.4% from the expected 71.7% and weighed on the U.S. dollar that ultimately supported the GBP/USD pair’s strength on board.

Furthermore, the concerns related to the availability of coronavirus testing in the country have been raised as the hospital staff has warned about the situation. However, Prime Minister Boris Johnson has unveiled an “Operation Moonshot” that aimed to test 10 million people every day for the coronavirus and restore life to normal by winter.

The U.K. also struggled to impose the latest “rule of six” limit on social gathering as the crime minister urged neighbors to report for any suspected breach of the new rule. This comes after the U.K.’s reproduction or R number escalated between 1 and 1.2 for the first time since March. These ongoing virus updates also capped further upside momentum in GBP/USD pairs.

However, on the Brexit front, the main sticking point, for the time being, was that whether the U.K. will go back on its word over the custom territory in Northern Ireland. The Internal Market bill is undervotes through the House of Commons and the House of Lords. It is not clear whether the bill will pass, but it will break the international law if it does. A deal between the E.U. and the U.K. will still be possible, but it would represent a lack of trust and could impact the future relationship of E.U. & U.K.

 Daily Technical Levels

Support Pivot Resistance
1.2825 1.2876 1.2937
1.2763 1.2989
1.2712 1.3050

GBP/USD– Trading Tip

The GBP/USD traded sharply lower at 1.2843 level, and now it’s forming a Doji candle, which may trigger buying in the GBP/USD pair. On the higher side, the Sterline may soar to target 1.2928 level, and even above this, the next target for Sterling can be 1.3033 level. The MACD and EMA are still supporting a selling bias; therefore, we should be looking to take selling entry below 1.2928 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.440 after placing a high of 105.812 and 105.299. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair extended its losses and dropped to its 2-weeks lowest level near 105.200 ahead of the FOMC meeting. The U.S. Dollar Index fell to 92.85 on Tuesday and lost 0.22% as the U.S.’s major equities were higher with the S&P 500 up by 0.7%.

The USD/JPY pair came under fresh pressure after the latest comments from WTO and WHO on Tuesday. China’s upbeat data also boosted risk sentiment, but the market traders ignored it, and the pair USD/JPY continued its downward movement. On Tuesday, the World Trade Organization ruled that the tariffs imposed in 2018 on Chinese goods by the United States were inconsistent with the international rules. This raised the uncertainty and safe-haven appeal, and the Japanese Yen gained traction that ultimately weighed on the USD/JPY pair.

The top American trade Ambassador, Robert Lighthizer, said that the U.S. must be allowed to defend itself against unfair trade practices and that WTO was inadequate with its task to confront China. Whereas, Chinese officials cheered the ruling by WTO.

 On the other hand, on Monday, the World Health Organization warned that Europe would see a rise in the daily number of COVID-19 deaths in October and November as the rising number of coronavirus cases worldwide was not slowing down. This also weighed on risk sentiment, and the Japanese Yen gained traction that led to downward momentum in the USD/JPY pair.

Meanwhile, the Chinese Industrial Production and Retail Sales for the year advanced in August and supported the hopes of economic recovery. This supported the risk sentiment and capped further losses in the USD/JPY pair on Tuesday.

On the data front, at 17:30 GMT, the Empire State Manufacturing Index in September rose to 17.0 from the expected 6.2 and supported the U.S. dollar. The Import Prices in August also rose to 0.9% from the forecasted 0.5% and supported the U.S. dollar. 

At 18:15 GMT, the Capacity Utilization Rate from the U.S. in August dropped to 71.4% from the forecasted 71.7% and weighed on the U.S. dollar and supported the downward momentum of the USD/JPY pair. The Industrial Production in July also dropped to 0.4% from the forecasted 1.2% and the previous 3.5% and weighed heavily on the U.S. dollar that supported the losses of the USD/JPY pair on Tuesday. 

Furthermore, the FOMC meeting for September has started on Tuesday, and it will be concluded on Wednesday with the speech of Jerome Powell, the chairman of the Federal Reserve. The market participants are waiting for his speech to find fresh clues about the economic condition and further monetary policy decisions by the U.S. government. Hence, the local currency remained under pressure ahead of it and kept weighing the USD/JPY currency pair. In July, industrial production also dropped to 0.4% from the forecasted 1.2% and the previous 3.5% and weighed heavily on the U.S. dollar that supported the losses of the USD/JPY pair on Tuesday. 

Furthermore, the FOMC meeting for September has started on Tuesday, and it will be concluded on Wednesday with the speech of Jerome Powell, the chairman of the Federal Reserve. The market participants are waiting for his speech to find fresh clues about the economic condition and further monetary policy decisions by the U.S. government. Hence, the local currency remained under pressure ahead of it and kept weighing the USD/JPY currency pair.

Daily Technical Levels

Support Pivot Resistance
105.2100 105.5200 105.7500
104.9800 106.0600
104.6700 106.2800

USD/JPY – Trading Tips

On Wednesday, the USD/JPY currency pair continues to drop to test the

the double bottom support area of 105.250 level. Recently on the 4-hour timeframe, the USD/JPY pair is forming a bullish engulfing candle that’s followed by the bearish candles, suggesting that sellers are exhausted, and the bulls enter the market now. The USD/JPY pair may bounce off over 105.250 level to complete the 38.2% Fibonacci retracement level at 105.545 and 61.8% Fibonacci level of 105.750 level. Later today, the U.S. Fed Fund Rate will remain in the highlights. Therefore, we should be cautious with the trades that we open, and in fact, we should try to close them ahead of the news release. Good luck! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 16 – Ethereum Facing a 35% Drop; Bitcoin Remains Bullish

The cryptocurrency sector has ended up with almost every single cryptocurrency in the top100 in the red. Bitcoin is currently trading for $10,707, which represents a decrease of 0.52% on the day. Meanwhile, Ethereum lost 5.13% on the day, while XRP lost 3.44%.

The cryptocurrency sector has ended up with almost every single cryptocurrency in the top100 in the red. Bitcoin is currently trading for $10,707, which represents a decrease of 0.52% on the day. Meanwhile, Ethereum lost 5.13% on the day, while XRP lost 3.44%.

The cryptocurrency sector has ended up with almost every single cryptocurrency in the top100 in the red. Bitcoin is currently trading for $10,707, which represents a decrease of 0.52% on the day. Meanwhile, Ethereum lost 5.13% on the day, while XRP lost 3.44%.

 Daily Crypto Sector Heat Map

If we look at the top100 cryptocurrencies, ABBC Coin gained 11.74% on the day, making it the most prominent daily gainer. Nervos Network (11.40%) and Hyperion (9.41%) also did great. On the other hand, the SushiSwap lost 34.73%, making it the most prominent daily loser. It is followed by NXM’s loss of 27.55% and Aragon’s loss of 24.48%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced an increase since our last report, with its value currently being at 60.51%. This value represents a 1.04% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone down in the past 24 hours. Its current value is $343.41 billion, which represents a decrease of $6.08 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

After a strong push towards the upside, Bitcoin has tried to consolidate just below the $10,850 mark. The largest cryptocurrency by market cap grazed the RSI overbought territory while failing to push its momentum past the $10,850 level, which held up quite nicely. Bitcoin is now stabilizing around the $10,700 level, where it will try to gather enough bull presence for another push towards $11,000.

Bitcoin’s short-term indicators are showing a bit less bull presence compared to yesterday, while its long-term indicators are still bullish.

BTC/USD 4-hour Chart

Technical factors:
  • Price is above both its 50-period EMA and 21-period EMA
  • Price is between the middle and top Bollinger band
  • RSI is overextended to the upside but descending (63.56)
  • Volume is stable
Key levels to the upside          Key levels to the downside

1: $10,850                                1: $10,630

2: $11,000                                2: $10,500

3: $11,090                                 3: $10,360

Ethereum

Ethereum has experienced quite a massive drop, considering it was not caused by a Bitcoin selloff. The second-largest cryptocurrency by market cap started its price descent and confirmed its bear flag formation. If the bear flag prediction comes true, we may experience a 35% move towards the downside from Ethereum. However, if the $360 level holds and pushes the price back up, the current move towards the downside may be called a fakeout.

With this being said, after the price has left the bear flag and confirmed it, the indicators have turned to “strong sell”. This is certainly a strong bearish indicator (or rather a set of indicators).

ETH/USD 4-hour Chart

Technical Factors:
  • The price is below both its 21-period and its 50-period EMA
  • The price is right below the middle Bollinger band
  • RSI is neutral and descending (41.22)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $371                                     1: $360

2: $400                                     2: $340

3: $415                                      3: $300

Ripple

XRP had quite a wild day when looking at its price movement. The third-largest cryptocurrency by market cap fell below the $0.2454 level, which triggered a massive selloff that brought its price to the $0.235 level. However, XRP bulls quickly reacted and brought the price back up near the $0.24 level, which is where XRP is at.

XRP has joined Ethereum in terms of technicals, with the short-term overview showing a “strong sell” sign.

XRP/USD 4-hour Chart

Technical factors:
  • The price is below its 21-period EMA and its 50-period EMA
  • Price is below its middle Bollinger band
  • RSI is neutral and descending (40.77)
  • Volume is low (one-candle spike during the selloff)
Key levels to the upside          Key levels to the downside

1: $0.2454                                  1: $0.235 

2: $0.266                                    2: $0.227

3: $0.285                                   3: $0.221

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 15 – Top Trade Setups In Forex – Series of Events in Focus! 

On the news front, the eyes will remain on the U.K. labour market report along with EU ZEW Economic Sentiment and German ZEW Economic Sentiment that are forecasted to report negative figures. Later during the U.S. session, the U.S. Capacity Utilization Rate and Industrial Production m/m are expected to support greenback amid positive forecast.

On the news front, the eyes will remain on the U.K. labour market report along with EU ZEW Economic Sentiment and German ZEW Economic Sentiment that are forecasted to report negative figures. Later during the U.S. session, the U.S. Capacity Utilization Rate and Industrial Production m/m are expected to support greenback amid positive forecast.

On the news front, the eyes will remain on the U.K. labour market report along with EU ZEW Economic Sentiment and German ZEW Economic Sentiment that are forecasted to report negative figures. Later during the U.S. session, the U.S. Capacity Utilization Rate and Industrial Production m/m are expected to support greenback amid positive forecast.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.18633 after placing a high of 1.18877 and a low of 1.18316. The EUR/USD pair moved in an upward direction on Monday and extended its bullish streak for the 4th consecutive day on the back of a weak U.S. dollar and improved the global equity market along with the positive Eurozone economic data.

The S&P 500 futures were up by 1.2%, and Dow Jones Futures was up by 0.9% whereas the NASDAQ rose by 1.6%. The EUR/USD pair moved higher as the equities were marginally higher in Asia and Europe on the back of positive news from the vaccine side. The vaccine developed by Oxford and AstraZeneca has resumed its phase-3 trials, and this improved the market risk sentiment on the renewed hopes of potential vaccine development.

The same vaccine trials were stopped in the previous week after a participant was reported with an unexplained illness. However, the trials have been started this week again, and the hopes for economic recovery have returned with it that gave a push to EUR/USD prices on the upside.

Other than that, July’s Industrial Production from Eurozone showed an improvement to 4.1% against the forecasted 4.0% and supported the single currency Euro. The strong Euro then added further gains in the EUR/USD pair.

Moreover, the U.S. dollar weakness also played an important role in pushing the pair EUR/USD further on the upside. The U.S. dollar was weak on the board ahead of the upcoming Fed’s September monetary policy meeting this week. The two-day meeting of the FOMC (Federal Reserve Open Market Committee) will start on Tuesday and will be concluded by the comments from Jerome Powell on Wednesday.

The market participants are waiting for the comments from the Chairman of the U.S. Federal Reserve on Wednesday, and this has increased the selling pressure against the U.S. dollar. The weak U.S. dollar pushed the EUR. The USD pair is higher on Monday.

The U.S. dollar was under more pressure after the House of Representatives returned from summer break, and the hopes for reaching a consensus on the fifth round of stimulus measure increased. These hopes exerted further pressure on the U.S. dollar and added strength to the EUR/USD pair’s upward movement.

However, the gains in EUR/USD pair were capped after the WHO reported a record rise in the daily cases of coronavirus from across the globe. The organization said that 307,930 cases were recorded in a single day. This raised uncertainty around the market related to economic recovery and helped cap further losses in EUR/USD pair on Monday.

Daily Technical Levels

Support Pivot Resistance
1.1835 1.1862 1.1894
1.1803 1.1921
1.1776 1.1954

EUR/USD– Trading Tip

The EURUSD pair has violated the double top resistance level of 1.1885 level, and now it’s trading at 1.1895 level. For now, the EUR/USD may find support at 1.1885 level, and above this, a continuation of a bullish trend may lead EUR/USD price until 1.1916 level. Bearish correction can be seen until 1.1885 and 1.1870 before continuation of further buying trend in the EUR/USD.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.28450 after placing a high of 1.2919 and a low of 1.27705. The pair GBP/USD rose in the first trading session on Monday, and after that, it converted its direction in the late trading session and lost some of its daily gains. The rise in prices of the GBP/USD pair on Monday was due to a weak U.S. dollar and improved risk sentiment. 

However, the Pound eased from session highs on Monday as Prime Minister Boris Johnson continued to make a case for a controversial bill that threatens to break the terms of the post-Brexit deal with the European Union the following vote later today.

The U.S. dollar came under fresh selling pressure on Monday after the equities rose in Asian and European session due to positive news from the vaccine front. The AstraZeneca and Oxford vaccine resumed its vaccine’s phase-3 trials after they were paused due to an unexplained illness found in one of the shareholders last week. 

The resumed trials of the long-awaited vaccine raised hopes for economic recovery and risk sentiment and helped the risk perceived British Pound to gain traction and move the GBP/USD pair on the upside.

However, the GBP/USD pair came under pressure ahead of the parliament vote on the internal market bill when Boris Johnson suggested that the legislation was needed to avoid a situation in which the E.U. counterparts seriously believe that they had the power to break up the U.K.

The expectations are high that the bill will pass the first parliamentary process despite the several party members of the Tory government have refused to back the bill. Furthermore, the upward movement of the Pound was short lives ahead of the Bank of England’s meeting later this week. Market participants have suggested that the central bank would welcome further easing in November and would renew its cautious outlook on the economy.

The hopes for further easing also weighed on GBP/USD pair and capped further gains in the currency pair at the starting day of the week in the absence of any macroeconomic data from both sides.

 Daily Technical Levels

Support Pivot Resistance
1.2774 1.2847 1.2919
1.2702 1.2992
1.2629 1.3063

GBP/USD– Trading Tip

The GBP/USD traded sharply lower at 1.2843 level, and now it’s forming a Doji candle, which may trigger buying in the GBP/USD pair. On the higher side, the Sterline may soar to target 1.2928 level, and even above this, the next target for Sterling can be 1.3033 level. The MACD and EMA are still supporting a selling bias; therefore, we should be looking to take selling entry below 1.2928 level today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair failed to halt its Asian session bearish moves and witnessed some further selling moves near 105.90 level mainly due to the broad-based U.S. dollar weakness, triggered by the doubts over the next round of the U.S. fiscal stimulus measures. Moreover, the upbeat market sentiment, backed by the recently positive coronavirus (COVID-19) vaccine news, also weighed on the safe-haven U.S. dollar, which ultimately dragged the currency pair below 106.00 level. However, the risk-on market sentiment also undermined the safe-haven Japanese yen and became the critical factor that helped the USD/JPY currency pair to limits its deeper losses. 

On the contrary, the fears of a no-deal Brexit and the Sino-American tussle keep challenging the market risk-on tone, which might suffer the currency pair into deeper losses. 

The ongoing impasse over the next round of the U.S. fiscal stimulus or the upbeat market sentiment, not to forget the record single-day increase in COVID-19 cases, these all factors tend to undermine the broad-based U.S. dollar. The U.S. Senate rejected a Republican bill that would have provided around $300 billion in new coronavirus aid. Democrats voted to block the law as they have been pushing for more funding to control the economic downturn that led the coronavirus pandemic.

Despite the lingering doubts over the U.S. economic recovery and the intensifying tension between the world’s two biggest economies, the market players continue to cheer the optimism about the coronavirus treatment. These hopes fueled after the AstraZeneca’s showed readiness to restart the third phase of coronavirus (COVID-19) vaccine trials. 

This, in turn, the broad-based U.S. dollar edged lower on the day as the lack of progress over the U.S. aid package continuously destroying hopes for a quick economic recovery. Meanwhile, the weaker tone surrounding the U.S. Treasury bond yields further weakened the already weaker sentiment surrounding the dollar. At the US-China front, the rising tensions between the United States and China as China’s Commerce Ministry said that it launched an anti-subsidy investigation on certain glycol ethers imports from the U.S., starting September 14.

Besides this, China announced that Beijing had sent a note detailing reciprocal restrictions on the U.S. Embassy and consulates on Friday. These moves came after the U.S. sanctions on Chinese individuals, which fuels worries about worsening US-China relations. These fears keep challenging the market risk-on tone and might suffer the currency pair into deeper losses.

Daily Technical Levels

Support Pivot Resistance
105.4500 105.8300 106.1200
105.1600 106.5000
104.7800 106.7800

USD/JPY – Trading Tips

The USD/JPY currency pair has dropped sharply amid increased safe-haven appeal and weakness in the U.S. dollar. The pair fell from 106 to 105.650 level and now it’s facing resistance at 105.795 level. On the lower side, the USD/JPY pair may drop until 105.265. Let’s consider opening a sell trade below 105.750 to target 105.450 and 105.250 level as the MACD and RSI also signalling selling bias. Good luck! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 15 – BTC Heading Towards $11,000; ETH Facing a 35% Drop?

The cryptocurrency sector has mostly been in the green in the past 24 hours, with Bitcoin leading the way towards the upside. Meanwhile, most of the tokens that ended up in the red on the daily were Ethereum (mostly DeFi) tokens. Bitcoin is currently trading for $10,763, which represents an increase of 4.09% on the day. Meanwhile, Ethereum gained 3.41% on the day, while XRP gained 2.42%.

The cryptocurrency sector has mostly been in the green in the past 24 hours, with Bitcoin leading the way towards the upside. Meanwhile, most of the tokens that ended up in the red on the daily were Ethereum (mostly DeFi) tokens. Bitcoin is currently trading for $10,763, which represents an increase of 4.09% on the day. Meanwhile, Ethereum gained 3.41% on the day, while XRP gained 2.42%.

The cryptocurrency sector has mostly been in the green in the past 24 hours, with Bitcoin leading the way towards the upside. Meanwhile, most of the tokens that ended up in the red on the daily were Ethereum (mostly DeFi) tokens. Bitcoin is currently trading for $10,763, which represents an increase of 4.09% on the day. Meanwhile, Ethereum gained 3.41% on the day, while XRP gained 2.42%.

 Daily Crypto Sector Heat Map

If we take a look at the top100 cryptocurrencies, Hyperion gained 51.28% on the day, making it the most prominent daily gainer. NXM (40.86%) and Bytom (18.97%) also did great. On the other hand, the UNUS SED LEO lost 6.72%, making it the most prominent daily loser. It is followed by Waves’ loss of 6.35% and Band Protocol’s loss of 5.57%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced a slight increase since our last report, with its value currently being at 59.47%. This value represents a 0.1% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has skyrocketed in the past 24 hours. Its current value is $351.49 billion, which represents an increase of $15.59 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has made a move towards the upside, passing through its $10,360 and $10,500 levels. As we mentioned in our previous articles, this is a huge bullish sign, and the overall indicators are showing that as well. If the bulls regain momentum, we can expect a push towards $11,000 once the consolidation continues.

With that being said, Bitcoin’s current price movement got stopped at the $10,850 level. While this does mean that Bitcoin bulls have encountered some resistance, it certainly does not mean that the overall trend is over. Bitcoin has shown great resistance at the $10,000 psychological level, which prompted this push towards the upside.

BTC/USD 4-hour Chart

Technical factors:
  • Price is above both its 50-period EMA and 21-period EMA
  • Price is right at the top Bollinger band
  • RSI is overextended to the upside, though with more room to go up (67.45)
  • Volume is stable
Key levels to the upside          Key levels to the downside

1: $10,850                                1: $10,630

2: $11,000                                2: $10,500

3: $11,090                                 3: $10,360

Ethereum

Ethereum was extremely volatile in the past 24 hours. Its price movements were quite hectic, with the price pushing past the $371 level and reaching the $385 mark before coming back down to restest the newly-conquered level, only to go up again and down again. Ethereum is currently supported by both the 50-period and 21-period moving averages, which are right below its price level. On top of that, the $371 level was turned to a support level after a clean confirmation move.

While its technicals show a short-term buy opportunity, the long-term technicals are still tilted towards the sell side. On top of that, Ethereum has created a nice bear flag formation, which (if it turns out to be correct) can prompt a 35% move towards the downside.

ETH/USD 4-hour Chart

Technical Factors:
  • The price is right above both its 21-period and its 50-period EMA
  • The price is right above the middle Bollinger band
  • RSI is neutral (53.36)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $400                                     1: $371

2: $415                                     2: $360

3: $445                                      3: $340

Ripple

XRP has managed to push itself above the $0.2454 level once again, but still hasn’t confirmed its position above it. A confirmation above this level and a slight push towards the upside will be crucial for the future of XRP, as many traders are calling for bearish scenarios and drawing a bearish flag (though this flag is a lot less picture-perfect as the one on the ETH/USD chart).

XRP is showing signs of slight short-term bullishness, while its longer-term technicals are still pointing towards the downside.

XRP/USD 4-hour Chart

Technical factors:
  • The price is just above its 21-period EMA and its 50-period EMA
  • Price is right above its middle Bollinger band
  • RSI is neutral and pushing towards the upside(54.88)
  • Volume is extremely low, but stable
Key levels to the upside          Key levels to the downside

1: $0.2454                                  1: $0.235 

2: $0.266                                    2: $0.227

3: $0.285                                   3: $0.221

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 14 – Top Trade Setups In Forex – U.S. Industrial Production in Focus! 

On Monday, the focus will remain on the European Industrial Production m/m data; however, the data is low impact and may not drive major market movements. Therefore, the technical side may drive further trends in the market.

On Monday, the focus will remain on the European Industrial Production m/m data; however, the data is low impact and may not drive major market movements. Therefore, the technical side may drive further trends in the market.

On Monday, the focus will remain on the European Industrial Production m/m data; however, the data is low impact and may not drive major market movements. Therefore, the technical side may drive further trends in the market.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.18435 after placing a high of 1.18740 and a low of 1.18099. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair rose for the 3rd consecutive day on Friday amid the rising risk-on market sentiment and more hawkish comments from the ECB. The market’s attention was on if the ECB would mention the recent appreciation in the local currency.

The ECB President Christine Lagarde said that ECB members had noticed the single currency’s recent strength, but there was no policy change to address given the rise as there was nothing to worry about. The recent rise was attributed to the improving economic data after the restrictions imposed due to coronavirus were lifted and economic activities started.

However, ECB’s more positive comments, even the Eurozone, have entered into a deflationary period, giving further strength to the single currency and the pair EUR/USD posted gains.

On the data front, the German Final CPI in August remained flat with the expectations of -0.1%. At 11:00 GMT, the German WPI in August dropped to -0.4% from the expected 0.5% and weighed on a single currency. At 13:00 GMT, the Italian Quarterly Unemployment Rate dropped to 8.3% in August from the forecasted 8.4% and supported a single currency that helped the EUR/USD pair rise and post gains.

Furthermore, the upward trend in EUR/USD pair on Friday was also supported by the Eurogroup and other European Union finance ministers who met in Berlin on the day and facilitated the growth in Europe.

Whereas, the gains in EUR/USD pair were capped by the improving U.S. dollar strength that was backed by the positive CPI data from the United States on Friday. At 17:30 GMT, the Consumer Price Index in August rose to 0.4% from the expected 0.3% and supported the U.S. dollar. In August, the Core Consumer Price Index also rose to 0.4% against the expected 0.2% and supported the U.S. dollar.

The strong U.S. dollar kept the gains in EUR.USD pair limited at the ending day of the week. Meanwhile, the latest Brexit worries with no progress from both sides also kept the EUR/USD pair’s gains limited on Friday.

On the coronavirus pandemic front, the cases in many European countries rose back to March levels and forced governments to re-impose restrictions to curb the spread. The latest surge in coronavirus cases was attributed to August’s vacations when many tourists visited a handful of destinations. Another reason could also be the fact that schools were reopened in August. These rising cases from many European countries kept the gains in EUR/USD pair limited.

Daily Technical Levels

Support Pivot Resistance
1.1831 1.1840 1.1850
1.1820 1.1860
1.1811 1.1870

EUR/USD– Trading Tip

The EUR/USD continues to trade at 1.1835 level as the ECB decided to leave its interest rate unchanged in its monetary policy meeting. On the higher side, the pair may find resistance at 1.1839 level, and above this, the pair may find the next resistance at 1.1860 level along with support at 1.1828 level. Below 1.1828, the EUR/USD may find the next support at 1.1797 and 1.1755 level.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.27946 after placing a high of 1.28656 and a low of 1.27624. Overall the movement of the GBP/USD pair remained bearish throughout the day. The GBP/USD pair extended its previous day bearish trend and posted losses on Friday amid the strong U.S. dollar and lingering Brexit worries. Prime Minister Boris Johnson reportedly pushed ahead with the bill that would seek to override the withdrawal deal despite threats from the European Union.

According to the Guardian report, Prime Minister Boris Johnson attempted to whip up demand for their internal market bill. He told his lawmakers that the legislation was necessary to stop a foreign power from breaking up the United Kingdom. He also insisted that there was no time for questions. Prime Minister Boris Johnson also faced a rebellion from his party, who have tabled an amendment that would give Parliament the right to veto the bill. After the E.U., this move came in threatened to abandon a UK-EU trade deal if the Prime Minister moved ahead with the legislation. 

The latest internal market bill published on Wednesday could create standard rules that apply across the U.K., including England, North Ireland, Scotland, and Wales. The new bill is expected to clash with key terms of the Brexit agreement that requires Northern Ireland to follow E.U. rules in the post-Brexit period to avoid a hard border with the Republic of Ireland.

The emergency talks held this week also failed to break the deadlock between E.U. & U.K. negotiators, and the differences in essential areas remain. PM Boris Johnson has warned that if no progress in trade talks will not be made until mid-October, the U.K. will leave the E.U. without a deal and follow WTO rules. The GBP/USD pair remained under pressure. Both sides were ready and prepared for a no-deal or hard Brexit as Michel Barnier, the top E.U. negotiator, said that the E.U. had intensified its preparedness work to be ready for all scenarios on January 1, 2021.

Apart from Brexit, the macroeconomic data released on Friday from Great Britain also affected GBP/USD prices. At 110:00 GMT, the Construction Output from the United Kingdom in July rose to 17.6% against the forecasted 10.3% and supported GBP. The GDP from the U.K. in July remained flat with expectations of 6.6%. The Goods Trade Balance from Britain declined more than forecast and weighed on local currency. The balance was dropped to -8.6B from the projected -7.4B and weighed on GBP.

The Index of Services for the quarter also dropped to -8.1% from the expected -7.8% and weighed on the local currency that added pressure on GBP/USD pair. The Industrial Production in July rose to 5.2% in the U.K. against the forecasted 4.2% and supported GBP. The Manufacturing Production in the United Kingdom in July rose to 8.3% from the forecasted 8.4% and supported GBP. Consumer Inflation Expectations in August dropped to 2.8% from the previous 2.9%.

The negative data from the United Kingdom weighed on local currency and added losses in the GBP/USD pair on Friday. From the USD front, the CPI and Core CPI in July rose to 0.4% against the expectations of 0.3% and 0.2%, respectively, and supported the U.S. dollar. The strong U.S. dollar added further losses in GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.2786 1.2799 1.2823
1.2762 1.2836
1.2748 1.2860

GBP/USD– Trading Tip

The GBP/USD traded sharply lower at 1.2843 level, and now it’s forming a Doji candle, which may trigger buying in the GBP/USD pair. On the higher side, the Sterline may soar to target 1.2928 level, and even above this, the next target for Sterling can be 1.3033 level. The MACD and EMA are still supporting a selling bias; therefore, we should be looking to take selling entry below 1.2928 level today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair stopped its early-day bearish rally and drew some modest bids around above 106.20 level, mainly due to the risk-on market. However, the positive tone around the equity market was supported by the news of receding tension between India and China, and Tokyo’s optimism over easing lockdown restriction also favor the market trading sentiment, which eventually undermined the Japanese yen currency and contributed to the currency pair gains. 

In the wake of low safe-haven demand, the broad-based U.S. dollar weakness becomes the major factor that kept the pressure on any further gains in the currency pair. Meanwhile, the ongoing US-China tussle over several issues, the risk of a no-deal Brexit, and delay in the U.S. stimulus keep challenging the market trading sentiment, which might cap further gains in the currency pair. The USD/JPY is trading at 106.19 and consolidating in the range between 106.08 – 106.20.

Across the ocean, the market trading sentiment rather unaffected by the intensified US-China tussle and Brexit issue. The Trump administration continues to hold TikTok on the sellers’ radar. In the meantime, the cancellation of over 1,000 visas of Chinese residents also irritates China. 

Also capping the gains could be the headlines suggesting that the Tokyo metropolitan government lowered its coronavirus alert by one level to 3 on Friday. This might underpin the local currency and dragged the currency pair down. 

The Japanese yen currency might also take clues from the Producer Price Index (PPI) data for August that recovered to -0.5% from -0.9% YoY. The traders will keep their eyes on the U.S. Consumer Price Index (CPI) for August, which is expected 1.2% against 1.0% YoY. Moreover, the updates surrounding the Sino-US tussle, as well as Brexit related headline, could not lose their importance.

Despite this, the crude oil prices’ gains were capped by the continuing oversupply fears and a slow recovery in global fuel demand. This was witnessed after the builds in crude oil supply reported during the previous week by both the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA). Meanwhile, the ongoing COVID-19 pandemic continuing to hamper fuel demand recovery. As per the latest report, the World Health Organization (WHO) recorded a record single-day hike in COVID-19 cases by 307,930 in 24 hours during this weekend.

Daily Technical Levels

Support Pivot Resistance
106.0900 106.1500 106.2100
106.0300 106.2800
105.9600 106.3400

USD/JPY – Trading Tips

The USD/JPY is consolidating at 106.050, with a resistance mark of 106.480 level. An upward crossover of 106.480 level may extend further buying trend until the 106.840level, and the violation of this level can extend buying until the next resistance level of 107.150. On the downside, the safe-haven USD/JPY currency may gain support at 105.620 and 105.280. Let’s consider taking a sell trade below 106.024 level as the MACD and RSI also suggest selling bias. Good luck! 

 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 14 – The EU Regulating Stablecoins; Crypto Market Preparing For a Move

The cryptocurrency market managed to stay relatively healthy over the weekend as most cryptos tried to consolidate rather than move. Bitcoin is currently trading for $10,343, which represents a decrease of 0.85% on the day. Meanwhile, Ethereum lost 5.22% on the day, while XRP lost 2.06%.

The cryptocurrency market managed to stay relatively healthy over the weekend as most cryptos tried to consolidate rather than move. Bitcoin is currently trading for $10,343, which represents a decrease of 0.85% on the day. Meanwhile, Ethereum lost 5.22% on the day, while XRP lost 2.06%.

The cryptocurrency market managed to stay relatively healthy over the weekend as most cryptos tried to consolidate rather than move. Bitcoin is currently trading for $10,343, which represents a decrease of 0.85% on the day. Meanwhile, Ethereum lost 5.22% on the day, while XRP lost 2.06%.

 Daily Crypto Sector Heat Map

If we take a look at the top100 cryptocurrencies, Flexacoin gained 13.18% on the day, making it the most prominent daily gainer. OKB (13.14%) and Waves (12.08%) also did great. On the other hand, the NXM lost 18.45%, making it the most prominent daily loser. It is followed by DFI. Money’s loss of 17.46% and yearn .finance’s loss of 16.42%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced an increase since our last report, with its value currently being at 59.37%. This value represents a 4.93% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone slightly down in the past 24 hours. Its current value is $335.90 billion, which represents a decrease of $2.27 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the weekend steadily and slowly increasing and trying to reach past $10,500. While it has gotten past the $10,360 level once, it fell under it once the move couldn’t carry enough momentum to pass $10,500 as well. Bitcoin is currently fighting for the $360 level, with its price being right below it.

Our prediction regarding the price movement stays the same as Bitcoin did not move much over the course of the weekend. If Bitcoin doesn’t pass the $10,360 line soon, we should look for support at $9,600, and ultimately at the 200-day SMA ($9,080).

It is also important to note that, as the price movement has been muted for such a long time, it is extremely likely that, once the price moves past $10,360 or below $10,000 (with confidence), we might see a massive surge in volume extending that move. This will be a great opportunity for traders to trade on the way down, as well as the pullbacks.

BTC/USD 4-hour Chart

Technical factors:
  • Price is below the 50-period EMA and right at the 21-period EMA
  • Price is right at middle Bollinger band
  • RSI is neutral (50.27)
  • Volume is stable (slightly below average)
Key levels to the upside          Key levels to the downside

1: $10,360                                1: $10,015

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

3: $10,630                                 3: $9,600

Ethereum

Ethereum’s price movement in the past couple of days looks exactly like Bitcoins in direction, but with much higher volatility. The second-largest crypto by market cap took the weekend to push towards $400, which ended unsuccessfully. As the move could not carry the momentum forward, bears took over and brought the price to its current position, where it is bound in a narrow range by $360 to the downside and $371 to the upside.

Ethereum’s volatility certainly comes from people investing in DeFi as Ethereum was never as volatile as it is now. However, its moves are still following Bitcoin. This volatility might be a good opportunity for traders to push for some trades.

ETH/USD 4-hour Chart

Technical Factors:
  • The price is right above its 21-period and its 50-period EMA
  • The price is at its middle Bollinger band
  • RSI is neutral (49.14)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $371                                     1: $360

2: $400                                     2: $340

3: $415                                      3: $300

Ripple

XRP has not been much different from the aforementioned two cryptocurrencies. The third-largest cryptocurrency by market cap is still trading within a range bound by $0.235 to the downside and (more importantly) $0.2454 to the upside. XRP did have one a short period where it spiked above the resistance level, but the price quickly dwindled back down to its original level.

XRP is now fighting for the $0.2454 level, trying to surpass it. However, the extremely low volume shows us that this is will most likely not happen. Traders might have the opportunity to trade the pullback.

XRP/USD 4-hour Chart

Technical factors:
  • The price is just above its 21-period EMA and just below its 50-period EMA
  • Price is right above its middle Bollinger band
  • RSI is neutral (51.35)
  • Volume is extremely low, but stable
Key levels to the upside          Key levels to the downside

1: $0.2454                                  1: $0.235 

2: $0.266                                    2: $0.227

3: $0.285                                   3: $0.221

 

Categories
Forex Market Analysis

DAX Advances in an Ending Diagonal Pattern

Overview

Overview

Overview

The German benchmark index, DAX 30 advances in the extreme bullish sentiment zone accumulating gains over 60% after the German index gained support on the March’s low at 7,957.6 pts. In spite of the up-up-up market sentiment, the DAX develops an ending diagonal pattern that is still unfinished, suggesting the current upward trend’s exhaustion.

Market Sentiment Overview

DAX 30 continues its recovery following the German index drop to 7,957.6 pts, on March 23rd, which is the lowest level since late August 2013. From Mach’s low, DAX 30 advances over 60%.

The next DAX chart presents the German index in its daily timeframe illustrates the 52-week high and low range. The German index currently develops an upward movement in the extreme bullish sentiment zone. The short-term bullish sentiment is being confirmed by the 60-day moving average, which acts as support in the latest trading sessions.

The extreme bullish sentiment aided by the DAX surpassing the opening price of the year boosted the up-up-up sentiment in the news media added with the incomplete ascending wedge that remains in progress. These signals suggest the exhaustion of the current short-term bullish trend.

On the other hand, the daily chart of the DAX Volatility Index (VDAX) shows a mostly sideways movement in the extreme bearish zone. At the same time, the lateral consolidation pattern developed by VDAX, which remains unfinished, could experience a new decline raising the possibility of further upside in the German stock market.

Consequently, the German stock market sentiment is being dominated by extreme bullish bias. However, the incomplete ascending wedge pattern suggests the exhaustion of the upward movement.

Elliott Wave Outlook

The short-term outlook of the German stock market under the Elliott Wave perspective unveils the progress on an incomplete ending diagonal pattern, developing a new upward movement.

The DAX, in its 4-hour chart, exposes the progress of an upward corrective formation that follows an internal structure of a zigzag pattern of Minute degree labeled in back. The bullish move began in the March low when the German stock market plummeted until 7,957.6 pts. 

Currently, DAX advances in its fifth wave of Minuette degree labeled in blue, which, in turn, develops an ending diagonal pattern in its internal structure. This terminal formation, subdivided in a 3-3-3-3-3 sequence of Subminuette degree, identified in green, is seen advancing in its fifth wave. This pending upward movement agrees with the likely decline in the DAX Volatility Index.

Consequently, according to the Elliott wave perspective, our short-term outlook anticipates further upsides as long as the price stays above 12,737.5 pts. This potential upside could strike the 13,544.3 pts completing the wave ((c)) of Minute degree identified in black.

Categories
Forex Daily Topic Forex Price Action

Intraday Trading: Watch Out for Highest High/Lowest Low

In today’s lesson, we are going to demonstrate an intraday chart that ends up offering an entry. Intraday trading can be prolific if it is done in the right way. In today’s example, the price heads towards the North by making a good bullish move. It seems that the bull is in control. However, the price gets bearish later and ends up offering entry to the sellers. Let us find out how that happens.

In today’s lesson, we are going to demonstrate an intraday chart that ends up offering an entry. Intraday trading can be prolific if it is done in the right way. In today’s example, the price heads towards the North by making a good bullish move. It seems that the bull is in control. However, the price gets bearish later and ends up offering entry to the sellers. Let us find out how that happens.

In today’s lesson, we are going to demonstrate an intraday chart that ends up offering an entry. Intraday trading can be prolific if it is done in the right way. In today’s example, the price heads towards the North by making a good bullish move. It seems that the bull is in control. However, the price gets bearish later and ends up offering entry to the sellers. Let us find out how that happens.

It is an H1 chart. The chart shows that the price makes a good bullish move. The last candle comes out as a hanging man. The price does not make any bearish correction, so the daily candle closes without having an upper shadow. It suggests that the bull may dominate in the pair the next day.

The next day, the price makes a bullish breakout at the last day’s highest high. The pair is trading above the level. Ideally, the price above the last day’s highest high means the bull is in control. However, in this chart, the price does not make any bearish correction before making the breakout. Thus, the buyers are to wait for the price to consolidate and produce a bullish reversal candle to go long in the pair.

The next candle comes out as a bearish engulfing candle. The candle closes below the breakout level. If the level works as a level of resistance, the sellers may come into play and go short in the pair. Let us find out what happens next.

The next candle comes out as a hammer closing within the breakout level. It looks good for the sellers. The sellers may wait for the price to produce a bearish reversal candle and go short below the hammer’s lowest low.

The chart produces a bearish engulfing candle closing below the hammer’s body. The sellers may trigger a short entry below the hammer’s lower shadow. The last day’s lowest low offers the price to travel towards the North with a good reward.

One of the candles comes out as a bearish Marubozu candle closing well below the hammer’s lowest low. The entry may be triggered earlier just by using price breakout. Some traders may wait for a 15M breakout to trigger the entry, and some even wait for an H1 breakout. Ideally, a 15M breakout is good enough to trigger such entry. Traders may set their stop loss above the breakout level since it is the new resistance and Take profit with 2R. If they set the stop loss above the trend’s highest high, they may set take profit at the previous day’s lowest low. Let us find out how the entry goes.

The price heads towards the South with good bearish momentum. It hits 2R in a hurry. The way it has been going, it may hit the previous day’s lowest low soon as well.

To do intraday trading, pay attention to the last day’s highest high and lowest low, breakout, breakout confirmation, and reversal candle. Do some backtesting and then try live trading with a tiny lot at the beginning. Once you have mastered this, it can make your hand full.

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 11 – DeFi Sector Experiences Volatility; The Rest Of The Market Stable

The cryptocurrency market has experienced large volatility in the DeFi sector, while the rest of the market was relatively stable. Bitcoin is currently trading for $10,301, which represents a decrease of 0.68% on the day. Meanwhile, Ethereum lost 0.11% on the day, while XRP lost 0.73%.

The cryptocurrency market has experienced large volatility in the DeFi sector, while the rest of the market was relatively stable. Bitcoin is currently trading for $10,301, which represents a decrease of 0.68% on the day. Meanwhile, Ethereum lost 0.11% on the day, while XRP lost 0.73%.

The cryptocurrency market has experienced large volatility in the DeFi sector, while the rest of the market was relatively stable. Bitcoin is currently trading for $10,301, which represents a decrease of 0.68% on the day. Meanwhile, Ethereum lost 0.11% on the day, while XRP lost 0.73%.

 Daily Crypto Sector Heat Map

If we take a look at the top100 cryptocurrencies, aelf gained 152.47% on the day, making it the most prominent daily gainer. Flexacoin (45.07%) and Ampleforth (35.77%) also did great. On the other hand, the SushiSwap lost 14.95%, making it the most prominent daily loser. It is followed by Elrond’s loss of 7.82% and Serum’s loss of 6.08%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level experienced a massive drop since our last report, with its value currently being at 54.44 9.29%. This value represents a 4.85% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up in the past 24 hours. Its current value is $337.66 billion, which represents an increase of $5.84 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent another day trying to push past the $10,360 resistance. However, every attempt in the past few days ended up in BTC passing the level, but then coming back under it due to being unable to confirm its position above. While the resistance level weakens each time Bitcoin attempts to pass it, it brings more bears to the game as most people intuitively trade in the direction opposite to the most recent failed attempt.

If Bitcoin doesn’t pass $10,360 soon, we should look for support at $9,600, and ultimately at the 200-day SMA ($9,080).

BTC/USD 4-hour Chart

Technical factors:
  • Price is below the 50-period EMA and right above the 21-period EMA
  • Price is slightly closer to the middle than the top Bollinger band
  • RSI is neutral (49.57)
  • Volume is stable
Key levels to the upside          Key levels to the downside

1: $10,360                                1: $10,015

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

3: $10,630                                 3: $9,600

Ethereum

Ethereum has, unlike Bitcoin, managed to gain some value as it reached past its $360 level. However, the move has ended and Ethereum is now stuck in a narrow range between $360 to the downside and $371 to the upside. The second-largest cryptocurrency by market cap has repeatedly tried to get past it, but with no success.

Ethereum’s break above $371 should establish a short-term bullishness, while a break below $360 is not as relevant, and we may look for $340 as the next support.

ETH/USD 4-hour Chart

Technical Factors:
  • The price is above its 21-period while it is currently crossing the 50-period EMA
  • The price is near its top Bollinger band
  • RSI is neutral (52.77)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $371                                     1: $360

2: $400                                     2: $340

3: $415                                      3: $300

Ripple

XRP failed to break its immediate resistance of $0.2454, which triggered a small pullback. The third-largest cryptocurrency by market cap doesn’t seem like it will be able to break this level any time soon unless it gets a massive influx of bulls. Unlike the aforementioned two cryptocurrencies, XRP is a bit more stable, and failing to push above a resistance level doesn’t necessarily mean that it will attempt a move towards the downside.

XRP/USD 4-hour Chart

Technical factors:
  • The price is just below its 21-period EMA and well below its 50-period EMA
  • Price is sitting at the middle Bollinger band
  • RSI is neutral and descending (47.20)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $0.2454                                  1: $0.235 

2: $0.266                                    2: $0.227

3: $0.285                                   3: $0.221

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 10 – Top Trade Setups In Forex – ECB Monetary Policy In Focus

It will be a big day for the European pairs as the European Central Bank is due to report it’s minimum bid rate along with the Press Conference to determine the monetary policy. Besides, the U.S. Unemployment Claims and PPI data will be the main market mover of the market.

It will be a big day for the European pairs as the European Central Bank is due to report it’s minimum bid rate along with the Press Conference to determine the monetary policy. Besides, the U.S. Unemployment Claims and PPI data will be the main market mover of the market.

It will be a big day for the European pairs as the European Central Bank is due to report it’s minimum bid rate along with the Press Conference to determine the monetary policy. Besides, the U.S. Unemployment Claims and PPI data will be the main market mover of the market.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18027 after placing a high of 1.18339 and a low of 1.17525. Overall the movement of the EUR/USD pair remained bullish throughout the day. The market sentiment was sour on Wednesday amid the pause in the AstraZeneca & Oxford University vaccine’s final clinical trials. The trials were paused due to an unexplained illness in one participant. This weighed on risk sentiment and kept the EUR/USD pair under pressure on Wednesday.

The much-awaited decision of the European Central Bank monetary policy will announce on Thursday, and the market participants have started to bets on it. Meanwhile, the U.S. dollar surging due to increased pressure on its rivals dropped on Wednesday and caused a surge in EUR/USD pair.

The ECB is concerned about the appreciation in Euro and increased deflationary pressure and the uncertainty around Europe’s coronavirus situation. The bank is set to announce no changes in its upcoming monetary policy for the second month in September. The bank expanded it’s Pandemic Emergency Purchase Program with EUR 600 billion in June.

The interest rates on main refinancing operations are at 0.00%, on the marginal lending facility are at 0.25%, and the deposit facility is at -0.50%. All are expected to remain unchanged in this monetary policy meeting. The PEPP will also remain unchanged at EUR 1350 Billion. The speech from the ECB President Cristine Lagarde will remain under focus by traders to find fresh clues about the EUR/USD pair.

For August, the Eurozone inflation came in negative when the annualized consumer price index fell by 0.2% versus the July’s rise by 0.4% and raised concerns about the local economy. The impact of coronavirus has been rising as the coronavirus is surging in the Eurozone. To combat coronavirus’s economic impact, ECB expanded its balance sheet from 4500 B euros to 6424B euros. The long-term Eurozone inflation is also gloomy and shows a downward trend.

Traders await that the euro appreciation will remain under the focus of Lagarde’s speech, and measures that she will announce to cope with it will provide massive movements in EUR/USD prices on Thursday. The Eurozone economy outlook from the European Central Bank will also give clues on the EUR/USD pair.

On the U.S. side, the Consumer Credit in July dropped to 12.2B from the forecasted 12.9B and weighed on the U.S. dollar that helped EUR/USD move upward. EUR/USD pair posted gains after falling for three consecutive days on Wednesday.

Daily Technical Levels

Support Pivot Resistance
1.1795 1.1820 1.1857
1.1758 1.1882
1.1733 1.1919

EUR/USD– Trading Tip

The EUR/USD has recovered a bit to trade at 1.1820 level ahead of the ECB Monetary policy decision due to coming out during the late European session. ECB isn’t expected to change its rate; however, the press conference will be the EUR/USD pair’s main mover. On the higher side, the pair may find resistance at 1.1860 level along with support at 1.1797 level. Below 1.1797, the pair may drop towards 1.1755 level. Conversely, a bullish breakout of 1.1825 level can lead EUR/USD prices towards 1.1866.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29986 after placing a high of 1.30231 and a low of 1.28847. Overall the movement of the GBP/USD pair remained bullish throughout the day. After falling for two consecutive days and posting massive losses, the GBP/USD pair dropped on Wednesday in an earlier trading session near the lowest level since July 28. However, in the late trading session, the pair successfully recovered its daily gains and reversed its direction and started posting gains.

The pair followed its previous day bearish trend in the early trading session on Wednesday that the new Internal Market Bill news from the U.K. Parliament pushed. The new bill was issued to protect the United Kingdom’s jobs after the transition period ends next December. 

The bill raised fears that it might impact the relationship between the U.K. and the E.U. It could re-write the parts of the Brexit withdrawal agreement related to the Northern Ireland protocol. In response to the new bill news, the E.U. Commission President Ursula von der Leyen said that breaching the singed withdrawal agreement would break the international law and undermine trust. This weighed on the local currency GBP and dragged the pair towards the lowest level since July 28.

However, the pair’s downward movement was further supported by the latest news that weighed on risk sentiment that AstraZeneca & Oxford University vaccine’s final clinical trials were paused after an unexplained illness was found in a participant.

Whereas, on the U.S. front, the U.S. dollar came under pressure on Wednesday after rising for the past few days on the back of weak rival currencies performance. The weakness in the U.S. dollar was ahead of the ECB meeting on Thursday. The U.S. Dollar Index fell by 0.1% on Wednesday to 93.16 and weighed on the U.S. dollar that supported the GBP/USD pair’s movement.

On the data front, the Consumer Credit for July dropped to 12.2B against the forecasted 12.9B and weighed on the U.S. dollar that added further support to the GBP/USD pair. On Wednesday, PM Boris Johnson said that they must act to avoid another lockdown as virus cases were rising in England. He was referring to the new rule that restricts the gathering of more than six people. The new rule can issue fines or make arrests in case of breach of law.

 Daily Technical Levels

Support Pivot Resistance
1.3079 1.3125 1.3196
1.3008 1.3242
1.2962 1.3313

GBP/USD– Trading Tip

The GBP/USD pair has formed a Doji pattern over 1.2901 area, and the support level is extended by an upward trendline on four hourly timeframes. On the higher side, the pair may face immediate resistance at 1.3021, and above this, the Cable may head towards 61.8% Fibo level of 1.3154 level. Jobless claims data may play the role today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.174 after placing a high of 106.272 and a low of 105.785. Overall the movement of the USD/JPY pair remained bullish throughout the day. After falling on Tuesday, the USD/JPY pair gained traction on Wednesday and started rising. The pair fell to 6 days lowest level on Wednesday in the early trading session but reversed its direction and moved upward on the back of the upbeat market sentiment.

The market mood improved on Wednesday and made it difficult for the safe-haven Japanese Yen to find demand and pushed the pair USD/JPY higher. After falling for three consecutive days, the equity market was raised on Wednesday with the S&P 500 index up by 1.85% and confirmed the risk-on market sentiment. The U.S. Treasury bond yields for a 10-year note also rose to 2.2% and supported the upward market sentiment.

Moreover, the U.S. Dollar Index also rose on Wednesday to 93.66 level the highest since August 12 and supported the upward U.S. dollar movement. 

However, the USD/JPY par gains were capped by multiple factors, including the US-China tussles and negative vaccine news.

On Wednesday, the long-awaited vaccine developed by AstraZeneca and Oxford University stopped its final stage clinical trials due to an unexplained illness found in one of the participants. This news raised concerns over vaccines’ development and, ultimately, on the economic recovery and capped further gains in the USD/JPY pair.

Meanwhile, the rising tensions between the U.S. & China after the latest comments from President Donald Trump and his administration regarding the tech fight and bringing back the production to America raised fears for the phase-one deal completion. These tensions and the lingering fight on the South China Sea have weighed on market sentiment that undermined the risk sentiment and supported the Japanese Yen, ultimately capping further gains in the USD/JPY pair.

Moreover, the new Brexit worries after the U.K. introduced new potential internal law that could change the initial withdrawal agreement terms related to the Northern Ireland border, also weighed on risk sentiment. The uncertainty regarding a Brexit deal between the E.U. & U.K. also weighed on market sentiment and limited the USD/JPY pair’s gains.

On the data front, the M2 Money Stock for the year in Japan rose to 8.6% in August from 8.2% and supported the Japanese Yen that capped further gains in the USD/JPY pair. At 10:59 GMT, the Prelim Machine Tool Orders decreased by -23.3% in August compared to July’s -31.1%. On the U.S. front, the JOLTS Job Openings in July rose to 6.62M against the forecasted 6.05M and supported the U.S. dollar that added further support to the USD/JPY pair on Wednesday.


Daily Technical Levels

Support Pivot Resistance
105.9500 106.2700 106.6800
105.5500 106.9900
105.2300 107.4000

USD/JPY – Trading Tips

On Thursday, the USD/JPY is consolidating at 106.050, with a resistance mark of 106.480 level. An upward crossover of 106.480 level may extend further buying trend until the 106.840level, and the violation of this level can extend buying until the next resistance level of 107.150. On the downside, the safe-haven USD/JPY currency may gain support at 105.620 and 105.280. Let’s consider taking a sell trade below 106.024 level as the MACD and RSI also suggest selling bias. Good luck! 

 

Categories
Forex Market Analysis

CAD/JPY: A massive round number holding the key

CAD/JPY produced a bullish inside bar yesterday. The price had a bounce at the same level earlier and made a bullish move. The daily chart suggests that the price has some space to travel towards the North. However, if a bullish inside bar is followed by a bearish engulfing candle, it ends up being prolific for the sellers. The H4 chart looks bullish. On the other hand, the H1 chart looks a bit bearish biased. Thus, traders are to be very watchful to trade in the pair. Let us now have a look at three vital charts.

CAD/JPY produced a bullish inside bar yesterday. The price had a bounce at the same level earlier and made a bullish move. The daily chart suggests that the price has some space to travel towards the North. However, if a bullish inside bar is followed by a bearish engulfing candle, it ends up being prolific for the sellers. The H4 chart looks bullish. On the other hand, the H1 chart looks a bit bearish biased. Thus, traders are to be very watchful to trade in the pair. Let us now have a look at three vital charts.

CAD/JPY produced a bullish inside bar yesterday. The price had a bounce at the same level earlier and made a bullish move. The daily chart suggests that the price has some space to travel towards the North. However, if a bullish inside bar is followed by a bearish engulfing candle, it ends up being prolific for the sellers. The H4 chart looks bullish. On the other hand, the H1 chart looks a bit bearish biased. Thus, traders are to be very watchful to trade in the pair. Let us now have a look at three vital charts.

Chart 1 CAD/JPY Daily Chart

The chart shows that it had a bounce at the level of 80.000 earlier. It is a massive round number. It pushed the price towards the North, and the price made a bearish move, closing within the level. Yesterday’s candle came out as a bullish inside bar. As far as the round numbered support is concerned, the price may make a bullish move. However, if the price gets bearish and ends up producing a bearish engulfing candle closing below 80.000, the sellers may go short in the pair aggressively and drive the price towards the level of 78.300. On the other hand, if the price gets bullish, it may find its next resistance around 81.400.

Chart 2 CAD/JPY H4 Chart

The chart shows that the price upon having a bounce at the level of 80.800 produced a spinning top and headed towards the North. It made a bullish breakout at the level of 80.600. The pair had a rejection at 80.800. It has been in a bearish correction. The level of 80.600 may work as a level of support. If the level ends up producing a bullish reversal candle, the buyers may go long above the level of 80.800. The price may find its next resistance around 81.400.

Chart 3 CAD/JPY H1 Chart

The price had a rejection at the level of 80.800 twice. It produced a bearish engulfing candle. The pair is trading around the neckline at 80.640. A bearish reversal candle may attract the sellers to go short in the pair and drive the price towards the South. The price may find its next support around 80.150. On the other hand, the buyers are to wait to go long above the level of 80.800.

The H1 chart looks bearish biased. However, the daily and the H4 chart look bullish. Considering these three charts, it seems that the pair may end up having another bullish day.

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 10 – Ethereum Double-Digit Gains; Crypto – S&P500 Correlation nears All-Time-Highs

The cryptocurrency market recovered today as Bitcoin bulls pushed past $10,360. On top of that, Ethereum skyrocketed, netting double-digit gains on the day. Bitcoin is currently trading for $10,391, which represents an increase of 3.90% on the day. Meanwhile, Ethereum gained 11.36% on the day, while XRP gained 5.48%.

The cryptocurrency market recovered today as Bitcoin bulls pushed past $10,360. On top of that, Ethereum skyrocketed, netting double-digit gains on the day. Bitcoin is currently trading for $10,391, which represents an increase of 3.90% on the day. Meanwhile, Ethereum gained 11.36% on the day, while XRP gained 5.48%.

The cryptocurrency market recovered today as Bitcoin bulls pushed past $10,360. On top of that, Ethereum skyrocketed, netting double-digit gains on the day. Bitcoin is currently trading for $10,391, which represents an increase of 3.90% on the day. Meanwhile, Ethereum gained 11.36% on the day, while XRP gained 5.48%.

 Daily Crypto Sector Heat Map

If we take a look at the top100 cryptocurrencies, Solana gained 42.61% on the day, making it the most prominent daily gainer. Yearn.finance (24.55%) and Aave (24.03%) also did great. On the other hand, the Hyperion lost 24.27%, making it the most prominent daily loser. It is followed by Blockstack’s loss of 5.21% and Tron’s loss of 2.60%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level decreased slightly since our last report, with its value currently being at 59.29%. This value represents a 0.60% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up slightly in the past 24 hours. Its current value is $331.80 billion, which represents an increase of $4.90 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the past 24 hours trying to push past the $10,360 resistance level, which is key if the largest cryptocurrency by market cap wants to continue its bullish presence. Even though the level has fallen, BTC needs to reliably pass it and confirm its position above it in order to encourage more bulls to enter the market. If Bitcoin positions itself above $10,360 well, the influx of bullish pressure will most likely send its price further up towards $10,500 or even $10,630

If, however, Bitcoin manages to fall below $10,000 and confirms its position below it, we can expect to see a bear push towards $9,600 and ultimately to the 200-day SMA ($9,080).

BTC/USD 4-hour Chart

Technical factors:
  • Price is below 50-period EMA while being above its 21-period EMA
  • Price is hitting the top Bollinger band
  • RSI is neutral and pushing towards the upside (54.00)
  • Volume is stable
Key levels to the upside          Key levels to the downside

1: $10,360                                1: $10,015

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

3: $10,630                                 3: $9,600

Ethereum

Ethereum skyrocketed in the past 24 hours, with its price reaching double-digit gains. The second-largest cryptocurrency by market cap overcame the initial rejection of the $360 level and ultimately pushed past it, reaching the $371 level and getting stopped out there. The next move Ethereum makes will be crucial and will determine its short-term future.

If Ethereum manages to pull off a confirmation move above $360, we can expect a push towards $371. However, if that does not happen, we can expect ETH to return to its previous levels.

ETH/USD 4-hour Chart

Technical Factors:
  • The price is well above its 21-period while being slightly above its 50-period EMA
  • The price is above its top Bollinger band
  • RSI is neutral and pushing towards the upside (57.49)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $360                                     1: $340

2: $371                                     2: $300

3: $400                                      3: $289

Ripple

XRP made a move towards the upside like Ethereum and Bitcoin, but its move was more alike to Bitcoin’s than Ethereum’s. The third-largest cryptocurrency by market cap managed to gather some bullish pressure and push towards the $0.2454, which barely touched at the time of writing). However, just like with Bitcoin, XRP did not conquer this resistance level yet, and it will have to confirm its position above it in order to bring the attention of more bulls.

XRP might face another resistance level in the form of its 50-period moving average, which sits very close to its current price.

XRP/USD 4-hour Chart

Technical factors:
  • The price is just above its 21-period EMA and right above its 50-period EMA
  • Price is above its top Bollinger band
  • RSI is neutral and moving towards the upside (54.76)
  • Volume is low and stable
Key levels to the upside          Key levels to the downside

1: $0.2454                                  1: $0.235 

2: $0.266                                    2: $0.227

3: $0.285                                   3: $0.221

 

Categories
Forex Daily Topic Forex Price Action

Trendline Trading: How a Trend upon a Trendline Run Longer

In today’s lesson, we are going to demonstrate an example of a chart that made a long bearish move obeying a bearish trendline. The price after forming a bearish trendline does not offer entry to the sellers. It makes a breakout at the first trendline and then produces another bearish trendline ending up offering short entries. Let us now have a look at the chart and find out how it happens.

In today’s lesson, we are going to demonstrate an example of a chart that made a long bearish move obeying a bearish trendline. The price after forming a bearish trendline does not offer entry to the sellers. It makes a breakout at the first trendline and then produces another bearish trendline ending up offering short entries. Let us now have a look at the chart and find out how it happens.

In today’s lesson, we are going to demonstrate an example of a chart that made a long bearish move obeying a bearish trendline. The price after forming a bearish trendline does not offer entry to the sellers. It makes a breakout at the first trendline and then produces another bearish trendline ending up offering short entries. Let us now have a look at the chart and find out how it happens.

The chart shows that it makes two swing lows trending from two swing highs. By joining those points, we can draw a trendline shown in the above chart. The sellers may wait for the price to go back at the trendline’s resistance and produce a bearish reversal candle to go short in the pair. However, the price action has been choppy around the trendline’s resistance. The last candle comes out as a bullish engulfing candle. It does not look good for the sellers.

The price makes a breakout at the trendline’s resistance. It heads towards the North and then makes a strong bearish move. Such price action may puzzle traders. Do you notice something interesting here? Have a look at the next chart.

The sellers may draw another bearish trendline by joining two swing lows. As long as the price makes new lower lows, we can draw a bearish trend line by joining two higher highs. We know what sellers are to do here. Yes, they are to wait for the price to go back to the trendline’s resistance and produce a bearish reversal candle to go short in the pair.

The chart produces a bearish inside bar. It is not a strong reversal candle. However, it is produced at a trendline’s resistance. The sellers may keep their eyes in the pair to go short according to their trading strategies. The price may find its next support at the last swing low. The chart shows that the price has enough space to travel towards the South.

The price heads towards the South at a moderate pace. It makes a long bearish wave, though, by making a breakout at the horizontal support. In the end, it comes out as an excellent trade for the sellers.

If we recap, the first drawn trendline is disobeyed by the price. It is breached, and the chart looks slightly bullish biased. It does not make any more bullish breakout but makes a long bearish move by making a breakout at the last swing low. It gives the sellers an opportunity to draw another bearish trendline, and that ends up offering an excellent entry.

Categories
Forex Market Analysis

Daily F.X. Analysis, September 09 – Top Trade Setups In Forex – U.S. China Conflict in Play! 

On the news front, the Bank of Canada Overnight Rate rate and Rate Statement will be in focus, and it may drive some price action in Canadian pairs. Elsewhere, we don’t have any major events that can drive sharp movements in the U.S. dollar related pairs. Let’s focus on technical levels.

On the news front, the Bank of Canada Overnight Rate rate and Rate Statement will be in focus, and it may drive some price action in Canadian pairs. Elsewhere, we don’t have any major events that can drive sharp movements in the U.S. dollar related pairs. Let’s focus on technical levels.

On the news front, the Bank of Canada Overnight Rate rate and Rate Statement will be in focus, and it may drive some price action in Canadian pairs. Elsewhere, we don’t have any major events that can drive sharp movements in the U.S. dollar related pairs. Let’s focus on technical levels.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The UR/USD pair was closed at 1.17734 after placing a high of 1.18273 and a low of 1.17654. The EUR/USD pair dropped on Tuesday and extended its bearish move for the 3rd consecutive day on the back of a strong U.S. dollar and ahead of ECB monetary policy meeting.

Recently ll eyes have turned towards the upcoming meeting of European Central Bank on Thursday to observe if they will do anything to push inflation pressure higher. Chief Economist Philip Lane has raised concerns over the high prices of local currency the last week. Though the currency has already come under pressure due to currency devaluation expectations or inflation, investors are still awaiting the words from ECB. The currency Euro is facing heavy pressure ahead of ECB’s monetary policy meeting and is weighing on EUR/USD for the past three days. The pair continued following the same pressure and dropped on Tuesday as well.

On the data front, 10:30 GMT, the French Final Private Payrolls for the quarter dropped to -0.8% from the projected -0.6%and weighed on Euro. At 11:00 GMT, the German Trade Balance showed a surplus of 18.0B against the expected 14.9B and supported Euro. At 11:45 GMT, the French Trade Balance was released that remained flat with the expectations of -7.0B. At 13:00 GMT, the Italian Retail Sales for July dropped to -2.2% from the projected 1.1% and weighed on Euro. At 14:00 GMT, the Final Employment Change for the quarter dropped to -2.9% from the forecasted -2.8% and weighed on Euro. The Revised GDP for the quarter from Eurozone dropped by -11.8% against the expected -12.1% and supported Euro. As most data came in against the single currency Euro, the EUR/USD pair came under fresh pressure and dropped on Tuesday to 8th day lowest level.

From the U.S. side, the NFIB Small Business Index was released at 15:00 GMT that advanced to 100.2 against the expected 99.0 and supported the U.S. dollar. The strong U.S. dollar added further pressure on EUR/USD pair and dragged the pair down.

Meanwhile, as the global coronavirus cases have surged to 27.3M, including 893,000 deaths, Spain has become the first nation in Western Europe to exceed half-million COVID-19 total infections. This also weighed on the local currency Euro and added in the currency pair losses.

The U.S. dollar was already strong because of its safe-haven status amid the rising US-China tensions after the tech fight escalated. 

The U.S. has announced tariffs of any American company forcing overseas production. The U.S. has also warned its companies not to work with any Chinese company or face sanctions. Whereas, the greenback was also strong because of the weakness of its rival currency like the Euro and GBP. 

Daily Technical Levels

Support Pivot Resistance
1.1753 1.1791 1.1817
1.1727 1.1855
1.1690 1.1881

EUR/USD– Trading Tip

The EUR/USD is trading with a bearish bias around 1.1780 level, having immediate support at 1.1756 level that’s extended by a double bottom pattern. On the 4 hour timeframe, the violation of the 1.1756 level may extend the selling trend until the 1.1715 level. The EUR/USD may find resistance at 1.1862 and 1.1958 level. Bullish bias seems dominant today.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.29806 after placing a high of 1.31697 and a low of 1.29798. Overall the movement of the GBP/USD pair remained bearish throughout the day. THE GBP/USD pair fell below 1.30 level on Tuesday at the lowest level since 30-July 2020. The pair extended its previous day bearish movement due to a fresh threat by Prime Minister Boris Johnson to leave the E.U. without any deal if progress in talks will not be made till October 15.

Johnson has said that there would need to be an agreement in place by the mid-October deadline when European Council convenes or warned that the U.K. would leave the negotiating table and follow the WTO rules.

However, the talks have become tough after the U.K. has already angered the E.U. members by unveiling plans to introduce a new law that would undermine the withdrawal agreement. Both parties signed the agreement into law and included all terms and conditions of the U.K.’s departure from the bloc.

The new bill aims to create common rules that would apply across the whole of the U.K. are expected to clash with the terms of the withdrawal agreement that requires the Northern Ireland to keep following E.U. rules in the post-Brexit period to avoid a hard border with the Republic of Ireland.

The talks have started on Tuesday between the E.U. chief negotiator Michel Barnier and U.K. chief negotiator David Frost. The U.K.’s controversial move about new law has made the E.U. angry, and the E.U. has said that it will be ready for a no-deal Brexit when the transition period ends on December 31. The British Pound suffered massively as the concerns raised ahead of Brexit talks and dropped below 1.30 level on Tuesday.

On the data front, at 04:01 GMT, the BRC Retail Sales Monitor for the year in August rose to 4.7% from the expected 3.5% and supported British Pound, but the traders ignored it as the focus was shifted towards Brexit talks. The U.S. dollar was also strong in the market due to positive data and safe-haven appeal and also weighed on GBP/USD currency pair. At 15:00 GMT, the NFIB Small Business Index advanced to 100.2 from the expected 99.0 and supported the U.S. dollar that added pressure on GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.2918 1.3049 1.3118
1.2849 1.3249
1.2719 1.3318

GBP/USD– Trading Tip

The GBP/USD is trading with a selling bias at 1.2948 level, set to test the support level of 1.2923 level. The Cable is trading within a downward channel, extending support at 1.2923 level and resistance at 1.3013. On the downside, the GBP/USD pair may find support at 1.2857 level upon the violation of the 1.2923 level. The recent bearish engulfing candle is also in support of the selling trend. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3000 level.  

USD/JPY – Daily Analysis

Today in the European trading session, the USD/JPY currency pair failed to break its thin trading range and still hovering below the 106.50 marks. However, the choppy trading around the currency pair could be associated with the risk-off market sentiment, driven by the US-China tussle and Brexit concern, which eventually underpinned the safe-haven Japanese yen and kept the currency pair under pressure. On the other hand, the broad-based U.S. dollar strength, supportive by the safe-haven demand, becomes the key factor that keeps trying to break the pair’s thin trading range. At this moment, the USD/JPY currency pair is currently trading at 106.30 and consolidating in the range between 106.20 – 106.39.

Despite the optimism over a potential treatment/vaccine for the highly infectious virus, the market risk sentiment remains depressive. Be it the worrisome headlines concerning the Brexit or the tension between the US-China, not to forget the coronavirus issues in the U.S., the market trading sentiment has been flashing red since the European session started, which ultimately keeps the safe-haven assets supportive on the day. 

At the US-China front, the rising tensions between the United States and China continued to pick up the pace as President Trump earlier imposed punitive measures over the Asian major. As a result, China announced new visa restrictions to counter the Trump administration’s action against China. Also fueled the tension could be the fresh headlines suggested that the U.S. is considering banning some or all products made with cotton from China’s Xinjiang region. Apart from this, the Brexit’s gloomy headlines also weighed on the market trading sentiment, which eventually supported the safe-haven appeal in the market and dragged the currency pair down.

Also weighed on the market trading sentiment were the fears of rising COVID-19 cases in the U.S., Europe, and some of the notable Asian nations like India, which fueling fears that the economic recovery could be halt.

On the contrary, the broad-based U.S. dollar succeeded in maintaining its positive traction and remaining bullish on the day amid risk-off sentiment. The U.S. dollar gains were further bolstered by the ongoing upsurge in the U.S. Treasury bond yields. However, the U.S. dollar’s modest gains turned out to be the major factor that capped the pair’s further downside momentum. Whereas, the U.S. Dollar Index, which tracks the greenback against a basket of other currencies, rose by 0.13% to 93.168 by 9:53 PM ET (2:53 AM GMT).


Daily Technical Levels

Support Pivot Resistance
105.7900 106.0900 106.3200
105.5600 106.6200
105.2500 106.8500

USD/JPY – Trading Tips

The USD/JPY is consolidating at 105.928 area, having a resistance mark of 106.025 level. An upward crossover of 106.024 level may extend further buying trend until the 106.480 level, and the violation of this level can extend buying until the next resistance level of 106.840. On the downside, the safe-haven USD/JPY currency may gain support at 105.620 and 105.280. Let’s consider taking a sell trade below 106.024 level as the MACD and RSI also suggest selling bias. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 9 – Will DeFi Bubble Burst, Send Ethereum to Freefall?

The cryptocurrency market had another pullback today, with Bitcoin coming dangerously close to $10,000. Bitcoin is currently trading for $10,087, which represents a decrease of 2.29% on the day. Meanwhile, Ethereum lost 3.26% on the day, while XRP lost 2.52%.

The cryptocurrency market had another pullback today, with Bitcoin coming dangerously close to $10,000. Bitcoin is currently trading for $10,087, which represents a decrease of 2.29% on the day. Meanwhile, Ethereum lost 3.26% on the day, while XRP lost 2.52%.

The cryptocurrency market had another pullback today, with Bitcoin coming dangerously close to $10,000. Bitcoin is currently trading for $10,087, which represents a decrease of 2.29% on the day. Meanwhile, Ethereum lost 3.26% on the day, while XRP lost 2.52%.

 Daily Crypto Sector Heat Map

If we take a look at the top100 cryptocurrencies, IOST gained 11.86% on the day, making it the most prominent daily gainer. TRON (11.78%) and Ontology (7.92%) also did great. On the other hand, the SushiSwap lost 15.01%, making it the most prominent daily loser. It is followed by Hyperion’s loss of 14.32% and Ocean Protocol’s loss of 11.46%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level stayed at the same spot since our last report, with its value is currently at 59.89%. This value represents a 0.05% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone down slightly in the past 24 hours. Its current value is $326.90 billion, which represents a decrease of $6.34 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has been clinging to the $10,000 psychological resistance for the past 24 hours as bears took over the market yet again. The largest cryptocurrency by market cap fell well below $10,000, but quickly recovered and stayed just a bit up for the duration of the day. The reason for the sudden drop is most likely the inability to break the $10,360 resistance level. Lower time-frames show that Bitcoin might have formed a triple bottom formation, which would indicate some form of bullishness.

When it comes to predictions, we are one step closer to the bearish scenario than yesterday. A drop sustained drop below $10,000 could lead us to $9,600 and ultimately to the 200-day SMA ($9,080). On the other hand, if BTC manages to bounce off the current levels and surpass $10,500, a move to $11,000 is likely.


BTC/USD 4-hour Chart

Technical factors:
  • Price is well below its 50-period, while it’s slightly below its 21-period EMA
  • Price is slightly below middle Bollinger band
  • RSI is neutral (43.31)
  • Volume is stable
Key levels to the upside          Key levels to the downside

1: $10,360                                1: $10,015

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

3: $10,850                                 3: $9,600

Ethereum

Ethereum had quite a bad day, with its price falling below the $340 mark. The second-largest cryptocurrency by market cap is already down over 30% from the $490 peak, with many indicators showing bearish scenarios. If the DeFi bubble pops, we can see Ethereum in freefall, though that is unlikely simply due to high yields current investors are collecting from staking.

On the other hand, while some DeFi enthusiasts cashed out and left the market due to the volatility, Ethereum’s gas prices have normalized from its Sept 2nd highs, which may be just enough to push the price slightly up or at least keep it stable.

Traders should pay attention to how Ether handles the $340 level.

 

ETH/USD 4-hour Chart

Technical Factors:
  • The price is slightly below its 21-period and well below its 50-period EMA
  • The price is right below its middle Bollinger band
  • RSI is neutral (41.08)
  • Volume is descending (low)
Key levels to the upside          Key levels to the downside

1: $340                                     1: $300

2: $360                                     2: $289

3: $371                                     

Ripple

XRP has lost a couple of percent of its value, though nothing to be scared of. The third-largest cryptocurrency by market cap tested its support level of $0.235 for a couple of times in the past 24 hours, and all attempts towards the downside failed. Many analysts are calling for XRP’s future rise, but we need to see a drastic change in volume for that to happen.

XRP traders should watch out for volume spikes, as even sideways trading is hard now due to the extremely low volume.

XRP/USD 4-hour Chart

Technical factors:
  • The price is just under its 21-period, while it is well below its 50-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (45.18)
  • Volume is low
Key levels to the upside          Key levels to the downside

1: $0.2454                                  1: $0.235 

2: $0.266                                    2: $0.227

3: $0.285                                   3: $0.221

 

Categories
Forex Price Action

When Key Fibonacci Level Produces an Engulfing Candle

In today’s lesson, we are going to demonstrate an example of a chart that makes a strong bullish move upon producing a bullish engulfing candle at a key Fibonacci level. We know an engulfing candle creates good momentum. If it is created at a significant Fibonacci level, it often pushes the price towards the trend […]

In today’s lesson, we are going to demonstrate an example of a chart that makes a strong bullish move upon producing a bullish engulfing candle at a key Fibonacci level. We know an engulfing candle creates good momentum. If it is created at a significant Fibonacci level, it often pushes the price towards the trend […]

In today’s lesson, we are going to demonstrate an example of a chart that makes a strong bullish move upon producing a bullish engulfing candle at a key Fibonacci level. We know an engulfing candle creates good momentum. If it is created at a significant Fibonacci level, it often pushes the price towards the trend further than traders’ expectations. Let us see and find out what and how that happens.

It is an H1 chart. The chart shows that the price heads towards the South. It keeps making new lower lows. At the last bounce, the chart produces a Morning Star. It may make a bullish reversal now. Let us wait and see whether it makes a breakout at the last swing high or not.

The chart produces four consecutive bullish candles. The price breaches the last swing high. The buyers may wait for the price to consolidate around the breakout level and get a bullish reversal candle to go long in the pair.

It produces a bearish candle closing within the breakout level. The buyers may keep their eyes sharp to see how the next candle comes out. A bullish reversal candle followed by a breakout at the highest high is the signal to trigger a long entry. If the reversal candle comes out as a bullish engulfing candle closing above the resistance, the buyers may trigger a long entry right after the candle closes.

The candle comes out as a bullish engulfing candle closing well above the resistance. The buyers may trigger a long entry right after the candle closes. Since it is an H1 chart, Fibonacci levels come extremely handy to determine the take profit level. We find out that in a minute. At first, let us find out what the price does.

The price heads towards the North with extreme bullish momentum. It produces only one bearish candle and resumes its bullish journey. With naked eyes, we can tell that the price travels about 4R. It means as far as risk-reward is concerned, it is an excellent deal. Let us draw Fibonacci and see price trends from where to where.

The price makes the bullish reversal at 61.8% and heads towards the level of 161.8% in a hurry. It makes a breakout at 161.8% consolidates and resumes its bullish move. Ideally, the buyers should set their take profit at 161.8%. It would allow them to take 1:2 risk-reward. However, we have seen here that the price travels towards the North even further than that. It often happens when the reversal candle comes out as a bullish engulfing candle, and it is produced at the key Fibonacci level at 61.8%. We may not be too greedy but set our take profit at 161.8% in such cases. However, back in our mind, we know that we are dealing with an excellent trade setup.

Categories
Forex Elliott Wave Forex Market Analysis Forex Technical Analysis

Gold Continues its Triangle-Pattern Consolidation

Overview

Overview

Overview

Gold continues on the fifth consecutive week of consolidation. The pattern is developing a contracting triangle which remains incomplete. The internal structure observed in this consolidation pattern suggests a limited upside before completing the corrective formation in progress.

Market Sentiment Overview

The price of Gold continues moving sideways by the fifth week in a row, testing the support on the extreme bullish sentiment zone of the 52-week high and low range. Although the precious metal eases 7.5% from its all-time high at $2,075.14 per ounce to date, the yellow metal report gains over 27.7% (YTD).

The following chart presents the yellow metal in its weekly timeframe. In it we distinguish the price movement testing the extreme bullish zone support located at $1,917.81 per ounce. This market condition leads us to expect a new decline for the coming trading sessions, finding support in the 26-week moving average, which currently moves in the $1,850.10 per ounce.

The potential decline in Gold’s price is backed by the strength of the U.S. Dollar Index, shown in the next intraday chart. In the figure, we observe the Greenback showing recovery signals moving above the 120-hour moving average.

On the other hand, the Gold Volatility index continues consolidating in a flag pattern. As discussed in our previous analysis, the current sideways movement, in progress, converges with gold’s consolidating formation, suggesting a new decline in the valuation of the precious metal.

Summarizing, the market sentiment for the yellow metal reveals the exhaustion of the extreme bullish sentiment that dominated the market participants’ activity until early August when the yellow metal reached its record high at $2,075.14 per ounce. At the same time, the recovery signals unveiled by the U.S. Dollar Index lead us to expect further declines in the precious metal.

Elliott Wave Outlook

The short-term Elliott Wave perspective for the yellow metal illustrated in the following hourly chart reveals a consolidation formation identified as an incomplete contracting triangle pattern.

In the hourly chart, we recognize the price action advancing in an incomplete corrective structural series, which began after the yellow metal topped at $2,075.14 per ounce from where the golden metal started to find sellers. The first decline corresponding to wave (a) of Minuette degree identified in blue found support at $1,832.62 per ounce. This bearish aggressively-looking leg alternates with wave (b), which still remains in progress.

The incomplete wave (b) in progress follows the internal sequence of a contracting triangle pattern, which currently ended its wave d of Subminuette degree labeled in green. According to the Elliott wave theory, the price should develop a marginal advance completing a wave e, in green, before continuing its bearish path. The limited upward move expected corresponds with the potential decline foreseen in the Gold Volatility Index, which shows a consolidation in the form of a flag pattern.

Categories
Forex Basic Strategies

Learning To Trade The ‘Turn To Trend’ Forex Strategy

Introduction

Introduction

Introduction

Although many times before, we have stressed on trading with the direction of the market, yet most traders have a hard time trading with the trend. The observation is contrary to what is said by experts and professional traders since the majority of retail traders claim to be trading with the trend but end up trading counter-trend. While everyone talks of the idiom, “the trend is your friend,” in reality, most traders love to pick tops and bottoms and constantly violate the above rule.

Time Frame

The strategy is fixed to two-time frames. The daily time frame for trend identification and the 1-hour time frame for trade entry.

Indicators

We use the following technical indicators for the strategy:

  • 20-period SMA
  • Three standard deviations Bollinger band (3SD)
  • Two standard deviations Bollinger band (3SD)

Currency Pairs

This strategy is applicable to most of the currency pairs listed on the broker’s platform. However, exotic pairs should be avoided.

Strategy Concept

This setup recognizes the desire of most traders to buy low and sell high but does so in the predominant framework of trading with the trend. The strategy uses multiple time frames and a couple of indicators as it’s a tool for entry. First and foremost, we look at the daily chart to ascertain of the pair in a trend. For that, we use the 20-period simple moving average (SMA), which tells us the direction of the market. In technical analysis, there are numerous ways of determining the trend, but none of them is as simple and easy as the 20-period SMA.

Next, we switch to the hourly charts to find our ‘entry.’ In the ‘Turn to Trend’ Strategy, we will only trade in the direction of the market by buying highly oversold prices in an uptrend and selling highly overbought prices in a downtrend. The question arises, how do we know the market is overbought or oversold? The answer is by using Bollinger bands, which help us gauge the price action.

Bollinger bands measure price extremes by calculating the standard deviation of price from its moving average. In our case, we use the three standard deviation Bollinger band (3SD) and Bollinger band with two standard deviations (2SD). These two create a set of Bollinger band channels. When price trades in a trend, most of the price action will be contained within the Bollinger bands of 2SD and 1SD.

Trade Setup

In order to illustrate the strategy, we have considered the chart of EUR/CAD, where we will be applying the strategy to take a ‘long’ trade.

Step 1

The first step is to identify the major trend of the market. This can be done using the 20-period simple moving average (SMA). If the price is very well above the SMA, we say that the market is in an uptrend. Likewise, if the price is mostly below the SMA, we say that the market is a downtrend. For this strategy, we have to determine the trend on the daily chart of the currency pair.

In our case, we see that the market is in a strong uptrend, as shown in the below image. Hence, we will enter for a ‘long’ trade at the price retracement on the 1-hour time frame.

Step 2

Next, we have to change the time frame of the chart to 1 hour and wait for a price retracement. In order to evaluate the retracement, we plot three standard deviations (3SD) and two standard deviations (2SD) Bollinger band on the chart. After plotting the two Bollinger bands, we need to wait for the price to get into the zone of 2SD-3SD BB.

In the below image, we can see that the price breaks into the zone of 2SD-3SD BB after a lengthy ‘range’ movement.

Step 3

Once the price moves into the zone of 2SD-3SD BB, we wait for the price to bounce off from the lower band of the 3SD BB to give an indication of a reversal. In a ‘short‘ set up, the price should react off from the upper band of the 3SD BB, and give an indication of downtrend continuation. During this process, we need to make sure that the price does not break below or above the 3SD BB. Because if this happens, the ‘pullback’ is no more valid, and this could be a sign of reversal. This is a crucial aspect of the strategy.

The below image shows how the price bounces off from the lower band of the 3SD BB two candles after the price moves into the zone.

Step 4

We enter the market at the first sign of trend continuation, which was determined in the previous step. Now we need to define the stop-loss and take-profit for the strategy. Stop-loss should be placed below the lower band of the 3SD BB, in case of a ‘long’ trade and above the upper band of the 3SD BB, in a ‘short’ trade. The ‘take-profit’ is not a fixed point. Instead, we take our profit as soon as the price touches the opposite band of the 3SD BB.

In the case of EUR/CAD, the resultant risk-to-reward of the trade was a minimum of 1:2, as shown in the below image.

Strategy Roundup

The beauty of this setup is that it prevents us from guessing the turn in the market prematurely by forcing us to wait until the price action confirms a swing bottom or a swing top. If the price is in a downtrend, we watch the hourlies for a turn back to the trend. If the price continues to trade between the 3SD and 2SD BB, we stay away as long as we get confirmation from the market. We can also set our first take-profit at 1:1 risk to reward to lock in some profits.

Categories
Forex Market Analysis

Daily F.X. Analysis, September 08 – Top Trade Setups In Forex – European Data in Focus! 

On Tuesday, the economic calendar offers low impact economic events that may not drive any solid movement in the market. However, the eyes will remain on the German Trade Balance, French Trade Balance, and Revised GDP figures from the Eurozone. EUR currency pairs can show some price action during the day today.

On Tuesday, the economic calendar offers low impact economic events that may not drive any solid movement in the market. However, the eyes will remain on the German Trade Balance, French Trade Balance, and Revised GDP figures from the Eurozone. EUR currency pairs can show some price action during the day today.

On Tuesday, the economic calendar offers low impact economic events that may not drive any solid movement in the market. However, the eyes will remain on the German Trade Balance, French Trade Balance, and Revised GDP figures from the Eurozone. EUR currency pairs can show some price action during the day today.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18120 after placing a high of 1.18485 and a low of 1.18114. The EUR/USD pair dropped on Monday and extended its previous day’s losses due to decreased risk appetite and negative industrial production data from Germany. However, the change in prices was little as the U.S. financial markets were closed for the Labor Day Holiday.

The U.S. Dollar was steady on Monday with a little change in U.S. Dollar Index at 92.895 level. However, the greenback sentiment remained weak after the dovish comments from Jerome Powell on Friday that interest rates will remain lower for longer. The dollar was also steady because of the slow growth in the job sector was reported in August.

On Friday, the U.S. Department of Labor showed slow growth and increased permanent job losses as the government funding was running out. It has raised doubts about the sustainability of the economic recovery. On the Euro front, traders’ focus has shifted to the European Central Bank’s meeting on Thursday this week. As it is expected, ECB will not change policy stance, but the focus will solely remain on the message the ECB will deliver on its inflation forecasts.

The local currency Euro marked a 2-year high at the beginning of the month, and after that, the European Central Bank meeting will hold more importance. Because officials were concerned about the higher Euro prices, it would impact the exports and prices.

On the data front, at 11:00 GMT, the German Industrial Production in July decreased to 1.2% from the expected 4.5% and weighed on the local currency Euro. At 13:30 GMT, the Sentix Investor Confidence for September came in as -8.0 against the expected -11.4 and supported single currency Euro. The decreased German Industrial Production raised concerns over the economic growth and weighed on the Euro that dragged the currency pair EUR/USD on the downside.

The EUR/USD pair was down on Monday because of the European Union’s rising coronavirus cases. On Monday, Spain became the first European country to surpass 500,000 coronavirus cases after the second surge in infections caused after schools were reopened. On Tuesday, the Trade Balance from Germany and France and the Retail Sales data from Italy will be under traders’ focus for finding fresh impetus.

Daily Technical Levels

Support Pivot Resistance
1.1803 1.1826 1.1841
1.1788 1.1864
1.1764 1.1879

EUR/USD– Trading Tip

The EUR/USD is trading with a selling bias around 1.1801 level, heading lower towards the next support area of 1.1780 level. On the 4 hour timeframe, the EUR/USD may find support at 1.1780, the triple bottom level, which is extended by an upward trendline. Below this, the next support is likely to be found around the 1.1725 level.

GBP/USD – Daily Analysis

The GBP/USD failed to stop its previous session losing streak and took further offer below the 1.3150 level while represented 0.96% losses on the day mainly due broad-based U.S. dollar on-going strength, supported by the combination of factors. On the other hand, the reason behind the currency pair declines could also be associated with the rising fears of a no-deal Brexit, which joined the on-going pessimism around the Cable and contributed to the currency pair losses. At this time, the GBP/USD currency pair is trading at 1.3155 and consolidating in the range between 1.3145 – 1.3267.

The GBP currency took a hit on the 1st-day of the week manly after the British Prime Minister Boris Johnson set October 15 as the deadline for a Brexit trade agreement with the European Union, which eventually bolstered the risk of a messy end to the Brexit transition period on December 31. As per the keywords, “U.K. will be ready to trade with the E.U. on Australia type terms if no deal agreed.” He further added, “If no deal reached by October 15 with the E.U., both sides should accept this and move on. Also, fuel the fears could be the reports that the U.K. 

However, the Brexit fears played a major role in weakening the market trading sentiment as the U.S. is on the labor day holiday. Across the pond, the intensifying tensions between the U.S. and China also added a burden around the market trading sentiment. After the U.S. punished Chinese technologies and diplomats by imposing several sanctions, China’s Foreign Ministry urged the U.S. to stop abusing private companies. As per the keywords of China’s Foreign Ministry, “Without evidence, the U.S. has abused national power to take measures on Chinese companies.” This ultimately exerted downside pressure on the trading sentiment and contribute to the currency pair losses.

As in result, the broad-based U.S. dollar flashed green and took the safe-haven bids on the day amid market risk-off sentiment. However, the U.S. dollar gains could also be associated with the upbeat U.S. labor market report, which showed a decline in the unemployment rate and a rise in U.S. Treasury yields. Thus, the gains in the U.S. dollar kept the currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies rose by 0.18% to 92.882 by 12:05 AM ET (5:05 AM GMT).

 Daily Technical Levels

Support Pivot Resistance
1.3109 1.3197 1.3254
1.3052 1.3342
1.2964 1.3398

GBP/USD– Trading Tip

The GBP/USD is trading with a selling bias at 1.3125 level, set to test the support level of 1.3120 level. The Cable is trading within a downward channel, which may extend support at 1.3120 level along with resistance at 1.3186. On the downside, the GBP/USD pair may find support at 1.3051 level upon the violation of the 1.3125 level. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3165 level. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.227 after forming a high of 106.503 and 106.055. Overall the movement of the USD/JPY pair remained bullish throughout the day. The pair USD/JPY moved in the upward direction and posted gains on Monday. The currency pair extended its bullish streak for the 5th consecutive day despite the sow job growth in the U.S. and increasing US-China tensions.

The tensions between U.S. & China further escalated on Monday after the U.S. administration of President Donald Trump announced a ban on the usage of products made from cotton from China’s Xinjiang region. The ban was imposed against the human rights violation in Xinjiang over the forced labor on Muslim minorities.

China’s response to such a ban is yet to come, but it is expected that the latest ban would only increase the lingering tensions between both nations. These conditions helped fade the market risk sentiment and capped on additional gains in the USD/JPY pair on Monday. The greenback gathered strength against its rivals on the back of upbeat macroeconomic data released in the previous week. But the pair’s upside momentum was limited after a sharp decline in the major equity indexes in the U.S. that helped the JPY to find demand as safe-haven.

On the data front, at 10:00 GMT, the leading indicators in July rose to 86.9% compared to June’s 83.8%; it failed to impact USD/JPY’s pair prices as it came in line with the forecast. However, traders’ focus has now shifted towards the second quarter Gross Domestic Product (GDP) and Trade Balance data from Japan that will be released on Tuesday. Markets expect the Japanese economy to contract by 8.1% every quarter. Any better than expected reading would give strength to the Asian stock markets and hurt the Japanese Yen that will add further gains in USD/JPY pair.

According to Johns Hopkins University data on the coronavirus front, the total number of coronavirus cases reached 27 million on Monday. These fears kept the risk sentiment under pressure and weighed on the USD/JPY pair’s gains.

However, the risk sentiment was favored by the latest comments from Steven Mnuchin on Sunday. He said that the new stimulus measures’ details would be delivered by the end of this week. He reiterated that the new bill would provide funds to the federal government through the start of December.

The White House and Congress agreed on the same terms to extend the funding, as confirmed by Nancy Pelosi and Steven Mnuchin. The announcement came to avoid the economic shutdown as the current funding was near to expire at the end of this month. These positive comments from Mnuchin raised the risk sentiment and weighed on the Japanese Yen and pushed the USD/JPY pair higher.


Daily Technical Levels

Support Pivot Resistance
106.1100 106.2500 106.3800
105.9900 106.5100
105.8500 106.6400

USD/JPY – Trading Tips

The USD/JPY is consolidating at 106.250 area, having a resistance mark of 106.485 level. An upward crossover of 106.505 level may extend further, buying into the next resistance mark of 106.850. On the downside, the safe-haven USD/JPY currency may gain support at 106.028 and 105.628. Let’s consider taking a bullish trade over 106.028 level as the MACD and RSI also suggest neutral bias. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Sept 8 – Peter Schiff Buying More Bitcoin; Investors Keep Buying BTC Despite Downside Potential

The cryptocurrency market was quite slow today, with most cryptocurrencies establishing their positions rather than pushing towards upside or downside. Bitcoin is currently trading for $10,329, which represents an increase of 0.64% on the day. Meanwhile, Ethereum lost 2.23% on the day, while XRP lost 0.36%.

The cryptocurrency market was quite slow today, with most cryptocurrencies establishing their positions rather than pushing towards upside or downside. Bitcoin is currently trading for $10,329, which represents an increase of 0.64% on the day. Meanwhile, Ethereum lost 2.23% on the day, while XRP lost 0.36%.

The cryptocurrency market was quite slow today, with most cryptocurrencies establishing their positions rather than pushing towards upside or downside. Bitcoin is currently trading for $10,329, which represents an increase of 0.64% on the day. Meanwhile, Ethereum lost 2.23% on the day, while XRP lost 0.36%.

 Daily Crypto Sector Heat Map

If we take a look at the top100 cryptocurrencies, BitShares gained 9.64% on the day, making it the most prominent daily gainer. Dash (8.35%) and Zcash (5.51%) also did great. On the other hand, the Reserve Rights lost 12.27%, making it the most prominent daily loser. It is followed by Kusama’s loss of 9.38% and Arweave’s loss of 9.26%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s dominance level has gone up slightly, with its value is currently at 59.84%, which represents a 0.23% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up slightly in the past 24 hours. Its current value is $333.24 billion, which represents an increase of $1.71 billion when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin’s price has been holding to the psychological $10,000 support all weekend, trying to stay above it. While the largest cryptocurrency by market cap managed to stay above it, this has been the second day that it couldn’t pass the $10,360 resistance. On top of that, the past 24 hours showed us a much greater spike in volume during a support retest than a resistance test. Lower time frames show that Bitcoin has possibly made a double bottom, which calls for a slightly more bullish scenario.

When it comes to predictions, nothing has changed from yesterday. If the bulls fail to break the $10,360 level soon (and sustain it), the bears will most likely make another attempt to bring the price down. A drop to the 200-day SMA ($9,080) is highly likely. On the other hand, if BTC manages to bounce off the current level and surpass the next one ($10,500), a move to $11,000 is likely. While traders should wait for a bigger move to happen before trading, small profits can be made on sideways-movement trades.

BTC/USD 4-hour Chart

Technical factors:
  • Price is well below its 50-period, while it is at its 21-period EMA
  • Price is slightly above middle Bollinger band
  • RSI has recovered and is neutral (46.38)
  • Volume is stable
Key levels to the upside          Key levels to the downside

1: $10,360                                1: $10,015

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

3: $10,850                                 3: $9,600

Ethereum

Ethereum has broken free from its descending trend as well, with its price consolidating between the $340 and $360 levels. Ethereum tested the $340 level with a strong push towards the downside, but the level held up quite nicely. This may give Ethereum the opportunity to gather its strength and push past the $360 level.

Ethereum’s gas prices have dropped slightly from the highs it reached on Sept 2nd, which may be just enough to push the price slightly up.

Traders should pay attention to how Ether handles the $360 level.


ETH/USD 4-hour Chart

Technical Factors:
  • The price is slightly below its 21-period and well below its 50-period EMA
  • The price is right at its middle Bollinger band
  • RSI is neutral (42.37)
  • Volume is descending (low)
Key levels to the upside          Key levels to the downside

1: $360                                     1: $340

2: $371                                     2: $300

3: $400                                      3: $289

Ripple

XRP has also taken the day to consolidate and establish its presence at the levels it reached after its price plummeted. The third-largest cryptocurrency by market cap is currently trading within the range bound by the $0.235 and $0.2454. The most recent retest of the support level showed that $0.235 will be hard to get through for bears, while the $0.2454, as well as the 21-period moving average, will require a lot more bullish presence to get conquered as well.

XRP traders should either trade within the range or wait for a breakout.

XRP/USD 4-hour Chart

Technical factors:
  • The price is just under its 21-period, while it’s well below its 50-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (44.06)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.2454                                  1: $0.235 

2: $0.266                                    2: $0.227

3: $0.285                                   3: $0.221

 

Categories
Forex Daily Topic Forex Price Action

Trend Line Trading: The Entries to be Skipped

In today’s lesson, we are going to demonstrate an example of a chart that trends towards the North by obeying a trendline. It offers a long entry once the trendline is established. At the fourth bounce, it produces a bullish reversal candle. We find out whether the buyers should take a long entry or not upon getting the bullish reversal candle at the trendline’s support. Let us get started.

In today’s lesson, we are going to demonstrate an example of a chart that trends towards the North by obeying a trendline. It offers a long entry once the trendline is established. At the fourth bounce, it produces a bullish reversal candle. We find out whether the buyers should take a long entry or not upon getting the bullish reversal candle at the trendline’s support. Let us get started.

In today’s lesson, we are going to demonstrate an example of a chart that trends towards the North by obeying a trendline. It offers a long entry once the trendline is established. At the fourth bounce, it produces a bullish reversal candle. We find out whether the buyers should take a long entry or not upon getting the bullish reversal candle at the trendline’s support. Let us get started.

The chart shows that the price heads towards the North upon producing a bullish reversal candle. It consolidates and resumes its bullish journey. The chart looks like the buyers’ hunting ground.

The price upon producing a spinning top, it produces a long bearish candle. It consolidates with some candles and produces a bullish engulfing candle. The buyers may keep an eye in the chart to go long above the last swing high. If the price makes a bullish breakout, the buyers get two swing lows and two swing highs to draw an uptrending trend line.

Here it goes. The price makes a bullish breakout and heads towards the North further. The chart produces a bearish engulfing candle. It may make a bearish correction. As it looks, the chart belongs to the Bull without any doubt.

The price makes a bearish correction; consolidates and heads towards the North again. The breakout traders may find a long opportunity and grab some pips. The price makes a long bearish correction. In fact, it makes a breakout at a significant level of swing low. It seems that the chart is slightly bearish biased. Have a look at the chart below.

The trendline’s support holds the price and produces a bullish engulfing candle. The trendline traders may go long in the pair right after the last candle closes. The last swing high is the safest option to set take profit. It means the risk-reward ratio looks good for the trendline traders.

The price heads towards the North with good bullish momentum. However, it seems that the horizontal level of resistance is too strong to be breached. The price consolidates here with several candles. The last candle comes out as a bearish engulfing candle. The buyers may close the entry. The question is does the price come back to the trendline’s support or it makes a breakout at the highest high.  Let us proceed to the next chart and find out what happens.

The price comes back at the trendline’s support. It produces a hammer. Should the buyers go long from here as far as trendline trading is concerned? Think about it for a minute.

If your answer is ‘No’, you are right. The reason why the buyers should not go long from here is it does not make a new higher high upon getting its last bounce. In fact, traders may wait for the price to make a breakout at the trendline’s support and go short in the pair. In our forthcoming lessons, we will learn about trendline breakout and trendline breakout trading. Stay tuned.

Categories
Forex Market Analysis

Dow Jones Declines Below an Ending Diagonal Pattern

Overview

Overview

Overview

The Dow Jones Industrial Average stopped its progress that started on the March 23rd’s low at 18,213.5 pts, from which it proceeded toward the 29,193.6 pts, reached on September 03rd. This movement made it recover its yearly losses that happened in the first quarter of 2020. The latest decline observed following the ending-diagonal breakdown leads us to warn about a likely bearish scenario.

Market Sentiment Overview

The Dow Jones Industrial Average stopped its advance from the mentioned recovery in our previous analysis. In our previous outlook, we commented about the divergence between the S&P 500 and the Industrial Average, which still did not reach a fresh record high as the S&P 500 did. As the following figure illustrates, the divergence observed between the two U.S. indices drives us to the conclusion that the last all-time high reached by the S&P 500 remains without confirmation by the Dow Jones. This situation carries us to expect the exhaustion of the current stock market recovery.


The next chart illustrates the Industrial Average in its daily timeframe. In the figure, we distinguish the market action moving on an extreme bullish sentiment zone, confirmed by its price action above the 60-day moving average. However, the latest sell-off negated the strike of the opening 2020 price easing near to 1.75% (YTD).

The breakdown observed in the Fear and Greed Index highlighted in yellow, signal the decline of the bullish sentiment prevailing during the previous stock market sessions. This reading adds to the context observed in the Dow Jones Volatility Index daily chart, which remains well in the bearish sentiment zone – above the 60-day moving average. This leads us to suspect that the recovery observed in the stock market is ending.

In consequence, from a market sentiment perspective, our position for the Dow Jones changes from bullish to neutral expecting the bullish continuation or bearish reversal confirmation.

Elliott Wave Outlook

Under the mid-term Elliott Wave perspective, the Industrial Average in its 4-hour chart reveals the completion on September 03rd of the fifth wave of Minuette degree labeled in blue, as the price topped at 29,193.6 pts., where Dow Jones found fresh sellers.

The last Dow Jones rally observed in the previous chart, developed in five waves, illustrates an ending diagonal pattern, which, after the price broke and closed below the line (ii)-((iv), dropped until the wave (iii) in blue. This movement leads us to expect further corrections in the U.S. stock market.

Simultaneously, the completion of the wave ((c)) of Minute degree in black and wave B of Minor degree in green points us to anticipate the development of a regular flat pattern, which follows a 3-3-5 structural sequence. In this context, Dow Jones might start to develop a new decline into five waves.

Finally, our central perspective for the Industrial Average remains neutral, expecting additional confirmation signals for the next movement. If the price action confirms a bearish continuation, the Dow Jones index could find support in 21,000 pts.

Categories
Forex Market Analysis

Daily F.X. Analysis, September 07 – Top Trade Setups In Forex – Labor Day Holiday! 

On the news front, eyes will remain on the U.K. Halifax HPI m/m and European Sentix Investor Confidence figures, but these are hardly expected to drive any market movement today. We may experience a lack of volatility in the market amid the Labor Day holiday in the U.S.

On the news front, eyes will remain on the U.K. Halifax HPI m/m and European Sentix Investor Confidence figures, but these are hardly expected to drive any market movement today. We may experience a lack of volatility in the market amid the Labor Day holiday in the U.S.

On the news front, eyes will remain on the U.K. Halifax HPI m/m and European Sentix Investor Confidence figures, but these are hardly expected to drive any market movement today. We may experience a lack of volatility in the market amid the Labor Day holiday in the U.S.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18370 after placing a high of 1.18652 and a low of 1.17806. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair dropped on Friday amid the broad-based U.S. dollar strength against Euro as the tensions rose in the market that ECB was uncomfortable with the Euro rise. Another reason included in the fall of the currency pair was the strong US Jobs data and weak German Factory Orders. The decreasing risk sentiment due to increased US-China tensions and the rising number of coronavirus also added in the losses of the EUR/USD pair on Friday.

On Thursday, the U.S. dollar extended its gains as investors started to sell Euro against it because the European Central Bank was worried about the rising prices of local currency. This pushed the U.S. dollar 1.3% upside down the 28-month low level that it hit on Tuesday.

Earlier this week, the Euro touched 1.20 level, and the worries increased in the market that the rise in prices had come too fast and strong for the ECB to like it. These concerns were even confirmed by the ECB policymakers that reportedly warned that if the Euro kept increasing, it would weigh on the exports and drag down the prices and eventually increase the need for more monetary stimulus. These concerns also followed the remarks from ECB Chief Economist Philip Lane, who said that the exchange rate does matter for the monetary policy. It weighed on Euro and ultimately dragged the EUR/USD pair on the downside.

On the data side, the German Factory Orders in July were released at 11:00 GMT that decreased to 2.8% from the projected 5.1% and weighed on Euro that added pressure on EUR/USD pair. At 11:45 GMT, the French Government Budget Balance in July reported a deficit of -151.0B compared to June’s 124.9B.

From the U.S. side, the Average Hourly Earnings in August was increased to 0.4% from the forecasted 0.0% and supported the U.S. dollar. The Non-Farm Employment Change remained flat with the expectations of 1371K. In August, the Unemployment Rate also dropped to 8.4% against the forecasted 9.8% and supported the U.S. dollar that added further pressure on EUR/USD pair.

Furthermore, the fading risk sentiment also added in the EUR/USD pair’s losses as the escalating US-China tensions weighed on market sentiment. The Chinese government stopped renewing press credentials for foreign journalists working for American press organizations in China. China has also said that it will proceed with removals if the Trump administration takes any further action against Chinese media employees in the U.S.

Meanwhile, the coronavirus cases in Europe rose again and jumped back to the figures recorded in mid-March, the time of disease peak across the continent. Spain saw the highest daily cases since April and recorded 8959 cases in just 24 hours. Spain is one of the hardest-hit European countries by the coronavirus pandemic, with 488,513 cases. These pandemic related tensions also kept the risk sentiment under pressure that weighed on local currency and added the EUR/USD pair’s losses.

Daily Technical Levels

Support Pivot Resistance
1.1828 1.1838 1.1844
1.1821 1.1855
1.1811 1.1861

EUR/USD– Trading Tip

The EUR/USD bounced off over the support level of 1.1795, and now it’s heading further higher until the next target of 1.1890. The pair may find an immediate resistance at 1.1860 level. Conversely, the EUR/USD may find support at 1.1808 and 1.1780 levels. We can expect choppy trading today amid U.S. bank holidays in the wake of labor day. Neutral bias prevails in the market today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.32820 after placing a high of 1.33189 and a low of 1.31754. Overall the movement of the GBP/USD pair remained flat throughout the day. The GBP/USD pair dropped to 6-days lowest level on Friday after the release of dismal PMI data from Britain and more stimulus hopes from the U.K. Another factor involved in the GBP/USD pair’s downward momentum was the increased risks of no-deal Brexit.

On Friday, the British Pound fell and posted weekly losses for the first time in the month as experts warned that any potential recovery could get limited by the threats of no-deal Brexit. The recent success of the British Pound was partly due to the U.K. government’s success in preventing a second wave of coronavirus. However, the fears that the virus could return and could persist for a very long period as long as it is not contained in Europe weighed on GBP. The number of cases in European countries increased day by day, and it has also kept the GBP/USD pair.

Furthermore, the end of the Brexit transition period is near, and it has also brought the risk of a no-deal Brexit more into focus. No-deal has been reached so far, and in case of no-deal, the U.K. would trade with the E.U. on World Trade Organization rules from next year onward. It could affect both sides in real economic terms but above all for the British economy. It is because the European Union is the largest trading partner of the United Kingdom. These Brexit tensions also weighed on local currency and kept the GBP/USD pair under pressure on Friday.

Meanwhile, the monetary policy also offered reasons for caution on the British Pound after the Bank of England monetary policy committee members, including Governor Andrew Bailey, suggested negative interest rates could have a role play in the recovery of the economy. These dovish comments from BoE’s governor weighed on the local currency that dragged the pair GBP/USD towards the six days lowest level at the ending day of the week.

On the data front, at 13:30 GMT, the Construction PMI from Great Britain in August reported a decline to 54.6 from the anticipated 58.5 and weighed on the Sterling that ultimately weighed on GBP/USD pair. Whereas from the U.S. side, the Unemployment rate decreased to 8.4% from the projected 9.8%, and the Average Hourly Earnings rose to 0.4% against the estimated 0.0% and supported the U.S. dollar.

The weak Sterling and the strong Greenback played an important role in pushing the GBP/USD pair downward. Furthermore, On Friday, the interest-rate-setter of Bank of England, Micheal Saunders, said that it was possible that more stimulus would be needed for the U.K.’s economy that has been hit by the pandemic. This need for more stimulus confirmed by an official BoE’s member raised the concerns of recovery and weighed on the local currency and added pressure on GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.3231 1.3257 1.3274
1.3214 1.3300
1.3188 1.3317

GBP/USD– Trading Tip

The GBP/USD is trading with a selling bias at 1.3205 level, set to test the support level of 1.3168 level. The Cable is trading within a downward channel, which may extend support at 1.3175 level along with resistance at 1.3265. On the downside, the GBP/USD pair may find support at 1.3086 level upon the violation of the 1.3172 level. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3250 level. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.184 after placing a high of 106.551 and a low of 106.000. Overall the movement of the USD/JPY remained flat yet bullish throughout the day. The USD/JPY pair extended its bullish streak for the 4th consecutive day and rose to a high of 106.5 level on Thursday on positive U.S. jobless claims and services PMI data. However, the pair failed to remain higher and lost most of its daily gains in the late session as the Japanese Yen found demand as a safe-haven.

The U.S. stock market slipped sharply during last week, with S&P 500 and the Nasdaq Composite indexes down by 3.5% and 5.05%. The fall in equities was caused by the lack of progress in the next coronavirus stimulus package by the U.S. government and overdue correction.

Moreover, the US-Treasury yields for the 10-year note lost almost 5%, and the U.S. Dollar Index stayed in the positive territory near 92.8 level as the greenback continued to perform higher against its risk-sensitive rival currencies and helped the USD/JPY to limit its fall in the second session.

On the data front, at 17:30 GMT, the Unemployment Claims from last week were dropped to 881K from the projected 955K and supported the U.S. dollar that added further gains in the USD/JPY pair. 

The Revised Non-farm Productivity for the quarter raised to 10.1% from the forecasted 7.3% and weighed on the U.S. dollar. The Revised Unit Labor Costs for the quarter declined to 9.0% from the anticipated 12.0% and pressured on the U.S. dollar. The Trade Balance in July showed a deficit of 63.6B against the expectations of 58,2B deficit and weighed on the U.S. dollar. At 18:45 GMT, the Final Services PMI for August rose to 55.0 from the expected 54.8 and supported the U.S. dollar that added strength in the USD/JPY pair. At 19:00 GMT, the ISM Non-Manufacturing PMI remained flat with the expectations of 47.0 and had almost no effect on the U.S. dollar.

The decrease in Unemployment claim benefits and rise in Final Services PMI gave a push to U.S. dollar and USD/JPY pair gains on Thursday.

On the coronavirus front, 25.8 million people have been reported to be diagnosed from coronavirus globally. Almost 17 million people have been reported to be recovered, while more than 850,000 have reported as dead. On Wednesday, after easing the pandemic restrictions, India reported more than 78000 cases in a single day and surpassed the U.S. for a daily case record of coronavirus.

Australia saw the biggest drop in GDP for the quarter and was pushed into recession for the first time since 1991 amid a pandemic crisis and its effect on the economy. These lingering concerns over the coronavirus kept the safe-haven demand for Japanese yen on board and limited the USD/JPY pair’s gains.


Daily Technical Levels

Support Pivot Resistance
106.2400 106.2800 106.3500
106.1700 106.3900
106.1300 106.4600

USD/JPY – Trading Tips

The USD/JPY is consolidating at 106.250 area, having a resistance mark of 106.485 level. An upward crossover of 106.505 level may extend further, buying into the next resistance mark of 106.850. On the downside, the safe-haven USD/JPY currency may gain support at 106.028 and 105.628. Let’s consider taking a bullish trade over 106.028 level as the MACD and RSI also suggest neutral bias. Good luck!