Tag: Trade Setup

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Forex Daily Topic Forex Price-Action Strategies

Remember the Rule ‘Set and Forget’

In today’s lesson, we are going to demonstrate an example of H1 breakout trading. Usually, in this strategy, the price goes towards the direction with good momentum if things go accordingly. In this example, the breakout candle, breakout confirmation candle are immaculate, but it takes a long pause before it hits the target. It has a lesson to give us. Let us dig into this.

In today’s lesson, we are going to demonstrate an example of H1 breakout trading. Usually, in this strategy, the price goes towards the direction with good momentum if things go accordingly. In this example, the breakout candle, breakout confirmation candle are immaculate, but it takes a long pause before it hits the target. It has a lesson to give us. Let us dig into this.

In today’s lesson, we are going to demonstrate an example of H1 breakout trading. Usually, in this strategy, the price goes towards the direction with good momentum if things go accordingly. In this example, the breakout candle, breakout confirmation candle are immaculate, but it takes a long pause before it hits the target. It has a lesson to give us. Let us dig into this.

The price after being bearish finds its support. It consolidates for a while and produces a bearish pin bar followed by a bearish engulfing candle. Traders are to wait for a breakout at the level of support to get them prepared to go short on the pair.

The last candle breaches the level of support and closes well below the level. The candle is having a tiny lower spike. Ideally, H1 breakout strategy traders wait for such a breakout candle.  They are to wait for the next H1 candle to close below the breakout candle. If that happens, the game is on. Let us proceed to the following chart.

As expected, the next candle closes below the breakout candle. The candle looks very bearish, being an ideal candle to confirm the breakout. The sellers may trigger a short entry right after the last candle closes. Let us have a look at the same chart with some calculations in it.

The sellers may set the level of stop-loss above the level where the trend is initiated. They may set the take-profit level with 1:1 risk-reward. It means

Entry- Stop Loss= Take Profit-Entry.

The price consolidates after the signal candle. It bounces at the level, where it bounced some hours earlier. This is the first sign of a double bottom. It looks the buyers may take over the control, which may make the price hit the stop loss. You may remember, in one of our lessons, it has been recommended that a trader may have to close his entry manually. It was an example of the Friday market. Today’s market is not the Friday market. Thus, we must not close it manually, as it may get us a loss, but we must let it run. Let us wait and see how it ends.

It looks much better now. The price heads towards the South with good bearish momentum. It may not take much time to hit the target.

It does not go according to your calculation. It takes much longer than our expectations. However, it hits the target at last. The lesson that we have learned here is we must let a trade run to do its bit. Once we take entry after measuring the risk-reward, we must be patient. In a word, we must remember the rule ‘set and forget.’

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Forex Basic Strategies

Identifying Accurate Trading Signals Using The Dark Cloud Cover Candlestick Pattern

Introduction

Introduction

Introduction

Dark Cloud Cover is a bearish reversal candlestick pattern. It essentially shows the shift in momentum from the buyers to sellers. This pattern is formed by a bullish candle, which is then followed by a bearish candle. Traders can look for an entry on the next red candle. The Dark Cloud Cover pattern can only be used when it occurs in an uptrend. Because, if the price rises above the Dark Cloud Cover pattern, it becomes less significant to trade. It is essential to know that the bearish engulfing pattern and Dark Cloud Cover pattern are very similar in their appearance. If the second candle of the pattern closes below the previous candle, you have the bearish engulfing pattern; if not, it is a dark cloud pattern.

Criteria to identify the Dark Cloud Cover pattern 

  1. The market must be in an existing uptrend.
  2. The first candle must be bullish candle within that uptrend.
  3. A gap must be on the following day.
  4. The gap up candle must close into a bearish candle.

Dark Cloud Cover Pattern – Trading Strategies

DCC + MACD Indicator

As we always say, do not trade any pattern stand alone in the market. Pairing the pattern with other credible trading tools like indicators or oscillators will dramatically increase the odds of your trades. In this strategy, we have paired the Dark Cloud Cover pattern with the MACD indicator to filter out the low probability trades. MACD indicator stands for Moving Average Convergence and Divergence. It is one of the most popular indicators that has been in use since the late 1970s. It belongs to the oscillator family, and it is designed to measure the magnitude, direction, and rate of change in any underlying currency pair.

STEP 1 – First of all, find the Dark Cloud Cover pattern in an uptrend.

STEP 2 – Wait for a MACD Crossover

Once you have found the Dark Cloud Cover pattern, the next step is to take the sell trade when MACD gives crossover at the oversold area.

As you can see in the below daily chart of the GBPJPY forex pair, the price action turned sideways for some time. After that, it prints the Dark Cloud Cover pattern, and at the same time, we can see the MACD indicator giving a reversal at the overbought area. This is a potential sign for us to go short on this pair.  As mentioned earlier, do not confuse between the Dark Cloud Cover and Engulfing Pattern. In a Bearish engulfing pattern, the red candle completely takes over the preceding green candle, whereas, in the Dark Cloud Cover pattern, the red candle takes over only 50% of the previous green candle.

Step 3 – Take Profit and Stop loss

In this strategy, we have closed our full position at the major support area, and stop-loss was above the Dark Cloud Cover pattern. Price action holds below the support area, but it immediately came back, and prints a brand new higher high. We can also close our positions based on the MACD indicator. When the MACD indicator reversed at the oversold area, it’s a perfect sign to exit our position. Always remember the sure sign of market reversal is when the price action is at the significant support area and the MACD lines crossover at the oversold region.

DCC + Donchain Channel

In this strategy, we have paired the Dark Cloud Cover pattern with the Donchain Channel. Richard Donchain developed the Donchain channel indicator in 1936. He was a fund manager, writer, and also known as the father of trend trading. Once the Donchain channel indicator is plotted on to the price chart, it helps the traders to visualize the price of an asset and if it is relative to the upper and lower bounds of the indicator.

STEP 1 – Find out the Dark Cloud Cover pattern in an uptrend.
STEP 2 – Check if the price action respects the upper Donchain Channel

Once you find the Dark Cloud Cover pattern in an uptrend, the next step is to check if the price action respects the upper Donchain Channel.

The image below represents the EUR/AUD forex pair, and the price action was held at the major resistance area. Before printing the Dark Cloud Cover pattern, the price hits the upper bound of the Donchain channel twice. When price action hits the upper bound of the Donchain channel and if the market prints the Dark Cloud Cover pattern at the same time, it is a clear indication of sellers stepping into the market. After the completion of the pattern, we activate our trade, and for a profit-booking, we aim for the second target.

STEP 3 – Take Profit and Stop loss

In this example, we have two target areas. If you are a short term or intraday trader, then exit your position at first support area, and if you are a positional trader or a swing trader, then go for target two. When you activate your trade and if the market has two major support areas, always try to exit your position at target two, because the end goal of every trader is to make as much money as possible when the market gives them an opportunity & minimize the losses when the trade goes against them. The placement of stop-loss should always be above the Dark Cloud Cover pattern.

Bottom Line

The Dark Cloud Cover is quite a popular trading pattern in the industry, and it can easily be recognized on the price charts. This pattern is only useful or reliable to trade when it appears in an overall uptrend. This pattern identifies the shift in momentum from buyers to sellers. The test of the resistance line or trend line can be used as a confirmation tool to take sell trades. If you are using the Dark Cloud Cover pattern alone, always use it on the higher timeframe. Also, use more significant stop loss because none of the indicators or patterns are capable enough to indicate accurate signals all alone. On a lower timeframe, this pattern often provides some false signals. Still, by pairing it with other trading indicators, we can dramatically filter out the low probability signals.

We hope you find this article useful. Try trading this pattern with the indicators we have mentioned above to maximize your profits, as these combinations have been back-tested by experienced traders. Cheers!

Categories
Forex Basic Strategies

How To Trade The ‘Three Black Crows’ Pattern Like A Professional Forex Trader

Introduction

Introduction

Introduction

Three Black Crows is a bearish candlestick pattern that consists of three consecutive red candles. This is a visual pattern and can be identified easily on the price action charts. The Three Black Crows pattern essentially indicates a shift in control from bulls to bears. In the book known as ‘Candlestick Trading Technique,’ Steve Nison says that this pattern is one of the most useful ones for longer-term trades.

⭐ In an uptrend, this pattern consists of three consecutive bear candles that have large bodies of roughly the same size. The Three Crows pattern confirms the strength of the sellers.

⭐ Each candle should be open and close lower than the previous candle.

⭐ Each candle should mark a successive decline in price action and should not have long shadows or wicks. Using this trading pattern in conjunction with other technical indicators will enhance the probability of winning the trade.

Trading Strategies With Three Black Crows Pattern

TBC Pattern + Bollinger Bands

In this strategy, we have paired the Three Black Crows pattern with the Bollinger Bands to identify accurate trading signals. The Bollinger Bands indicator is developed by the technical trader John Bollinger. It consists of a centerline and two bands above and below the price chart. The bands of the indicator contract and expand according to the different market conditions. In a volatile market, the bands of the indicator expand and in a dying market condition the bands’ contract.

Step 1 – First of all, find the Three Black Crows Pattern in an uptrend.

Step 2 – Take a sell-entry when the Three Black Crows pattern hit the upper band of the Bollinger Bands Indicator.

In the above chart of the NZD/USD forex chart, we can see that the pair was in an overall uptrend. Around the 4th of November, price action prints Three Black Crows, which is an initial clue to go short. Furthermore, price action also respects the Bollinger upper band, which is a sign to go short on this pair.

Step 3 – Stop-loss & Take Profit

Placing accurate Stop loss is one of the most critical aspects of successful trading. Some of the novice traders never use stop loss, and it is the biggest mistake they do. We always suggest the traders use the stop-loss order in every trade they take. If you have the fear that your trade might hit the stop loss, then use a deeper stop loss and expect only 1R trades. If you are an aggressive trader, then stop loss above the Bollinger bands is the safest idea.

The basic idea most of the traders have is to exit their positions when price action hits the lower band of the Bollinger band indicator. If you follow this strategy, there will be fewer chances of you making money. Because price action moves in cycles, and prices often hit the upper and lower bands. We suggest you always use the higher timeframe major support area for booking your profits. You can also close your position when the market prints the Three White Soldiers pattern, which is quite the opposite of the Three Black Crows pattern.

In the above example, we have closed our full position when the market reached a previous major support area. Most of the time, price action always reacts from a significant support area. In our case, when we closed our position (yellow dotted line), price action immediately changed its direction.

TBC Pattern + MACD Indicator

In this strategy, let’s learn how to trade the Three Black Crows pattern by combining it with the MACD indicator to identify reliable trading signals. MACD is a trend following indicator, and it stands for Moving Average Convergence and Divergence. This indicator consists of a histogram, moving averages, and a centerline. Traders use the MACD moving average crossovers to identify the trading signals. When the moving averages of the indicator go above the zero-line, it indicates a buy signal. Likewise, when it goes below the zero-line, it indicates the sell signal.

Step 1 – First of all, find the Three Black Crows Pattern in an uptrend.

Step 2 – The strategy is this – when market prints the Three Black Crows pattern, see if there is a crossover happening on the MACD indicator at the overbought area. If there is a crossover, it is a clear sign to go short in any underlying currency pair and vice-versa to go long.

In the image below, GBP/CAD was in an overall uptrend. When price action prints the Three Black Crows pattern, it indicates the ongoing trend reversal in the near future. Furthermore, when crossover happened on MACD, it’s a clear signal that the GBP/CAD is ready to start a downtrend afresh. After our entry, price held for a bit at the support area and dropped to print a brand new lower low.

Step 3 – Stop-loss & Take Profit

Put the stop loss above the first candle of the Three Black Crows pattern and close your whole position when price action reached a significant support area.

As you can see in the image below, we closed our full position at the major support area. Overall it was not a smooth ride, but our position didn’t go into loss even for a single time. Traders can also close their positions according to market situations, or according to their trading style.

Bottom Line

Three Black Crows pattern is one of the most famous and popular trading patterns out there. This pattern can be used to identify the trend reversals in an upward market. Whenever you find a Three Black Crows pattern on the price chart, we suggest you sit up straight and understand if this pattern has the potential to reverse the market or not. It is always advisable to pair this pattern with other trading tools to confirm the indication. Traders can also use this pattern to enter or exit a trade. Some traders use this pattern with the combination of other trading tools in order to close their full position. The end goal is to use this pattern to identify trading opportunities and trend reversals more accurately. Cheers!

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Forex Market Analysis

The Safe-Haven-Metal Prices Rose on IMF Report & China Virus Headlines!

On Tuesday, gold prices inched up mainly due to the International Monetary Fund (IMF) report, which indicated a gloomy outlook for 2020. Gold traded 0.4% to $1,566.65 before falling to 1,555 during the European session.

On Tuesday, gold prices inched up mainly due to the International Monetary Fund (IMF) report, which indicated a gloomy outlook for 2020. Gold traded 0.4% to $1,566.65 before falling to 1,555 during the European session.

On Tuesday, gold prices inched up mainly due to the International Monetary Fund (IMF) report, which indicated a gloomy outlook for 2020. Gold traded 0.4% to $1,566.65 before falling to 1,555 during the European session.

The IMF decreased its forecast for global growth this year to 3.3% from 3.4% in October. The estimates for the U.S. and Eurozone were both lowered by the same amount. This report sent the prices of the safe-haven metal higher point, whereas the equities to the lower positions.

On the other hand, the safe-haven metal also got some support due to the risk-off market sentiment in the wake of the corona-virus outbreak in China.

Gold prices earlier boosted mainly due to the headlines regarding the China virus, which gained market attention. Because of the virus, four people were reported as dead in China, and an Australian man has also been recently tested for this human transmitted disease. As a precautionary measure, Wuhan has created a Wuhan Pneumonia control center to stop further spread of the disease. Meanwhile, he has also strongly suggested that markets and public transportation stations should be supervised strictly to prevent this virus from spreading further.

At the geopolitical front, unrest in Iraq during the weekend was also in focus, while it did not give any meaningful support to gold prices. At the USD front, the reason behind the greenback strength could be the rising expectations because of upbeat economic events that the economy of the United States will continue to expand.

Daily Support and Resistance

S3 1551.67
S2 1556.16
S1 1558.45
Pivot Point 1560.65
R1 1562.94
R2 1565.14
R3 1569.63

On the 4 hour chart, gold has violated the bullish channel, which was supporting it around 1,553. Violation of this level can extend selling until 1,549. Besides that, gold has formed a bearish engulfing pattern is also suggesting chances of a bearish trend in the gold. The violation of 1,549 can open bearish bias until 1,544 today. Good luck!

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Forex Price-Action Strategies

Does the ABC Pattern Give Any Clue about the C Point?

We have learned about the ABC pattern in some of our previous lessons. The C point is the most crucial factor to trade on the ABC pattern. Traders use Fibonacci retracement, flipped support/resistance to spot out the C point. Fibonacci retracement works like magic, which we will learn soon. In today’s article, we will demonstrate […]

We have learned about the ABC pattern in some of our previous lessons. The C point is the most crucial factor to trade on the ABC pattern. Traders use Fibonacci retracement, flipped support/resistance to spot out the C point. Fibonacci retracement works like magic, which we will learn soon. In today’s article, we will demonstrate […]

We have learned about the ABC pattern in some of our previous lessons. The C point is the most crucial factor to trade on the ABC pattern. Traders use Fibonacci retracement, flipped support/resistance to spot out the C point. Fibonacci retracement works like magic, which we will learn soon. In today’s article, we will demonstrate an example of an ABC pattern and try to find out whether it gives us any clue about the level before it produces the C point.

This is a daily chart. The price after being very bearish makes a bullish move. The price produces a bearish reversal candle. It is an inside bar not being a strong bearish reversal candle. However, we must notice where it is produced. Let us have a look at the same chart with some horizontal lines.

Look at the chart now. The price reacted at the level earlier. The level worked as a strong level of resistance and drove the price towards the downside. This time, the level produces a bearish reversal candle. The ABC pattern traders usually wait for such price action around such levels. To take an entry, the daily-H4 chart combination traders are to flip over to the H4 chart.

The price produces a reversal candle. It may consolidate now. The sellers are to get a bearish reversal candle and to find out a level of resistance to set their Stop Loss above it. A breakout at the level of support is the signal to trigger a short entry.

The price consolidates. Upon getting its resistance, it makes a breakout. A short entry may be triggered right after the last candle closes. The price may find its next support at the red-marked level (point B). Let us find out how the trade goes.

The trade goes well. The price heads towards the Take Profit with extreme bearish pressure. Since this is an ABC pattern’s daily-H4 chart combination, the price may travel towards the South further. The sellers may consider taking partial profit here. Taking Partial Profit usually increases our chance of getting more pips. When we can find out an ABC pattern, and we are trading on the C point, it often gets us more profit in the end. To be able to spot out the C point, we must practice a lot with Fibonacci retracement, eyeing on flipped levels, and previous levels of support/resistance.

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Forex Market Analysis

Crude oil gains support – Is It a good time to go long?

The WTI crude oil prices unchanged and maintain its biggest gain in the wake of sluggish economic growth in China, the world’s largest crude importer, as it increased concerns regarding the fuel demand.

The WTI crude oil prices unchanged and maintain its biggest gain in the wake of sluggish economic growth in China, the world’s largest crude importer, as it increased concerns regarding the fuel demand.

The WTI crude oil prices unchanged and maintain its biggest gain in the wake of sluggish economic growth in China, the world’s largest crude importer, as it increased concerns regarding the fuel demand.

In the 4th-quarter of 2019, the world’s 2nd-largest economy grew by an expected 6% from a year earlier, whereas the full-year expansion was 6.1%, the slowest in 29 years. The U.S. West Texas Intermediate dropped 7 cents at $58.45 a barrel, having risen more than 1% in the previous session. The contract was down about 1% for the week and also set for a second weekly decline.

WTI crude oil prices rose yesterday after the United States and China signed the phase-one trade agreement. The sentiment in the market was further recovered after the United States Senate approved changes to the U.S.-Mexico-Canada Free Trade Agreement.

On the flip side, decreasing chances of the US-Iran war and the U.S. dollar strength, which generally weighs on the commodity basket. The International Energy Agency gave a dark picture of the oil market outlook for 2020 on Thursday. The agency expected that oil supply would exceed demand for crude from the Organization of the Petroleum Exporting Countries (OPEC), even if members are fully compliant in their agreement with Russia and other producers to curb output, a grouping known as OPEC+.

On the other hand, the United Arab Emirates energy minister said this week that he is expecting a positive meeting with OPEC and its allies to meet next in March.

Daily Support and Resistance

S3 55.83
S2 57.1
S1 57.86
Pivot Point 58.37
R1 59.13
R2 59.64
R3 60.91

The U.S. Oil is holding around 58.80 with a bullish bias to target a 23.6% Fibonacci retracement mark of 59.46. On the higher side, further bullish bias can lead to crude oil prices towards 60.60, which marks 38.2% Fibonacci retracement. Today consider staying bullish above 58.40 to target 9.45. Good luck!

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Forex Market Analysis

AUD/USD Currency Pair Seesaws Near 0.6900 As Traders Want More Clarity Regarding Sino-US Trade deal.

The AUD/USD currency pair flat near the 0.6900, mainly due to mixed sentiment regarding the Sino-US trade deal. As of writing, the AUD/USD currency pair is currently trading at 0.6920. The currency pair recently benefited from the Sino-US phase-one trade deal signing and positive comments from the U.S. and Chinese trade negotiators.

The AUD/USD currency pair flat near the 0.6900, mainly due to mixed sentiment regarding the Sino-US trade deal. As of writing, the AUD/USD currency pair is currently trading at 0.6920. The currency pair recently benefited from the Sino-US phase-one trade deal signing and positive comments from the U.S. and Chinese trade negotiators.

The AUD/USD currency pair flat near the 0.6900, mainly due to mixed sentiment regarding the Sino-US trade deal. As of writing, the AUD/USD currency pair is currently trading at 0.6920. The currency pair recently benefited from the Sino-US phase-one trade deal signing and positive comments from the U.S. and Chinese trade negotiators.

Apart from the Sino-US trade deal, China also cheered Trump administration as the U.S. removed China from the currency manipulator list. Besides, the latest comments from the United States Senate leader McConnell who sent optimism that the latest United States–Mexico–Canada Agreement (USMCA) will pass the house on Friday, also supported the Aussie.

While the U.S. Vice President Mike Pence said that Phase 2 talks had already started and officials are struggling to resolve disputes. As in result, the risk-on sentiment improved in the market, and ultimately riskier assets also got support.

Looking forward, November month Home Loans and Investment Lending for Homes from Australia will be followed by China’sChina’s December month House Price Index to offer a fresh direction to the pair.

Daily Support and Resistance

S3 0.682
S2 0.686
S1 0.6881
Pivot Point 0.6899
R1 0.6921
R2 0.6939
R3 0.6978

Technically speaking, the AUD/USD is trading bullish at 0.6920 within a bullish channel, which is keeping the Aussie on the higher side. The AUD/USD pair is likely to find resistance around 0.6930, but the latest higher’s high pattern may drive more buying in the AUD/USD pair.

The MACD and RSI are crossing over in the bullish zone, and these may underpin the demand for AUD/USD. On the higher side, the bullish breakout of 0.6930 is likely to lead Aussie prices towards 0.6960, while support continues to stay around 0.6900. Let’sLet’s stay bullish above 0.6910 today. Good luck!

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Forex Market Analysis

Gold Sideways Pattern Intact – Brace for a Breakout! 

The safe-haven-metal prices flashed green and rose by 0.6% to $1,553.15, mainly due to fresh uncertainty surrounding the United States and China phase-one trade deal.

The safe-haven-metal prices flashed green and rose by 0.6% to $1,553.15, mainly due to fresh uncertainty surrounding the United States and China phase-one trade deal.

The safe-haven-metal prices flashed green and rose by 0.6% to $1,553.15, mainly due to fresh uncertainty surrounding the United States and China phase-one trade deal.

At the Sino-US front, the United States decided that it will not remove tariffs on Chinese imports until the 2020 presidential elections. As a result, uncertainty surrounding the signing ceremony of phase one of the trade deal between the US and China emerged in the market. The meeting to sign the agreement is scheduled for today, while no details have yet been revealed regarding the contents of the trade deal.

It should be noted that the market traders are cautious and await for any detail release regarding the Sino-US phase-one trade deal ceremony for taking new directions. The meeting will take place today at the White House between the US & China (reportedly 11:30 am NY time but not confirmed).

The yellow metal rose at the starting of this week in the wake of U.S.-Iran tensions. However, risk sentiment recovered after when the two nations said they did not seek an intensification of the war. Therefore, we can say Iran-US war matter was the big reason behind the bullish gold rally last week.

On the other hand, the declining Treasury bond yields seem to push the greenback lower as well. The US Dollar Index, which tested the 97.50 marks earlier in the day, is now down 0.03% at 97.35. 

    


Daily Support and Resistance

  • S3 1518.31
  • S2 1531.09
  • S1 1538.79

Pivot Point 1543.86

  • R1 1551.57
  • R2 1556.64
  • R3 1569.41

Gold surged as the US Core CPI number undershot economists anticipate and poorly performed, sending bullish reversal in the gold. Currently, precious metal gold is trading over a strong support level of 1,551, and the extension of trading over this level can encourage further buying in the gold. 

Alternatively, the next resistance is expected to appear nearby 1,556 and 1,559. The breach of 1,551 can lead to gold towards 1,546. The bullish bias remains active today. Good luck! 

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Forex Market Analysis

Gold’s Sideways Range Remain Intact – Brace for Trade Plan!

The safe-haven-metal prices dropped mainly due to the Asian stocks, which traded higher in the wake of optimism surrounding the United States and China trade war.

The safe-haven-metal prices dropped mainly due to the Asian stocks, which traded higher in the wake of optimism surrounding the United States and China trade war.

The safe-haven-metal prices dropped mainly due to the Asian stocks, which traded higher in the wake of optimism surrounding the United States and China trade war.

As we already mentioned that the gold prices dropped on the day because the United States is expected to sign the on-going phase-one trade deal with China this week.

According to the agreement, China will increase imports from the U.S. in exchange for the stop of the December tariffs on Chinese imports to the U.S. and a partial rollback of some existing tariffs.

At the Iran-US front, the situation in Iran is still active due to people’s rally as its citizens protested for a 2nd-night after the government acknowledged on Saturday that it had mistakenly show down a Ukrainian passenger jet, killing all 176 people on board.

On the other hand, the gold prices got some support from the stable bond prices in the wake of unexpectedly weaker December U.S. payroll growth. That sent the interest lower and giving attraction to the non-yielding gold.

Iran’s statement came only after the U.S., U.K., Canada, and Australia said they know that an Iranian missile hit the plane according to our intelligence, but Iran did not accept it first.

Looking forward, further important U.S. macro is scheduled to release this week and will remain under the trader’s focus to take fresh direction. The U.S. economic docket this week shows the release of the latest consumer inflation figures on Tuesday, and monthly retail sales data is scheduled to release on Thursday.

Daily Support and Resistance

S3 1523.29
S2 1540.25
S1 1551.19
Pivot Point 1557.21
R1 1568.15
R2 1574.17
R3 1591.13

Gold continues to consolidate in the same trading range, which it maintains on Friday. The metal is trading around 1,552 level while it’s current trading range appears to be 1,561 – 1,543.

On Monday’, gold’s most important trading level will be 1,556. Beneath this mark, gold can trade with selling bias unto 1,550 and 1,545. Whereas, an upward breakout of 1,555 can stretch the bullish trend until 1,561. Good luck!

Categories
Forex Market Analysis

Gold Sideways Session Continues Despite Weak NFP Report! 

Gold prices trimmed down on Friday, after sinking as much as 1% in the prior session, as rising tensions in the Middle East lead traders to shift to riskier assets. The safe-haven-metal prices still flashing red and continue to drop mainly due to risk-on sentiment in the market in the wake of de-escalated US-Iran conflict.

Gold prices trimmed down on Friday, after sinking as much as 1% in the prior session, as rising tensions in the Middle East lead traders to shift to riskier assets. The safe-haven-metal prices still flashing red and continue to drop mainly due to risk-on sentiment in the market in the wake of de-escalated US-Iran conflict.

Gold prices trimmed down on Friday, after sinking as much as 1% in the prior session, as rising tensions in the Middle East lead traders to shift to riskier assets. The safe-haven-metal prices still flashing red and continue to drop mainly due to risk-on sentiment in the market in the wake of de-escalated US-Iran conflict.

As we all well aware that the gold prices hit the high level of $1,611 on Wednesday since 7-year high after Iran shot ballistic missiles at two Iraqi airbases housing U.S. forces. But later, U.S. President Donald Trump gave the sluggish comments regarding impose new economic restrictions on Iran rather than taking any military action against the country. 

Most Asian markets continued to rise on Friday morning as well because trade talks between the U.S. and China continued to move forward according to the plan and will sign the deal on 15 January.

The statement came from China’s Vice Premier Liu He, head of the country’s negotiation team in China-U.S. trade talks, said that he is set to visit Washington next week to sign a trade deal with the U.S.

With this, the U.S. 10-year treasury yields take the bids around 1.865% while S&P 500 Futures marks 0.20% gains to cross 3,280 by the time of writing.


Daily Support and Resistance

  • S3 1481.92
  • S2 1525.03
  • S1 1540.84

Pivot Point 1568.13

  • R1 1583.95
  • R2 1611.24
  • R3 1654.34

Gold traded in line with the prior estimate as it dropped sharply on the breach of 1,552 marks to set a low around 1,538. At the moment, 1,552 is working as a critical trading level. Below this, gold can trade bearish unto 1,542. 

On the upper side, the bullish breakout of 1,552 can encourage buying, but for that, we need a strong reason, and the weaker and expected NFP can be this reason today. In any event, an upward breakout of 1,552 can lead to gold prices towards 1,561. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, January 10 – Top Trade Setups In Forex -NFP Figures in Highlights! 

The U.S. dollar strengthened for a third straight session on Thursday, ahead of the release of December nonfarm payrolls report due later today. The ICE Dollar Index gained 0.1% on the day to 97.42.

The U.S. dollar strengthened for a third straight session on Thursday, ahead of the release of December nonfarm payrolls report due later today. The ICE Dollar Index gained 0.1% on the day to 97.42.

The U.S. dollar strengthened for a third straight session on Thursday, ahead of the release of December nonfarm payrolls report due later today. The ICE Dollar Index gained 0.1% on the day to 97.42.

The euro was broadly flat at $1.1109. Official data showed that the eurozone’s jobless rate was steady at 7.5% in November as expected, while German industrial production grew 1.1% on the month (+0.8% estimated).

The British pound slipped 0.2% to $1.3069, posting a three-day decline. Bank of England Governor Mark Carney indicated that an interest rate cut may still be possible, saying, “there is a debate at the MPC (monetary policy committee) over the relative merits of near term stimulus to reinforce the expected recovery in U.K. growth and inflation.”

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair flat near the 1.11 and traders stay on the waiting mode ahead of the U.S. Nonfarm Payrolls report for December, which is scheduled to release at 13:30 GMT. As of writing, the EUR/USD currency pair is currently trading at 1.1109 and consolidates in the narrow range between the 1.1102 – 1.1111.

The currency pair charted a Doji candle Thursday because it marked two-way business and closed on a flat note. The Doji candle represents a lack of clear directional bias or indecision in the market place. 

Moving ahead, the pair may hit the bearish track if the U.S. Nonfarm Payrolls ignore expectations. Moreover, the United States economy expected to have added 164,000 new jobs in December, after increasing 226,000 positions during November. The unemployment rate is expected to remain stable at 305%, along with the participation rate is projected at 63.2%.

Meanwhile, Average Hourly Earnings are rising by 0.3% month-on-month and by 3.1% year-on-year, almost unchanged from the previous month.

According to the forecast, the positive report will likely support the dollar to gain across the board. In that case, EUR/USD will hit the bearish close below 1.1093. Although, in the case of a below-forecast NFP and wage growth figures, the shared currency may find bids, pushing the EUR/USD above 1.1120.

At the USD front, the greenback currency found on the bullish track because the markets await ahead of the NFP report. The U.S. Index is higher for the 3rd-consecutive day, trading back 97.50.

At the Sino-US front, the United States and China will possibly sign a phase one trade deal on January 15. However, any fresh is not coming yet regarding the Sino-US trade deal, but the trader keeps their eyes on January 15 for new impulse.

Looking forward, the Non-Farm Employment Change report is the trader radar, which is due to release at 13:30 GMT. Traders will also keep their focus on the Unemployment rate and Average Hourly Earnings, which are scheduled to release at the same time.



Daily Support and Resistance

  • S3 1.1014
  • S2 1.1067
  • S1 1.1086
  • Pivot Point 1.1121
  • R1 1.114
  • R2 1.1174
  • R3 1.1227

EUR/USD– Trading Tips

The EUR/USD is trading in a bearish mode below a crucial trading level of 1.1130, testing the support next level of 1.1100. This level worked as a support during the previous days, but this time it seems to get violated as the EUR/USD has formed a strong bearish candle. The MACD is trading below 0 levels, which is suggesting odds of the bearish trend continuation for the EUR/USD. 

On the 4 hour chart, the pair had formed a bullish channel that has now been violated at 1.1130 level, and now this can lead the EUR/USD prices towards 1.1077 level. 

GBP/USD– Daily Analysis

The GBP/USD closed at 1.30659 after placing a high of 1.31234 and a low of 1.30130. Overall the movement of GBP/USD remained bearish throughout the day.

The GBP/USD came under pressure after the Bank of England’s governor gave hints for an interest rate cut, and the pair GBP/USD dropped near 1.30 level.

On Thursday, the Governor of Bank of England, Mark Carney, dropped hints that interest rates could be cut soon to boost the British economy. He also warned that the BoE was running low on ways to fight the recession.

He said that the British economy had been sluggish recently, and the inflation was below the bank’s target of 2%. He added that if the weakness in the economy persisted the same, then the central bank could cut interest rates.

His comments put pressure on Britain Pound and sent it near 2-week lowest point against the U.S. dollar on Thursday. Mark Carney, in the previous monetary policy meeting of Bank of England, backed himself from cutting interest rates while 2 of nine policymakers were in favor of cutting rates to 0.5% from 0.75%.

He also said that there were tentative signs of stabilization in the global economy after a slowdown for almost 18 months, while the chances for Britain’s economy to drop still remain because of uncertainty after Boris Johnson’s election victory.

Regarding inflation, he said that the level of interest rates required to keep inflation steady would need to remain low for a prolonged period of time.

On the other hand, the U.S. dollar remained strong on Thursday amid positive job data from the U.S. labor department, which showed that jobless claims during the previous week decreased to 214K from expected 221K and supported U.S. dollar. The strong U.S. dollar added to the downward movement of GBP/USD.

Daily Support and Resistance

  • R3: 1.3296
  • R2: 1.3206
  • R1: 1.3151
  • Pivot Point 1.3116
  • S1: 1.3061
  • S2: 1.3026
  • S3: 1.2936

GBP/USD– Trading Tip

The GBP/USD continues to trade with bearish bias after violating the 1.3045 support level. On the 4 hour chart, the pair has closed a bearish engulfing candle under 1.3045 support level, which is a proof of bearish breakout. Below 1.3045, the GBP/USD has the potential to trade lower until 1.3000 level and even towards 1.2910 support zone. 

The leading indicators, such as RSI and MACD, are also supporting the bearish bias among traders. I will consider taking selling positions below 1.3058 to target 1.3000 today. 

 

USD/JPY – Daily Analysis

The USD/JPY closed at 109.514 after placing a high of 109.580 and a low of 109.010. Overall the movement of USD/JPY remained bullish throughout the day. The safe-haven Yen falls to 2-week lowest point against the U.S. dollar on Thursday amid the de-escalation of tensions between the U.S. & Iran after the targeted killing of Iranian general Qassem Soleimani by U.S. military.

On Wednesday, Iran, in retaliation against its general murder, dropped missiles on Iraqi airbases where U.S. troops were hosted. However, there were no American casualties that led to U.S. President Donald Trump to stop further military action against Iran. 

Instead, Trump announced economic & financial sanctions on Iran in response to Iranian airstrikes. Furthermore, the Iran officials also said that their missile attacks were to conclude the retaliation, and no more attacks will be made from them. Both parties backed from any escalation of military actions, and this gave pressure to safe-haven currencies like Yen.

Weaker Japanese Yen caused the USD/JPY to move in the reverse direction, and the pair moved to its 2-week highest level above 109.5.

On the other hand, the U.S. dollar remained strong across the board on the back of strong economic data and supportive comments from Federal Reserve officials.

At 1:00 GMT, the Consumer Credit from the U.S. Federal Reserve for November was released, which showed a decline to 12.5B from the expected 15.5B and weighed on the U.S. dollar. However, at 18:30 GMT, the Unemployment Claims from the U.S. Department of Labor dropped to 214K from forecasted 221K and supported the U.S. dollar.

   

Daily Support and Resistance

  • S3 106.93
  • S2 107.9
  • S1 108.49
  • Pivot Point 108.87
  • R1 109.46
  • R2 109.84
  • R3 110.81

USD/JPY – Trading Tips

The USD/JPY pair is trading bullish around 109.420 after breaking above a resistance level of 108.950. The way USD/JPY is forming bullish candles shows a strong buying bias among investors. We may see USD/JPY targeting the triple top resistance level around 109.700. 

Leading indicators are massively overbought, and USD/JPY is looking for a reason to trigger bearish retracement. 109.750 can offer this reason today. Let’s keep an eye on this level to capture a sell positon below this today. All the best! 

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Forex Market Analysis

EUR/JPY Completes 50% Fibo Retracement – 61.8% Mark In Eyes!

The EUR/JPY is trading with a bearish bias at 120.950 areas in the wake of the U.S. Iran trade war. Iran immediately called a parliament to decide whether US troops should remain in Iran soil or not. The parliament voted the US troop withdrawal from Iran, which was criticized by the US.

The EUR/JPY is trading with a bearish bias at 120.950 areas in the wake of the U.S. Iran trade war. Iran immediately called a parliament to decide whether US troops should remain in Iran soil or not. The parliament voted the US troop withdrawal from Iran, which was criticized by the US.

The EUR/JPY is trading with a bearish bias at 120.950 areas in the wake of the U.S. Iran trade war. Iran immediately called a parliament to decide whether US troops should remain in Iran soil or not. The parliament voted the US troop withdrawal from Iran, which was criticized by the US.

The US President Trump said that they had invested billions of dollars in building an airbase in Iran, and they would not leave until Iran pay them back. US army denied the troop withdrawal from Iran.
Iran then announced that it would no longer follow the 2015 nuclear contract with the world powers. According to that provision, Iran was bound to follow the uranium enrichment limits mentioned under the 2015 Nuclear Agreement.

In response to what, US President tweeted that Iran would never become a Nuclear Power. He then said that the US military would attack 52 Iranian Historical values if they make US troops to leave Iran. This has increased the geopolitical tensions throughout the globe and has increased the uncertainty as to which extent these countries could go further.

On the other hand, the FOMC meeting minutes for the December meeting were released on Sunday, which showed that US Fed policymakers were in favor of further easing. However, Federal Reserve has already announced that no further rate cuts would be made in 2020, and the interest rates will remain unchanged throughout the year.


EUR/JPY – Daily Technical Levels

Support Resistance
121.16 121.35
121.06 121.44
120.87 121.64
Pivot Point 121.25

The EUR/JPY pair has already completed 38.2% Fibonacci retracement around 120.950, and it’s now likely to head towards 61.8% Fibo levels. Immediate support is expected to be found around 120.800 level, while the MACD and RSI support the bearish bias. The idea is to trade bearish below 121.005 to complete 61.8% Fibonacci retracement around 120.650 today.

Good luck!

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Forex Market Analysis

Gold’s Ascending Triangle Intact – Investor Awaits Fundamentals! 

On Thursday, the precious metal gold prices inched up to trade around 1,476 after the U.S. House of Representatives chose to challenge President Donald Trump on articles of misuse of authority and obstruction of Congress.    

On Thursday, the precious metal gold prices inched up to trade around 1,476 after the U.S. House of Representatives chose to challenge President Donald Trump on articles of misuse of authority and obstruction of Congress.    

On Thursday, the precious metal gold prices inched up to trade around 1,476 after the U.S. House of Representatives chose to challenge President Donald Trump on articles of misuse of authority and obstruction of Congress.    

Impeachment is a two-way process where the removal of a sitting president is decided. In the first stage, the majority of the Democrats will be needed to support the move. If that passes, then a trial would be held in U.S. Senate, which will be dominated by Republicans. 

For that, 2-3rd would have to vote in favor, which is highly unlikely to happen. But if it did happen, Donald Trump would be forced from the White House.

The U.S. Dollar Index advanced to a fresh weekly high near 97.50, which also helped gold prices to gain a slightly bullish trend. Lack of any macroeconomic data left the movement of pair XAU/USD dependant on the technical changes and political news. 

On Friday, the Bureau of Economic Analysis will publish the Q3 Gross Domestic Product (GDP) along with the Personal Consumer Expenditures (PCE) Price Index. 

Gold – XAU/USD – Daily Technical Levels

Support   Resistance 

1,460.28   1,483.1

1,450.74   1,496.37

1,427.92   1,519.18

Pivot Point 1,473.55

Technically, the yellow metal gold has extended an ascending triangle pattern, which is holding the XAU/USD sustained above 1,470 level. A bearish violation of this level of 1,470 can drive additional selling until 1,462. However, no vital drift isn’t anticipated until the release of UoM Consumer Sentiment on Friday. On the upper side, 1,480 is likely to be the resistance for gold. Good luck! 

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Forex Price-Action Strategies

Daily-H4 Timeframe Combination – The Market Sometimes Makes You Wait More Than You Think

In today’s lesson, we are going to demonstrate an example of an entry derived from the daily-H4 combination. Usually, the daily-H4 combination does not take that long to offer an entry once the price makes a breakout on the daily chart. In today’s example, things are a bit different. Let us find out how it starts and ends.

In today’s lesson, we are going to demonstrate an example of an entry derived from the daily-H4 combination. Usually, the daily-H4 combination does not take that long to offer an entry once the price makes a breakout on the daily chart. In today’s example, things are a bit different. Let us find out how it starts and ends.

In today’s lesson, we are going to demonstrate an example of an entry derived from the daily-H4 combination. Usually, the daily-H4 combination does not take that long to offer an entry once the price makes a breakout on the daily chart. In today’s example, things are a bit different. Let us find out how it starts and ends.

The figure above shoes the daily chart. After a strong bullish impulse, the price action gets choppy for several days. Do you notice anything here?

The price gets caught within a rectangle. Since it has been choppy for quite a while, it makes some traders think not to keep the pair on their watch list.

There is a saying in price action trading “the more it ranges, the harder it breaks’. Thus, the next breakout may be a very strong one.

The breakout candle looks good. However, it is not that strong a breakout as we have expected. Nevertheless, it is a valid daily breakout, so traders are to flip over to the H4 chart to take a long entry.

The figure above shows the H4 chart. The price has been heading towards the North with an average bullish momentum. Traders are to wait for the price to find its support and make an upside breakout to offer them a long entry.

The price keeps being choppy on the H4 chart as well. It neither has consolidated nor produced a bullish reversal candle on which buyers could take a long entry. It has instead been within another bullish rectangle. This time it is, of course, an H4 bullish rectangle. Let us proceed to find out which way it makes its next breakout.

The price makes an upside breakout again. A bullish engulfing candle with long lower shadow makes the breakout. The buyers have been waiting for it, so a long entry may be triggered right after the candle closes. The Stop Loss shall be set below the rectangle support. There is no visible swing high. This suggests that the profit taking should be managed manually.

The plan has worked wonderfully well. The price goes straightway towards the North with extreme bullish momentum. The buyers may trail their Stop Loss in the middle of the big candle or at least above the breakeven point. As it has been going, it may keep pushing towards the North further. Let us find out what happens next.

The chart produces a bearish reversal candle. It is an Inside Bar, but it is time for the buyers to close the entry.

The price takes so long to make a breakout on the daily chart. It also takes a long time to offer entry on the H4 chart as well. This situation does not happen frequently, but sometimes it may occur. Thus, traders are to be mentally prepared for it.

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Forex Market Analysis

WTI Crude Oil Slipped Amid Rising Crude Inventories – Quick Trade Plan! 

The WTI crude oil prices are flashing red and traded lower after the American Petroleum Institute reported a large build of weekly crude inventories. The WTI crude oil inventories increased by 4.7 million barrels in its snapshot of stockpiles for the week ended December 13, the API said.

The WTI crude oil prices are flashing red and traded lower after the American Petroleum Institute reported a large build of weekly crude inventories. The WTI crude oil inventories increased by 4.7 million barrels in its snapshot of stockpiles for the week ended December 13, the API said.

The WTI crude oil prices are flashing red and traded lower after the American Petroleum Institute reported a large build of weekly crude inventories. The WTI crude oil inventories increased by 4.7 million barrels in its snapshot of stockpiles for the week ended December 13, the API said.

The U.S. government data is anticipated to point a drop of 1.3 million barrels while the Energy Information Administration(EIA) publishes its weekly figures.

In the previous week, the EIA announced the advance of a crude stock of 822K barrels versus a market forecast for a dip of 2.76 million barrels.

The WTI crude oil prices got some benefit earlier in the day after data showed U.S. November manufacturing output and housing figures both outperformed expectations.

It should be noted that the declines in crude oil prices have been limited due to Sino-US trade optimism. A phase-one trade deal was agreed between the United States and China last week, decreasing some fears over the economic impact of a continued dispute between the two biggest crude oil importers. 

Technically, the WTI is trading in a bullish channel, which is supporting it around 60.20, while the same bullish channel is likely to resistance around 62.22. 

On the way to upside, the WTI crude oil may find a horizontal resistance level around 61 while the RSI and MACD are suggesting bearish bias. Lately, the crude oil has formed a series of neutral candles which exhibits indecision among traders.

Daily Support and Resistance

  • S3 58.49
  • S2 59.48
  • S1 59.97

Pivot Point 60.47

  • R1 60.96
  • R2 61.46
  • R3 62.45

Consider taking buying trade above 60.20 to target 60.50, and above this, the WTI may soar to test 61.10. Good luck! 

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Forex Market Analysis

Daily FX. Analysis, December 16 – Top Trade Setups In Forex – Eurozone’s PMI Figure Drives! 

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

Regarding U.S. economic data, retail sales rose 0.2% on month in November (below the +0.5% expected, +0.4% in October). Import prices increased 0.2% on month (as expected, -0.5% in October).

Later today, the Empire Manufacturing Index for December (5.0 expected) and the Markit US Manufacturing Purchasing Managers’ Index (52.6 expected) will be reported.

Economic Events to Watch Today

Let’s took at these fundamentals.

AUD/USD – Daily Analysis

The AUD/USD currency pair seen unchanged and consolidates in the narrow trading range between the 0.6875 – 0.6878. The currency pair remains depressed despite the fresh optimism over the Sino-US trade deal. As of writing, the Aussie currency pair is currently trading at 0.6875.

The AUD/USD currency pair picked up a buying near 0.6775 following the consumer spending data, which represented a rise in retail sales by 8% year-on-year during November, crossing the forecasted growth of 7.6% by a big range.

Industrial production rose 6.2% compared to an expected rise of 5%, marking an improvement from October’s 4.7%. Moreover, the People’s Bank of China has injected 300 billion Yuan into the system via a one-year medium-term lending facility. 

The AUD/USD currency pair did not succeed to gain on its early positive move and saw a dramatic intraday turnaround on Friday. Moreover, the uncertainty regarding the US President Donald Trump’s decision to cancel the December 15 tariff-hike on Chinese imports weighed heavily on the China-proxy Australian dollar, causing a drop in AUD/USD pair around 75 pips from an intraday high level of 0.6938 the highest since July 26.

The bullish sentiment remains weak, possibly due to the reports that Beijing is planning to lower its 2020 gross domestic product target to 6% from the current year’s 6.5%. 

Looking forward, the worries of a deeper recession in China in 2020 will likely continue to overshadow the phase one US-China trade deal and send the AUD lower.

Daily Support and Resistance  

  • S3 0.6759
  • S2 0.6824
  • S1 0.685

Pivot Point 0.6889

  • R1 0.6915
  • R2 0.6954
  • R3 0.7019

AUD/USD– Trading Tips

The AUD/USD pair is hanging around 0.6900, trading mostly bullish despite staying in the overbought zone. The traded higher further above the 0.6865 mark, the 61.8% Fibo retracement level of its November slide. In the 4-hour chart, the 20 SMA has hastened north over the bigger ones, all of them under the current mark. In contrast, the technical indicators lead to the north in overbought territory, without indications of bullish exhaustion. The rally is set to remain on a break over 0.6930, the next resistance.

GBP/USD– Daily Analysis

The GBP/USD currency pair still found on the bullish track and remain supportive mainly due to the United Kingdom Prime Minister Boris Johnson win who promised to leave the European Union (EU) swiftly before January 31, 2020. 

The GBP/USD currency pair traded bullish at 1.3388 and representing sizeable gains of +0.50%, having hit the high of 1.3398. By the way, the pair consolidates in the range between 1.3337 – 1.3398.

Prime Minister Johnson will welcome 109 new Conservative lawmakers to parliament and will repeat his promise to increase funding to the state health service on the day.

Moreover, the GBP/USD currency pair is also supported by the increased expectations of an improvement in the UK’s manufacturing sector activity, as the Markit Preliminary Manufacturing PMI for December is seen arriving at 49.4 against. 48.9 previous. The country’s Services PMI is expected to reach at 49.6 against. 49.3 last.

At the greenback front, markets still unexcited despite the details of the US-China Phase One trade deal. The US dollar index now tests the 97 handles, retreating from Friday’s highs of 97.24.

The GBP currency buyers will keep up the buying because the UK looks to clear the Brexit departure Agreement in the parliament before Christmas. In contrast, the Bank of England (BOE) may signal a willingness to change course on the monetary policy, with the United Kingdom election out of the way.             

Daily Support and Resistance

  • S3 1.3025
  • S2 1.32
  • S1 1.3267

Pivot Point 1.3374

  • R1 1.3441
  • R2 1.3548
  • R3 1.3722

GBP/USD– Trading Tip

The GBP/USD is presently consolidating around at1.3457, placing around 19-month high to 1.3515 during the US session yesterday. The UK election exit polls foretelling a big win for the incumbent Prime Minister Boris Johnson. 

The GBP/USD pair’s 14-day relative strength index (RSI) is now floating around 80.47. I must say it’s the highest mark since January 2018. An above 70-reading shows overbought situations. Consider capturing retracement below 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the bullish track and representing some moderate gains mainly due to fresh trade optimism between the United States and China. As of writing, the currency pair is currently trading at 109.38 and consolidates in the range of 109.31 – 109.44.

Notably, the currency pair had some good 2-way price moves on Friday and was impressed by the full market risk-on sentiment, which turned out to be one of the major reasons that affected the Japanese yen’s as a perceived safe-haven status. 

However, the USD/JPY pair quickly reversed an early decline to sub-109.00 levels and recovered to multi-month highs in the wake of optimism of UK Parliamentary elections.

However, the bullish momentum failed near the 109.70 regions after the disappointing release of the United States’ monthly retail sales data, which kept the greenback buyers on the defensive.]The uncertainty regarding the United States President Donald Trump’s decision to cancel the December 15 tariff-hike on Chinese imports further helped to the pair’s intraday pullback of around 35-40 pips.

It should be noted that the USD/JPY currency pair finally closed unchanged for the day but succeeded in recovering some positive traction. That might have been due to the United States Trade Representative Robert Lighthizer’s comments on Sunday, saying that the phase-one Sino-US trade deal is done. Under the agreement, China said it would increase agricultural purchases due to the US’ decision not to attempt a new round of tariffs.

Daily Support and Resistance

  • S3 108.42
  • S2 108.92
  • S1 109.13

Pivot Point 109.42

  • R1 109.63
  • R2 109.92
  • R3 110.42

USD/JPY – Trading Tips

The USD/JPY rose 0.8% to 109.40 as investors’ risk appetite grew. The pair is heading towards the double top resistance level of around 109.700. Below this, the USD/JPY is likely to show a bearish correction of up to 38.2% level, which stays at 109.200. 

On the higher side, the bullish breakout of USD/JPY can lead the Japanese pair towards 110.300. The MACD and RSI are in support of the bullish trend. 

All the best!

Categories
Forex Market Analysis

Gold Develops Ascending Triangle Pattern – U.S. Retail Sales in Play! 

On Friday, the precious metal is trading a bit calm after exhibiting dramatic movement, placing a high of around 1,484 to a low of 1,462. Despite weaker than expected macroeconomic data from the United States, the U.S. dollar remained a bit strong on Thursday as the trade optimism increased.  

On Friday, the precious metal is trading a bit calm after exhibiting dramatic movement, placing a high of around 1,484 to a low of 1,462. Despite weaker than expected macroeconomic data from the United States, the U.S. dollar remained a bit strong on Thursday as the trade optimism increased.  

On Friday, the precious metal is trading a bit calm after exhibiting dramatic movement, placing a high of around 1,484 to a low of 1,462. Despite weaker than expected macroeconomic data from the United States, the U.S. dollar remained a bit strong on Thursday as the trade optimism increased.  

The U.S. President Donald Trump tweeted on Thursday that “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”. Which raised the hopes for completion of the phase-one trade deal sooner, and riskier assets gained traction.

Besides, another positive gesture by the United States was an offer made to China as part of a phase one deal. The U.S. negotiators offered to cut the existing tariffs and not to impose the latest round of tariffs in exchange for U.S. agricultural purchases from China and better intellectual property rights.

They offered to decrease existing tariffs by half in return for large U.S. agricultural purchases from China. So far, China has not responded but has argued that binding in a written agreement for investments would be against WTO rules and would also harm Chinese companies.

Gold – XAU/USD – Daily Technical Levels

Support     Resistance 

1,460.28     1,483.1

1,450.74     1,496.37

1,427.92     1,519.18

Pivot Point 1,473.55

Technically, gold has formed an ascending triangle pattern, which is keeping the XAU/USD supported over 1,462 level. A bearish breakout of this can trigger further selling until 1,455, but that significant movement isn’t expected on the U.S. retail sales until and unless we see a dramatic deviation in figures. 

On the higher side, 1,480 is likely to be the next resistance area for gold. So we can play within this limited range, selling at the top and buying at the bottom. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, December 12 – Top Trade Setups In Forex – U.K. Voting and ECB in Play! 

 

 

The U.S. dollar declined versus other major currencies as the Fed signaled that interest rates could be stable at current levels through 2020. The ICE U.S. Dollar Index sank to 97.08, the lowest level since August.

The euro rose 0.4% to $1.1133. The European Central Bank is expected to keep its monetary policy unchanged later today.

As expected, the Federal Reserve maintained the rates after cutting them at three earlier meetings. Fed Chairman Jerome Powell stated that monetary policy is well-positioned for the expanding economy, where the jobs market is expected to remain strong and inflation moderate.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair slightly recovered in the last hour in the wake of inflation data released from the United States, which made the EUR/USD pair weaker. As of writing, the EUR/USD currency pair is currently trading 1.1094 but virtually unchanged daily near the 1.1090 handles. 

The data published by the United States (U.S.) Bureau of Labor Statistics (BLS) on Wednesday showed that the core Consumer Price Index (CPI) in the United States stayed unchanged at 2.3% every year during November. Although these figures came in line with the market expectation, the initial reaction caused the U.S. Dollar Index to drop to a fresh session low below the 97.50 marks.

Despite this, the EUR/USD currency pair may not pick up bid further in the coming hours because traders are unlikely to take large bets before the Federal Reserve Open Market Committee monetary policy announcements. However, investors don’t see the Federal Reserve cutting rate again; the updated economic projections will provide fresh hints regarding the rating outlook in 2020. 

After the FOMC event, investors’ eyes will shift to the European Central Bank’s (ECB) meeting and President Lagarde’s first press conference on Thursday.

According to the ECB event, we will not see the steady bullish progress in the EUR currency because policy continuity should be the main takeaway. Lagarde’s style and sound is a wild card. Preventing an early misstep there, the slight declines we see to growth may be offset upgrades to next year’s inflation forecast.

At the Fed front, the Federal Reserve is expected to keep the Fed Funds rate stable at the 1.50 – 1.75% range. After cutting interest rates 3-times in a series, for now, market participants see no change today and also at the January meeting. Most members of the Federal Open Market Committee (FOMC) mentioned they think the current stance of policy appropriate. 

Looking forward, the Federal Reserve will announce its decision regarding monetary policy today at 19:00 GMT. Chairman Jerome Powell will read a statement and will hold a press conference at 19:30 GMT. 

Daily Support and Resistance

  • S3 1.102
  • S2 1.1043
  • S1 1.1054

Pivot Point 1.1066

  • R1 1.1076
  • R2 1.1089
  • R3 1.1111

EUR/USD– Trading Tips

The EUR/USD has crossed over its 5-month downtrend at 1.1113. The EUR/USD is trending higher but has not gained any support until now. The EUR/USD has next support near 61.8% Fibonacci support level of 1.1105.  

While the resistance stays around 1.1190, and the 1.1225 horizontal resistance mark strictly follows it. Considering the recent crossover on MACD, the pair may trade bearish below the 1.1100 level today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair dropped but recovered a significant part of its early declines to weekly lows manly in the reaction to the latest election polls results. As of now, the GBP/USD currency pair is currently trading near the 1.3179 and consolidates in the narrow range between 1.3108 – 1.3188 after the Fed holding rates steady yet signaling that there will not be a change in rates in 2020, something quite to the contrary of Fed watchers.

The pair continued the previous session’s late pullback from over eight-month highs and saw some follow-through long-unwinding trade on Wednesday in the wake of the latest U.K. election poll, which tilted towards a hung parliament.

A closely watched YouGov’s poll based on the MRP model showed a narrowing lead for Prime Minister Boris Johnson’s Conservative Party, now expected to win a majority of 28 seats in the parliament, falling sharply from 68 last month.

The slight pick up in the greenback demand, despite the uncertainty of President Trump regarding the phase-one trade deal between the United States and China, further collaborated to the pair’s intraday slide to the 1.3100 neighborhood.

No:1 Key takeaways from FOMC statement and projections

No:2 The market has priced in virtually no chance of rate move through February.

No:3 IOER 1.55% vs 1.55% prior.

No:4 Fed drops language about ‘uncertainties about this outlook remain.’

No:5 The vote was unanimous.

No:6 The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.”

No:7 No changes in the economic outlook paragraph*

No:8 Says, “the current stance of monetary policy is appropriate.”

No:9 Leaves forecasts for GDP and inflation unchanged lowers 

unemployment.

No:10 The median forecast is for one rate hike in 2021 and one in 2022.

Looking forward, we are now counting down to the U.K. election vote for Thursday, where results are expected to come in from around 0200 GMT onwards. Pound Sterling has been improving because of yesterday’s YouGov outcome that proved the Conservative’s lead was narrowing. 


Daily Support and Resistance

  • S3 1.3056
  • S2 1.3104
  • S1 1.3124

Pivot Point 1.3153

  • R1 1.3173
  • R2 1.3202
  • R3 1.325

GBP/USD– Trading Tip

The GBPUSD is displaying a solid bullish bias as traders seem confident about the victory of the Conservative party and assume Boris Johanson to win the election. The GBP/USD may persist massively volatile today, and a day after, as the election result will start reaching out by tomorrow morning. On the higher side, the GBP/USD is expected to find resistance around 1.3265 and 1.3336. While the support can be seen near 1.3185 and 1.3110.

The RSI and MACD are in the bullish zone, signaling chances of a bearish correction, but then the Sterling will be found to do more upward movement. 

USD/JPY – Daily Analysis

The USD/JPY currency pair initially hit the bullish track and rose to 108.76 and the reversed falling to 108.57, the new daily bearish level after the decision of the Federal Reserve to keep the rate unchanged. As of writing, the USD/JPY currency pair is currently trading at 108.60, slightly lower as compared to previous before the statement.

The greenback dropped across the bard and hit the fresh bearish levels. The U.S. Dollar Index dropped under 97.30, the lowest level since November 4. The United States’ yields moved to the downside, and equity prices in Wall Street rose but remain under the highs. 

At the Sino-US front, the clock is ticking because we close in on the deadline on the so-called ‘phase- one’ deal and/or tariff delay by December 15. We are awaiting an announcement from U.S. President Donald Trump to come before the weekend’s deadline. Moreover, the news yesterday that tariffs would be delayed caused a short period of risk-on in the markets. Still, the news was unconfirmed, and Trump’s closest advisers tell the decision is finally depend on the president.

Daily Support and Resistance    

  • S3 108.06
  • S2 108.31
  • S1 108.43

Pivot Point 108.56

  • R1 108.68
  • R2 108.8
  • R3 109.05

USD/JPY – Trading Tips

On Thursday, the dovish FOMC and weaker U.S. dollar have driven sharp selling in the USD/JPY currency pair this week. For now, the pair is trading above 108.550, which is working as a double bottom support level.

A bearish breakout of this level can trigger selling until 108.250. The USD/JPY has already completed 81% retracement on three hourly charts, and this level can give some support to USD/JPY. Above this, the pair may find resistance around 108.900. Let’s wait for NFP to determine the further trend of USD/JPY. 

All the best!

Categories
Forex Market Analysis

Steady Movement In Gold – Eyes on FOMC & Fed Rate Decision Today 

On Wednesday, the price of the precious metal gold moved in a tight range as cautious traders back out from big bets before of U.S. Federal Reserve’s monetary policy statement following in the day and amid an imminent tariff deadline.

On Wednesday, the price of the precious metal gold moved in a tight range as cautious traders back out from big bets before of U.S. Federal Reserve’s monetary policy statement following in the day and amid an imminent tariff deadline.

On Wednesday, the price of the precious metal gold moved in a tight range as cautious traders back out from big bets before of U.S. Federal Reserve’s monetary policy statement following in the day and amid an imminent tariff deadline.

The Small Business Index from the U.S. National Federation of Independent Business (NIFB) was released. The report showed an increased figure in the month of November to 104.7 from the expected 103.1, which supported the greenback.

At 18:30 GMT, the Revised Non-Farm Productivity for the third quarter was released and came in as -0.2% against the expectations of -0.1%. The Revised Unit Labour Costs for the third quarter from the United States dropped to 2.5% from the expectations of 3.4%.

According to the analysis of Chinese & U.S. data, China has bought more U.S. soybeans between September and November this year, giving an excellent gesture to try to reach an initial agreement on trade. The Chinese imports of U.S. soybeans increased 13 times from the previous year’s same period.

However, Chinese officials are hopeful that the U.S. will delay a threatened tariff increase due on Sunday as both countries are focused on the de-escalation of trade tensions. Traders are keeping an eye on a specific move from China or the U.S. in the development of trade deal to react accordingly.

Investors are also waiting for the forecast of U.S. economic growth from policymakers who are attending a two-day meeting of Federal Reserve, which will end on Wednesday. Federal Reserve is expected to hold its interest rates unchanged in this meeting. On Wednesday, the Consumer Price Index from the United States will be released, which is expected to drop to 0.2% from the previous month’s 0.4%.

Gold – XAU/USD – Trade Plan

This week, the precious metal gold hasn’t exhibited major movements as most of the market awaited the U.S. CPI and FOMC figures. Gold is stuck in a tight trading range of 1,467 – 1,459.  

On the 4-hour timeframe, gold is forming neutral candles within the same range of 1,467 – 1,459, which is signaling a lull before the storm. Gold is also gaining support around 1,459, and it’s extended by a bullish trendline while the RSI and MACD stay around 50 and 0, respectively. 

Gold – XAU/USD – Daily Technical Levels

Support    Resistance 

1,459.88      1,469.07

1,455.37      1,473.74

1,446.19      1,482.92

Pivot Point 1464.56

A bearish breakout of 1,458 can lead to gold prices towards 1,452 level. Alternatively, the bullish breakout of 1,467 can lead it towards 1,471 and even higher. Looks like, traders are going to keep trading choppy session until the CPI and FOMC is released tomorrow. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Dec 10 – JP Morgan launching its blockchain network in 2020

The crypto market has its first red day after a green weekend. Most cryptocurrencies ended up in the red. If we look at the past 24 hours, Bitcoin’s price decreased by 1.76%. It is now trading for $7,353. Meanwhile, Ethereum lost 0.43%, while XRP fell 2%.

The crypto market has its first red day after a green weekend. Most cryptocurrencies ended up in the red. If we look at the past 24 hours, Bitcoin’s price decreased by 1.76%. It is now trading for $7,353. Meanwhile, Ethereum lost 0.43%, while XRP fell 2%.

The crypto market has its first red day after a green weekend. Most cryptocurrencies ended up in the red. If we look at the past 24 hours, Bitcoin’s price decreased by 1.76%. It is now trading for $7,353. Meanwhile, Ethereum lost 0.43%, while XRP fell 2%.

The biggest top100 crypto gainer for today is Chainlink, with gains of 10.85%. On the other hand, the cryptocurrency that lost the most today was Matic Network, which lost 50.4% of its value.

Bitcoin’s dominance stayed at the almost exact place when compared to where it was yesterday. Its dominance is currently 66.56%, which represents an increase of 0.03% from yesterday’s value.

The cryptocurrency market’s market capitalization dropped in the past 24 hours. The market cap is currently at roughly $199.46 billion. This value represents an increase of $4.7 billion against the value it had on yesterday.

What happened in the past 24 hours

JPMorgan announced the launch of its blockchain-based payment network for the Japanese market in early 2020. The payment network is based on JPMorgan’s in-house blockchain platform, Quorum. The Interbank Information Network (IIN) wants to improve payment transactions as well as data sharing between banks.

Bloomberg’s report says that over 80 Japanese banks have a serious intent to join the platform. Out of the 365 total members that announced to join the platform, over 20% are Japanese banks.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

After a great weekend, Bitcoin came back to almost the exact same spot it was in before it. The biggest cryptocurrency managed to lost its gains and fall under the $7,415 resistance, which is now turned support. The price is now consolidating between the $7,415 resistance and $7,314 Fib retracement line which is now acting as support. The immediate support line got tested twice, but held up both times.


Bitcoin’s volume spiked during the price drop but is now normalizing at lower levels. Its RSI levels fell down from being close-to overbought and normalized as well.

Key levels to the upside                    Key levels to the downside

1: $7,415                                           1: $7,314

2: $7,565                                           2: $7,240

3: $7,828                                           3: $7,120

Ethereum

Ethereum followed Bitcoin once again, which became almost a daily occurrence whenever big moves happen. Ethereum bulls stepped in and brought the price above the resistance of $150.5 over the weekend. After that happened, Ethereum immediately had a small level retesting, but the real test was ahead (as we reported yesterday). As the bears gathered and pulled the price down, the $150.5 resistance did not hold up, and Ethereum went under it.


Ethereum’s volume is currently really low relative to the previous days. Its RSI is in the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $150.5                                             1: $144.1

2: $155.8                                            2: $133.5

3: $161.1                                            3: $128.9

Ripple

It’s underwhelming to say that XRP broke its uptrend. After a whole week of a steady increase in price, it dropped significantly and lost around 40% of its gains from the whole uptrend move. After a sudden burst towards the upside on Dec 8, the price reached $0.234 but quickly started falling due to bulls not having enough buying pressure. The downward-facing move continued, and XRP’s price dropped from $0.234 all the way down to $0.222. However, this key level held up, and the price stabilized, at least for the time being.


There was no volume increase when this price-drop happened, which is quite interesting. XRP’s RSI value also returned to the bottom half of the range.

Key levels to the upside                    Key levels to the downside

1: $0.2267                                          1: $0.222

2: $0.234                                            2: $0.2182

3: $0.2351                                          3: $0.2145

Categories
Forex Market Analysis

Gold Bounces Off Amid Safe Haven Appeal – What’s Next?

During the Asian and European sessions, the precious metal gold surged as traders hedged against a possible intensification in the U.S.-China trade conflict before a Dec. 15 deadline for fresh U.S. tariffs.

During the Asian and European sessions, the precious metal gold surged as traders hedged against a possible intensification in the U.S.-China trade conflict before a Dec. 15 deadline for fresh U.S. tariffs.

During the Asian and European sessions, the precious metal gold surged as traders hedged against a possible intensification in the U.S.-China trade conflict before a Dec. 15 deadline for fresh U.S. tariffs.

Overall, the precious metal remains under pressure in the wake of a stronger U.S. dollar. The Average Hourly Earnings from the United States Bureau of Labour Statistics was published, which showed a decline in November to 0.2% from the expectations of 0.3% and weighed on the U.S. dollar.

The Non-Farm Employment Change for November showed growth to 266K from expected 181K and supported the U.S. dollar. The Unemployment Rate of the United States also declined in November to 3.5% from previous & expected 3.6% and added in support of the U.S. dollar.

Besides, the Preliminary Consumer Sentiment from the University of Michigan also came in favor of the U.S. dollar as 99.2 against the expectations of 97.0. The Final Wholesale Inventories for October were also in favor of the U.S. dollar when released as 0.1% against the expectation of 0.2%. The Preliminary Inflation Expectations from the University of Michigan showed a drop this month to 2.4% from the previous 2.5%.


Gold – XAU/USD – Daily Technical Levels

Support      Resistance 

1,452.48      1,474.11

1,444.81      1,488.08

1,423.18      1,509.71

Pivot Point 1,466.44

Gold is likely to trade bullish above 1,459, which is working as a horizontal support level. The closing of Doji and Inside up bar patterns are suggesting chances of a bullish reversal in gold. 

It looks like gold is trying to capture a bullish retracement, and it has completed 23.6% Fibo corrections at 1,464. This level is now extending substantial resistance to gold. 

The bearish breakout of 1,459 can lead to gold prices towards 1,450. While bullish trend continuation can lead to gold prices to 1,471, I will be staying bearish below 1,466 today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, December 06 – Top Trade Setups In Forex – Brace for Nonfarm Payroll! 

The British pound extended its gains on expectations that Brexit uncertainty could be cleared when the ruling Conservative Party wins a majority in the December 12 general election. GBP/USD charged 0.4% higher to 1.3157, a fresh 7-month high. EUR/GBP declined 0.2% to 0.8438, which was last seen in May 2017.

The British pound extended its gains on expectations that Brexit uncertainty could be cleared when the ruling Conservative Party wins a majority in the December 12 general election. GBP/USD charged 0.4% higher to 1.3157, a fresh 7-month high. EUR/GBP declined 0.2% to 0.8438, which was last seen in May 2017.

The British pound extended its gains on expectations that Brexit uncertainty could be cleared when the ruling Conservative Party wins a majority in the December 12 general election. GBP/USD charged 0.4% higher to 1.3157, a fresh 7-month high. EUR/GBP declined 0.2% to 0.8438, which was last seen in May 2017.

The U.K. Society of Motor Manufacturers and Traders reported that new car registrations declined 1.3% on year in Nov. (-6.7% in Oct.).

The euro rose 0.2% to $1.1104. The eurozone’s third-quarter GDP growth (final reading) posted at 0.2% on quarter (as expected) and 1.2% on year (as expected). Also, the eurozone’s retail sales declined 0.6% on month in Oct. (-0.5% expected) but rose 1.4% on year (+2.2% expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

  

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing green and found above the November 21 high of 1.1107 despite the depressed German Factory Orders data. As of writing, the currency pair consolidates in the range of 1.1102 – 1.1110. The 14-day relative strength index is also representing bullish sentiment with an above-50 print.

The EUR/USD currency pair will be unlikely to take the significant declines even if the industrial production figures release below expectations. On the other hand, the positive data from the United States (NFP) may stop supporting the bullish technical setup. Changes in industrial production are widely followed as a primary indicator of strength in the manufacturing industry.

Looking forward, the Eurozone’s manufacturing hub Germany release Industrial Production figures for October at 07:00 GMT. The data was expected to show the factory activity increased at a seasonally adjusted rate of 0.1% month-on-month in October, but the actual data fell to -1.7%. Evidently, the EUR/USD is trading under pressure since it’s release. 


Daily Support and Resistance

  • S3 1.104
  • S2 1.1068
  • S1 1.1086

Pivot Point 1.1097

  • R1 1.1115
  • R2 1.1126
  • R3 1.1155

EUR/USD– Trading Tips

On Friday, the traders are waiting for the U.S. Non-farm Payroll and Employment change figures to drive the next movement in the market. 

The EUR/USD has next support is near mid-1.1050 and is strictly followed by the 1.1075 horizontal support mark. Considering the recent crossover on MACD, the pair may trade bullish above the 1.1070 level today. On the upper side, resistance stays around 1.1140 and 1.1170. 

GBP/USD– Daily Analysis

The GBP/USD currency pair hit the seven-month high and found near the 1.3160 ahead of the United States nonfarm payroll. As of writing, the currency pair consolidates in the range of 1.3153-1.3163. 

The recent polls of the United Kingdom December election maintain the ruling Conservative Party on the top place, Prime Minister Boris Johson seems to be stuck recently as the Tory leaders again reject to take part in ITV and BBC debates.

On the other hand, optimism surrounding the trade deal by the UK Chancellor Sajid Javid and ex-Brexit Party members’ who seem to push to vote Tories seem to play their roles. Moreover, the pairs’ bullish sentiment could also be attributed to the greenback weakness. 

Markets seem inactive and cautious because all eyes stay on the Novembers’ employment data from the United States. As a result, the United States’ ten-year treasury yields, and most of the Asian stocks stay modestly changed. 

Ahead of the U.S. jobs report, U.K. Halifax House Prices will likely entertain the traders. Notably, we expect payrolls to increase by a solid 200k in November, which is higher than the previous month’s 128k release. If this happens, the GBP/USD may face headwind to target the next resistance level of 

Daily Support and Resistance

  • S3 1.3021
  • S2 1.3082
  • S1 1.312

Pivot Point 1.3143

  • R1 1.3181
  • R2 1.3204
  • R3 1.3265

GBP/USD– Trading Tip

On the technical side, the prices need to cross May month high near 1.3180 to target 1.3200 and 1.3270 figures to the north, declining to do so highlights Wednesday’s top surrounding 1.3120 as immediate support.

In the daily timeframe, the GBP/USD has an upward crossover on MACD. Lastly, the three white candles on the daily timeframe are suggesting bullish bias among traders. 

USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and dropped from the 108.97 to 108.66 overnight, mainly due to the positive headlines which came from the United States and China trade. This helped the United States stocks to survive further gains. 

As of writing, the currency pair is trading near the 108.70 and consolidates in the range of 108.66-108.78. Recently the risk appetite was healthy, and investors were trading based upon the set of positive news during this week from the United States. Although, without any positive response from China, markets were afraid to take any action ahead.

Before the headlines, there were upbeat tones from the United States President Donald Trump, who said that the United States is having meetings and trade talks with China. Something may happen regarding the December 15 tariff, but we are not discussing currently.

As for U.S. yields, the two-year Treasury yields increased slightly from 1.56% to 1.60%, ten-year yields rose from 1.76 to 1.82%. “Markets are pricing a near to zero chance of rate cut at the Fed’s December 11 meeting but a terminal rate of 1.25%.

Looking forward, the trader will keep their eyes on the coming Nonfarm Payrolls. Nov Nonfarm Payrolls are expected to rise 185k and report that the unemployment rate is likely to stay at 3.6%. Average hourly earnings are expected to hold at 3.0%, still down from the 3.2% beforehand.


Daily Support and Resistance

  • S3 108.12
  • S2 108.46
  • S1 108.61

Pivot Point 108.81

  • R1 108.95
  • R2 109.15
  • R3 109.49

USD/JPY – Trading Tips

The boosted demand for haven assets and weaker U.S. dollar has driven sharp selling in the USD/JPY currency pair this week. For now, the pair is trading above 108.550, which is working as a double bottom support level.

A bearish breakout of this level can trigger selling until 108.250. The USD/JPY has already completed 81% retracement on three hourly charts, and this level can give some support to USD/JPY. Above this, the pair may find resistance around 108.900. Let’s wait for NFP to determine the further trend of USD/JPY. 

All the best!

Categories
Forex Basic Strategies

No Breakout Confirmation or No Consolidation Means No Entry

Price Action traders crave for the breakout. Breakout is one of the most important components of price action trading. However, there is another equally important thing, which is breakout confirmation. Since the Forex market is very action-packed, it is often found that the price does not come up to the breakout level to confirm the breakout. It consolidates and produces a reversal candle to offer entry. The question is, does it always consolidate and offer an entry.

Price Action traders crave for the breakout. Breakout is one of the most important components of price action trading. However, there is another equally important thing, which is breakout confirmation. Since the Forex market is very action-packed, it is often found that the price does not come up to the breakout level to confirm the breakout. It consolidates and produces a reversal candle to offer entry. The question is, does it always consolidate and offer an entry.

Price Action traders crave for the breakout. Breakout is one of the most important components of price action trading. However, there is another equally important thing, which is breakout confirmation. Since the Forex market is very action-packed, it is often found that the price does not come up to the breakout level to confirm the breakout. It consolidates and produces a reversal candle to offer entry. The question is, does it always consolidate and offer an entry.

Let us find out.

The price headed towards the South and seems to have found its support. It has been heading towards the North now. The price is at the last swing high. Thus, the buyers are to wait for an upside breakout and breakout confirmation to take a long entry.

The price makes a breakout, but at the time of confirmation, it comes back in. Thus, the breakout is void. It goes towards the upside again. This time it gets rejected from the last swing high. Thus, the price does not make any breakout here.

This time it does. A huge bullish engulfing candle breaches the last swing high. That is a Double Top resistance as well. The buyers are to wait for the price to come back at the breakout level and get a bullish reversal candle right there. Alternatively, it may consolidate somewhere in between the highest high and the breakout level.

It keeps going up. Let us not give up but keep eyeing on the pair. It has gone too far up. It may not come back at the breakout level. It may rather consolidate. Let us find out what it does.

It keeps going towards the North. There is no sign of consolidation yet. A swing high on the chart is evident, which is nearby. As things stand, risk-reward is getting less lucrative.

As expected, the price has found its resistance before the level of the last swing high. The price action gets choppy. Traders are to wait for the price to give them the next direction. In a word, price action traders do not keep this kind of chart on their watch list.

The Bottom Line

A chart looked extremely good and was about to give us an entry ended up being a choppy chart. What more frustrating is it went towards the desired direction, but it did not offer us entry. Some traders may think it would be good if an entry is taken. At least some pips can be achieved. Please note, do not even think about it. After breakout, the price must confirm the breakout or consolidate. To sum up the whole equation, no confirmation or no consolidation means no entry.

Categories
Forex Daily Topic Forex Elliott Wave

Analysis and Trading with Triangles

In our previous article, we discussed how we could simplify the zigzag and flat pattern by the chartist figure known as a flag. In this educational article, we will see how triangles can be used in wave analysis.

In our previous article, we discussed how we could simplify the zigzag and flat pattern by the chartist figure known as a flag. In this educational article, we will see how triangles can be used in wave analysis.

In our previous article, we discussed how we could simplify the zigzag and flat pattern by the chartist figure known as a flag. In this educational article, we will see how triangles can be used in wave analysis.

The Background

Within the Elliott wave theory, triangles represent one of the three basic corrective formations. Similarly, in traditional technical analysis, triangles represent consolidation and continuation formations of the trend.

Elliott defined triangles as a formation that have an internal structure subdivided into five waves following a 3-3-3-3-3 sequence. At its time, Elliott identified two triangle variations, which are classified as expansive or contractive.

In general terms, triangles represent the market indecision or the balance between the buying and selling forces.

The following chart shows the model of the triangles in their contractive and expansive variants, under the Elliott Waves theory and Traditional Technical Analysis perspective.

According to the point of view of the traditional technical analysis, we can observe that the triangle pattern is not forced to have five internal segments, as in Elliott’s wave theory. In consequence, a truncated zigzag or truncated flat structure could be simplified by a triangle pattern.

The Trading Setup

The trade configuration of a contracting triangle pattern has the following characteristics:

  • Entry Level: A buying (or selling) position will be activated if the price exceeds and closes above the swing of the previous top.
  • Profit Target: The first profit target level will take place at 78.6% of the Fibonacci expansion, while the second will be at 100%, and finally, the third profit target level will be at 127.2%.
  • Protective Stop: The invalidation level of the trade setup will be located below the lowest swing of the triangle pattern.

The trade configuration of an expansive triangle pattern has the following properties:

  • Entry Level: The trade will be activated if the price exceeds the height of the expanding triangle.
  • Profit Target: The first profit target level will be at 100% of the Fibonacci expansion. The second profit target level will be at 127.2%.
  • Protective Stop: The level of invalidation will be located below the lowest low of the expansive triangle pattern.

Examples

The following chart corresponds to the AUDUSD pair in its 12-hour timeframe. We can observe that the price action developed an expanding triangle formation, which began from mid-May 2019 and culminated in mid-July 2019.

From the chart, we detect that the expanding triangle reached its highest level at 0.70821, which corresponded to a false breakout. Subsequently, the price action resolved the next movement with a drop that took it to plunge until 0.66771.

The sell-side entry was activated once the price closed below the lowest level of the expanding triangle at 0.68317. Once activated the sales position, the price reached the first target at 0.67080.

Another possibility of entry that could be considered would be the closing below the last relevant swing, that is, the closing below 0.69105. This option could provide the trader with a higher profit compared to the risk taken compared to the original entry setup.

The next example corresponds to Silver in its daily chart. From the figure, we observe that the price made a record high early July 2016, reaching $21,225 per ounce, after this, the price action performed a corrective movement, once its found support, Silver built a tight contractive triangle.

After breaking below $18,715, Silver activated a bearish scenario that drove the price to fall to the third bearish target at $15.66 per ounce.

After having fulfilled the third bearish target, the price fell and reached $18.435 on April 17, 2017, where Silver began to build a contractive triangular structure that lasted until the end of June 2018.

Once the downward break of the long-lasting triangle occurred, we see that the price made a limited downward movement, which did not yield below $14 per ounce.

Conclusion

Based on the discussion of this article, we can conclude that regardless of the corrective structures that have three or five internal waves, these can be simplified as triangular patterns. Also, we can observe that a corrective wave or a short-range narrow triangle is likely to have an extended move that, in terms of Elliott’s wave theory, could correspond to an extended wave.

On the other hand, extensive triangular formations, or of a wide range, could lead the price to move in a range not as broad as in the previous case.

Finally, in the last example, we recognize how the alternation principle works in Elliott’s wave theory. Just as the first observed triangle is simple, and has a short duration, and the second corrective formation is extensive and complex.

Categories
Forex Market Analysis

Gold Sideways Trend Continued – ADP Fails to Drive Price Action! 

These back to backfires from Trump administration are affecting the credibility of the United States. Trump, on Monday, said that giving U.S. legislation to Hong Kong protestors was not making trade negotiations easy with China. However, he believed that Beijing still wanted a deal with the U.S. Trump added that China was having by far the worst year that hey had in 57 years and was still paying for the trade war. He said that in contrast, the U.S. was doing very well, and it can even do better with a flick of a pen.

These back to backfires from Trump administration are affecting the credibility of the United States. Trump, on Monday, said that giving U.S. legislation to Hong Kong protestors was not making trade negotiations easy with China. However, he believed that Beijing still wanted a deal with the U.S. Trump added that China was having by far the worst year that hey had in 57 years and was still paying for the trade war. He said that in contrast, the U.S. was doing very well, and it can even do better with a flick of a pen.

These back to backfires from Trump administration are affecting the credibility of the United States. Trump, on Monday, said that giving U.S. legislation to Hong Kong protestors was not making trade negotiations easy with China. However, he believed that Beijing still wanted a deal with the U.S. Trump added that China was having by far the worst year that hey had in 57 years and was still paying for the trade war. He said that in contrast, the U.S. was doing very well, and it can even do better with a flick of a pen.

In October, China has reported its slowest growth in the economy in 27 years when trade tensions with the U.S. hit its manufacturing sector. 

On the other hand, the Wards Total Vehicle Sales from the United States on Tuesday was published and showed growth to 17.1M from expected 16.8M and supported the U.S. Dollar.

Gold continues to gain bullish momentum as the U.S. private employers scored fewer jobs in six months in November, falling below economists forecast. The U.S. companies’ payrolls grew by 67K last month as per the ADP National Employment Report. 


XAU/USD – Daily Technical Levels

Support Resistance 

1,464.34   1,486.32

1,451.14   1,495.1

1,429.16   1,517

Pivot Point 1,473.12

For the U.S. session, gold is likely to trade in a narrow range of 1,474 – 1,483. The chances of a bearish break below 1,474 remain high. Thus, the second bearish target for gold is likely to be 1,467 today. Good luck! 

 

Categories
Forex Market Analysis

Dramatic Buying In Gold – Trump Inflict Sudden Tariff In Brazil, and Argentina!

On Tuesday, gold prices were trading in a tight area of 1,462 – 1,452 as traders were mostly staying out of the market during the Asian and European sessions. All of a sudden, we noticed a dramatic buying trend in gold, which lead its prices towards 1,472 and even higher. Most of the buying came in response to U.S. President Donald Trump’s action of slapping tariffs on Brazil and Argentina.

On Tuesday, gold prices were trading in a tight area of 1,462 – 1,452 as traders were mostly staying out of the market during the Asian and European sessions. All of a sudden, we noticed a dramatic buying trend in gold, which lead its prices towards 1,472 and even higher. Most of the buying came in response to U.S. President Donald Trump’s action of slapping tariffs on Brazil and Argentina.

On Tuesday, gold prices were trading in a tight area of 1,462 – 1,452 as traders were mostly staying out of the market during the Asian and European sessions. All of a sudden, we noticed a dramatic buying trend in gold, which lead its prices towards 1,472 and even higher. Most of the buying came in response to U.S. President Donald Trump’s action of slapping tariffs on Brazil and Argentina.

Besides this, Construction spending from the United States also dropped to -0.8% from the expectations of 0.3% and weighed on the U.S. dollar. The ISM Manufacturing prices showed a minor drop of 46.7 from expected 47.0.

On the trade deal front, the U.S. dollar remained under pressure after the demand of tariffs removal as a part of the phase-one deal by the Chinese government. Trump, in response, told Commerce Secretary Wilbur Ross, who reported the media that Trump would not back off from tariff hike on December 15 if China would not sign the phase-one deal by then.

Taking a look at the technical side of gold, the metal is trading around 1,474 area with an immediate resistance around 1,476. The precious metal has violated the descending triangle pattern, which is now supporting gold around 1,466 area.



Support Resistance
1,455.8    1,467.31
1,449.15 1,472.18
1,437.64 1,483.69
Pivot Point 1,460.66

On the 240 minutes chart, gold may form three white soldiers pattern, which typically represents chances of a bullish bias among traders. Likewise, the leading indicators, such as RSI and MACD, are also suggesting the odds of a bullish trend in gold. Consider staying bullish above 1,466 and bearish below 1,476/77 today. Good luck!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 02 – Top Trade Setups In Forex – ISM Manufacturing PMI In Focus! 

The U.S. Dollar Index rose edged down to 98.27 from 98.33 during the previous week. The euro edged up 0.1% to $1.1015. Official data showed that November consumer prices in

The U.S. Dollar Index rose edged down to 98.27 from 98.33 during the previous week. The euro edged up 0.1% to $1.1015. Official data showed that November consumer prices in

The U.S. Dollar Index rose edged down to 98.27 from 98.33 during the previous week. The euro edged up 0.1% to $1.1015. Official data showed that November consumer prices in the eurozone increased 1.0% on year in November (+0.9% expected), and October jobless rate was at 7.5% (as expected, 7.6% in September). 

The U.S. stocks closed lower while ending November with the most significant monthly gain since June. The Dow Jones Industrial Average fell 112 points (-0.4%) to 28051, the S&P 500 lost 12 points (-0.4%) to 3140, and the Nasdaq Composite was down 39 points (-0.5%) to 8665.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair hit the bearish track and continue to flashing red despite the positive China manufacturing data. As of writing, the EUR/USD currency pair currently trading near the 1.1018, representing slight declines on the day and consolidates in the range of 1.1015-1.1028.

The Caixin PMI, which surveys the small and medium-sized export-oriented units, increased to 51.8 in November from October’s 51.7 to record the fastest expansion in 3-3-years. While the official PMI released on Saturday also printed well above 50 to mark the first expansion in 13 months.

As in result, the risky assets getting bids due to data. For example, Japan’s Nikkei surged by1% in Asia, and the NZD/USD pair rose to a one-month high. Even so, the EUR currency is struggling.

Looking ahead, the EUR/USD currency pair may take bids if the European Central Bank (ECB) President Christine Lagarde’s pushes European leaders to boost spending, indirectly hinting low chances of more monetary stimulus in the foreseeable future. Notably, the Lagarde’s testimony is scheduled to happen at 14:00 GMT.

The market’s focus will shift to the U.S. data on the North American session. The US ISM Manufacturing PMI (Nov), due at 15:00 GMT, is forecasted to print at 49.4 against 48.3 in October. An above-50 print may put pressure on EUR/USD.

The final German and Eurozone PMI numbers scheduled to release in Europe may not have a big impact, unless they carry a significant upward or downward revisions to the preliminary figures released on November 22.

    

Daily Support and Resistance

  • S3 1.0915
  • S2 1.0962
  • S1 1.099

Pivot Point 1.1009

  • R1 1.1037
  • R2 1.1056
  • R3 1.1103

EUR/USD– Trading Tips

Traders are strengthening the downside bias amid positive NFP forecast, which is due to release later this week. The EUR/USD disrupted the tight trading range of 1.1016 – 1.0992 to trade near the 1.1020 trading level. 

At the moment, the EUR/USD’s now consolidating in a narrow trading range of 1.1030 – 1.1015. A bullish breakout of 1.1030 can lead the EUR/USD prices towards 1.1055, and on the lower side, 1.0985 endures the final support.

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing red and representing 0.10% losses. As of writing, the cable pair is currently trading at 1.2915 and consolidates in the narrow range between 1.29107 and 1.2918 at the start of the week, mainly due to series of United Kingdom election polls which doing limited to affect a leading Tory sentiment.

The GBP currency was seen stronger in the recent times in the wake of Brexit Party promising not to stand against the Tories in voters where there is a sitting Tory MP, underpinning the probability of a Tory majority after the quick threat of no-deal Brexit.

The investors are now keeping their eyes on the election outcomes. Still, the market will likely hold the risks of talks between the United Kingdom and the European Union, which may cover any quick bullish move in the GBP on a Tory victory.

At the Sino-US front, doubts over the phase-one deal between the United States (U.S.) and China are weighing on the greenback, whereas recently, actual activity data from China adds strength to the risk sentiment.

Looking forward, the market will keep their eyes on the U.S. main event in the U.S. nonfarm payroll jobs report. We expect employees to increase by 200k in November, after the above-consensus 128k October print.

All traders will keep their eyes on the trade and political headlines November month Purchasing Managers’ Index (PMI) data from the U.S., and the U.K. will likely offer intermediate moves. Including, U.K. Manufacturing PMI, anticipated 48.3, will be the first to observe ahead of the U.S. Markit and ISM activity indices. 

Estimates suggest the Markit PMI remain unchanged at 52.2, but ISM Manufacturing PMI may rise to 49.9 from 45.5.

Daily Support and Resistance

  • S3 1.2784
  • S2 1.285
  • S1 1.2889

Pivot Point 1.2917

  • R1 1.2955
  • R2 1.2984
  • R3 1.3051

GBP/USD– Trading Tips

The cable pair is currently trading at 1.2915 and consolidates in the narrow range between 1.29107 and 1.2918 at the origin of the week, mainly due to series of United Kingdom election polls which doing limited to affect a leading Tory sentiment.

On Friday, the GBP/USD continues to above the suggested support level of 1.2880. The pair has formed neutral candles above this level as traders are waiting for a fundamental reason to get in the market. 

On the 2-hour timeframe, the RSI and MACD are holding near 50 and 0, suggesting neutral bias among investors. Therefore, we may see a slightly bearish trend in the GBP/USD below 1.29400 area until a 38.2% Fibonacci retracement level of 1.2900. Consider staying bullish above 1.2900 today to target 1.2945/65. 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the 6-months high 109.70; this is the highest level since May 30, by the way, the safe-haven currency Japanese Yen came under pressure after the upbeat China manufacturing data and uptick in the United States equity index futures.

As of writing, the USD/JPY currency pair is currently trading at 109.70, the highest level since May 30, and the S&P 500 futures are reporting a 0.30% rise.

As we all well aware that President Donald Trump signed the Hong Kong Democracy Bill. China criticized the move because interference into its internal matters regarding Hong Kong, China warned to take revenge.

However, China did not take any revenge so far, and that may support the risk assets. Moreover, the data released over the weekend showed China’s manufacturing sector unexpectedly increased in November. The purchasing managers’ index (PMI) for China’s manufacturing sector inched up to 50.2 in November from 49.3 in October. A reading above 50 indicates expansion.

At the greenback front, the U.S. dollar stayed little changed on Monday in Asia after the release of reliable economic data in the U.S. the previous week. The U.S. Dollar Index traded marginally higher early in the day, up 0.03% to 98.20 by 8:41 PM ET (01:40 GMT).

Looking forward, the initial indications of a turnaround in the world’s 2nd-largest economy support further upside in the risk assets and the USD/JPY pair. The Caixin China manufacturing PMI, which focuses on the small and medium-sized export-oriented units, printed above the estimate of 51.5 soon before press time.

Meanwhile, the bullish movement will likely weaken if the focus shifts to the negative news regarding the United States and China trade talks because the report came earlier today that the optimism between the United States and China decreased about the phase-one deal.

    

Daily Support and Resistance

  • S3 108.98
  • S2 109.25
  • S1 109.38

Pivot Point 109.53

  • R1 109.65
  • R2 109.8
  • R3 110.07

USD/JPY – Trading Tips

The USD/JPY is consolidating at 109.425, and it has just begun to trade in the overbought zone as the RSI and MACD are stuck in the overbought territory. On the 4 hour graph, the USD/JPY has created a Doji and Spinning top, which typically implies chances neutral bias in the USD/JPY. On the downside, the USD/JPY may drop towards 38.2% Fibonacci retracement until 109.150. Besides Fibonacci, the bullish channel is also supporting the USD/JPY at the same level. So look for taking a sell trade below 109.700 today to target 109.200 and buying above 109.300 to target 109.700. 

All the best!

Categories
Forex Psychology

Having the Mindset to Deal with a Frustrating Situation

Patience is one of the most essential components of Forex traders. Traders are to keep patience in every single second. Before triggering an entry, a trader is to find out

Patience is one of the most essential components of Forex traders. Traders are to keep patience in every single second. Before triggering an entry, a trader is to find out

Patience is one of the most essential components of Forex traders. Traders are to keep patience in every single second. Before triggering an entry, a trader is to find out a trend, key levels, momentum, news events, etc. After all this hard work, he may not be able to take the entry. It is frustrating, but for Forex traders, it is a usual thing. A trader must accept it simply. In today’s lesson, we are going to demonstrate an example of that.

The price heads towards the South; it consolidates and heads towards the North. The price breaches a level of resistance, which the buyers are to keep an eye at for a bullish reversal. Let us proceed to find out how the next chart looks.

The buyers were waiting for the red-marked level to hold the price and produce a bullish reversal. If the level had held the price and pushed the price towards the North breaching the highest high, the buyers would have taken a long entry. They must have waited eagerly, but all went in vain.

The price headed towards the South further and found its support. After finding the support, it heads towards the North again. On its way, it makes a breakout at the highest high of the last bearish wave. The buyers are to keep an eye on this pair again to find a long entry. To take the long entry, the price is to come back at the breakout level, to produce a bullish reversal candle, and to breach the highest high of the last wave.

This time it looks good. A candle closes within the level of support. The buyers are to keep an eye to get a bullish reversal candle first. This means they have to be patient again. Let us proceed to find out what happens next.

The level produced a bullish reversal candle, but it did not breach the highest high. It instead came down and breached the support level. In a word, all efforts have gone in vain. What wastage of time!

                   The Bottom Line

If you want to take trading seriously as a business or a consistent source of income, you must not think that it is a wastage of your time. It is an investment. Traders must be patient and not be frustrated when opportunities are lost or do not come as per expectation. They must deal with it professionally.

The bad thing is it does not come with practice or experience. The good thing is it is all about mindset. Even a beginner may have a mindset to deal with a situation like this, whereas it might frustrate a trader with five years of experience. We must remember that if it frustrates too much, it hurts trading performance.

 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 29 – Top Trade Setups In Forex – Brace for European Inflation Report! 

The U.S. dollar steadied against most major currencies on Thanksgiving day, with the ICE Dollar Index closing relatively unchanged on the day at 98.32. The euro edged up 0.1% to

The U.S. dollar steadied against most major currencies on Thanksgiving day, with the ICE Dollar Index closing relatively unchanged on the day at 98.32. The euro edged up 0.1% to

The U.S. dollar steadied against most major currencies on Thanksgiving day, with the ICE Dollar Index closing relatively unchanged on the day at 98.32. The euro edged up 0.1% to $1.1012. Official data showed that the eurozone’s Economic Confidence Index rose to 101.3 in November (101.0 expected) from 100.8 in October. Later today, November CPI (+0.9% on-year expected) and October jobless rate (steady at 7.5% expected) will be reported.

The German Federal Statistical Office will release November jobless rate (steady at 5.0% expected) and October retail sales (+0.2% on month expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair found on the bearish track and representing 1.27 decline on the monthly opening rate of 1.1151. As of writing, the currency pair is trading near 1.10.

The EUR/USD currency pair is moving bearish at the end of November, having surged 2.33% during October. So, that was the most significant monthly increase since January 2018. However, the currency pair has come under pressure, pouring cold water over the optimism generated by October’s 2.3% gain.

On the other hand, Consumer spending, as represented by retail sales, is anticipated to have increased at an annualized rate of 1.1% in October, having increased by 3.4% in the previous month. The retail sales data is scheduled to release at 07:00 GMT.

Meanwhile, the data due at 08:55 GMT is expected to show the economy added 5,000 jobs in November, and the unemployment rate continued steady at 5%. The Post-German data, the focus would shift to the Eurozone consumer price index and the jobless rate, scheduled for release at 10:00 GMT. 

The EUR currency may come under the selling pressure and hit the bearish track if the German jobs data disappoint expectation. As we know, Germany is already facing bearish pressure from the external sector. If the labor market cools sharply, the consumers will likely shift on the purse saving mood, leading to a deeper economic recession.

On the other side, the EUR/USD currency pair will likely find love if the key data crosses the forecast figures. Notably, the gains could be short-lived due to the United States and China trade tensions. As we all well aware that President Donald Trump signed the Hong Kong Democracy Bill earlier this week, irritating China. That could hurt the trade matters.

Daily Support and Resistance

    

  • S3 1.0958
  • S2 1.098
  • S1 1.099

Pivot Point 1.1002

  • R1 1.1012
  • R2 1.1024
  • R3 1.1046

EUR/USD– Trading Tips

The EUR currency outlined a sideways trading pattern, which is signifying neutral bias among traders, and that’s mostly due to the limited volatility ahead of the weekend. However, traders are strengthening the downside bias put forward by the lower high at 1.1097 established on November 21.  

The 14-day relative strength index is proposing bullish bias, but it’s directing lower now as it’s valued may cross below 50. Let’s look for bearish trades below 1.1020 level today to target 1.1099 and 1.0960.

GBP/USD– Daily Analysis

The GBP/USD currency pair is consolidating in the narrow range of 1.2910-1.2917. The pair got support from the polls showing continued fame of the ruling Conservative Party. Moreover, probably the reason behind the lack of more strength is the stepping back of the United Kingdom Prime Minister Boris Johnsons from certain debates.

After the YouGov’s poll of a clear lead of the ruling Tory Party over the opposition Labour Party, accusations on the United Kingdom Prime Minster raised as he stepped back from the debate on channel4 and is yet to confirm an interview with BBC’s Andrew Neil, as per the Independent. Whereas the opposition leaders have started using rude words and media support the reaction, probably due to this, they will lose their fame ere the December snap election.

The Conservative’s boss was recently criticized by the opposition Labour Party leader Jeremy Corbyn regarding selling the National Healthcare Systems (NHS) to the United States, citing leaked government papers. The decreasing chances of another strong poll supporting the Troy leadership and the greenback recovery are the major catalyst to drive trading volume in the GBP/USD pair.

So far, the market risk sentiment is still directionless, with the United States’ ten-year Treasury yields taking rounds to 1.77% with Asian equities flashing mixed signals.

Looking ahead, the half-day trading session in the U.S. and shortage of data and events will likely keep the market unactive. However, political and trade headlines will entertain the traders.

    

Daily Support and Resistance

  • S3 1.2698
  • S2 1.2794
  • S1 1.2857

Pivot Point 1.2891

  • R1 1.2954
  • R2 1.2987
  • R3 1.3083

GBP/USD– Trading Tips

On Friday, the GBP/USD continues to above the suggested support level of 1.2880. The pair has formed neutral candles above this level as traders are waiting for a fundamental reason to get in the market. 

On the 2-hour timeframe, the RSI and MACD are holding near 50 and 0, suggesting neutral bias among investors. Therefore, we may see a slightly bearish trend in the GBP/USD below 1.29400 area until a 38.2% Fibonacci retracement level of 1.2900. Consider staying bullish above 1.2900 today to target 1.2945/65. 

USD/JPY – Daily Analysis

 The USD/JPY currency pair is flashing red and hit the session low near the 109.46, having hit the high of 109.60 three hours ago. As of writing, the currency pair is consolidating in the day’s range of 109.47-109.59.

The USD/JPY currency pair is stepping back, possibly following the slow descent of the S&P 50 futures. The index futures were down 0.10% in early Asia and are currently reporting a 0.26 decline. Bank of Japan’s (BOJ) Governor Kuroda was out on the wires a few minutes before press time asking for structural changes. Kuroda told Parliament that structural reforms must accompany fiscal and monetary stimulus measures to heighten the economy’s long-term growth potential and added that the central bank’s ultra-loose policy is aimed at boosting inflation to 2% and not monetize debt. 

Governor Kuroda’s comments are not surprising because the central bank has little capacity to stimulate, having run an expansionary monetary policy for more than 6-years. 

Looking forward, the Japanese Yen will likely continue to gain ground, because equities may trade risk-averse in the wake of the decision by President Trump to sign the Hong Kong Democracy Bill. 


Daily Support and Resistance

  • S3 108.42
  • S2 108.92
  • S1 109.24

Pivot Point 109.42

  • R1 109.74
  • R2 109.93
  • R3 110.43

USD/JPY – Trading Tips

The USD/JPY is consolidating at 109.425, and it has just begun to trade in the overbought zone as the RSI and MACD are stuck in the overbought territory. On the 4 hour graph, the USD/JPY has created a Doji and Spinning top, which typically implies chances neutral bias in the USD/JPY.  

On the downside, the USD/JPY may drop towards 38.2% Fibonacci retracement until 109.150. Besides Fibonacci, the bullish channel is also supporting the USD/JPY at the same level. So look for taking a sell trade below 109.700 today to target 109.200 and buying above 109.300 to target 109.700. 

All the best!

Categories
Forex Basic Strategies

The H4-H1, an Action-Packed Combination

In today’s lesson, we are going to demonstrate an example of the H4 and the H1 chart combination for taking entries. Both are intraday charts. A large number of traders

In today’s lesson, we are going to demonstrate an example of the H4 and the H1 chart combination for taking entries. Both are intraday charts. A large number of traders

In today’s lesson, we are going to demonstrate an example of the H4 and the H1 chart combination for taking entries. Both are intraday charts. A large number of traders do the job using those two charts. Thus, it is an excellent combination to trade in the Forex market.

Let us get started.

This is an H4 chart. The chart shows that the price heads towards the North. On its way, it made an upside breakout, which may play a vital role in pushing the price towards the North further. Despite having a long lower shadow, the last candle comes out as an Engulfing candle. The price may start its correction this time.

As expected, the price comes down to the flipped support and produces a bullish engulfing candle. The last swing high is far enough to offer a 1:1 risk-reward. However, we do not take an entry right after the candle H4 closes. We rather switch over to the H1 chart.

This is how the H1 chart looks. It shows that the price starts having correction by producing a Doji candle. An engulfing bullish candle closing above the Doji candle is the signal to go long here. Let us wait for a Marubozu bullish candle.

This is one good-looking Marubozu bullish candle. However, it closes right at the resistance zone. Risk-reward is 100:0 here. We must wait for an H1 consolidation and breakout towards the upside to take a long entry.

Here they come. The price consolidates and produces an H1 bullish candle, which closes above the resistance. Traders may trigger a long entry right after the candle closes by setting stop loss below the last support. The H1 chart does not show any resistance nearby. Thus, the price may head towards the North with good bullish momentum. It may get us 1:2 risk-reward or even more. Usually, the price reverses once 1:1 risk-reward is achieved. Let us find out what happens here.

The price consolidates much earlier than our expectations. Our reward is not achieved. Thus, we keep holding our position. We are risking a loss here. However, we must keep our patience.

The price makes another upside breakout and heads towards the North. The wave gets us our expected reward and starts having a pullback. If we have not set our take profit, we may manually close it; or we may use a trailing stop loss. We will demonstrate some examples of using trailing stop loss in this combination in upcoming lessons.

The Bottom Line

The H4-H1 combination is an eventful combination. A Trader needs to have skill, expertise, experience, and patience to handle it. Once he learns it well, it may have his hands full in making money by trading.

Categories
Forex Market Analysis

Daily F.X. Analysis, November 28 – Top Trade Setups In Forex – Happy Thanksgiving! 

The U.S. dollar kept trading within a tight range on Wednesday, amid thin trading before the Thanksgiving holiday. The ICE Dollar Index closed broadly flat on the day at 98.31.

The U.S. dollar kept trading within a tight range on Wednesday, amid thin trading before the Thanksgiving holiday. The ICE Dollar Index closed broadly flat on the day at 98.31.

The U.S. dollar kept trading within a tight range on Wednesday, amid thin trading before the Thanksgiving holiday. The ICE Dollar Index closed broadly flat on the day at 98.31.

The British pound rose 0.5% to $1.2930. A U.K. election poll showed that the Conservative would retain a majority of seats in the parliament. The euro fell 0.1% to $1.1005, while USD/JPY gained 0.3% to 109.38. 

The Federal Reserve released the Beige Book, which stated that economic activity expanded modestly, the outlook remains positive, and growth is expected to continue into next year. Besides, theU.S. economic data, third-quarter GDP growth was revised to 2.1% (1.9% expected and previously estimated), and durable goods orders increased 0.6% on month in October (-0.9% estimated).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair consolidates on the uncertain track and may face a hard time defending crucial support until the German inflation data blows past predictions, weakening dovish ECB expectations. Today, the German inflation data is scheduled to release at 13:00 GMT.

As of writing, the EUR/USD currency pair seems set for a possible break below 1.0994, which is the 61.8% Fibonacci retracement of the rally from 1.0879 to 1.1179.

At the USD front, the greenback got the support mainly due to the 3rd-quarter gross domestic product was updated higher to 2.1% from 1.9%, in the wake of positive consumer spending data. The Fed’s preferred measure of inflation, which strips out volatile food and energy prices, soared higher to 2.1% from 1.9% in the 2nd-quarter. The inflation gauge exceeded an expectation of 1.7%.

It must be noted that the upbeat data of the U.S. may push the greenback further high on the day. Traders will be likely to sell dollars over increases uncertainty as President Trump’s decision to sign the Hong Kong Democratic Bill has irritated the Dragon Nation, and fears have increased regarding side effects on the trade deal. This is evident from the 0.25% drop in the S&P 500 futures seen at press time.

Looking forward, the breakdown will likely remain elusive manly if the preliminary German consumer price index for November crosses expectations by a considerable range, creating the opportunity for the European Central Bank head Christine Lagarde to maintain her neutral-to-hawkish stance for some time.

On the flip side, the CPI is anticipated to drop 0.6% month-on-month in November, having increased by 0.1% in October. The EUR/USD currency pair may plan a notable bounce from $1.10 if the inflation figure crosses estimates by a significant margin.


Daily Support and Resistance

  • S3 1.0958
  • S2 1.098
  • S1 1.099

Pivot Point 1.1002

  • R1 1.1012
  • R2 1.1024
  • R3 1.1046

EUR/USD– Trading Tips

On the technical side, the EUR currency charted a bearish engulfing candle yesterday, strengthening the downside bias put forward by the lower high at 1.1097 established on November 21. On the technical side, indicating the route of least resistance is to the bearish. The 14-day relative strength index is suggesting selling conditions with as the RSI value holds below 50, and the daily MACD histogram is again printing deeper bars below the zero line, a sign of strengthening bearish momentum. Let’s look for staying bullish above or bearish below 1.1000 level today to target 1.1055 on the upper side and 1.0985 on the lower side. 

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing green and hit the 4-day high to 1.2920, mainly due to the ruling Tory party, which will keep the helm of the United Kingdom with a vast majority. The YouGov Poll on the MRP model is highly appreciated for its forecasts regarding the United Kingdom’s result since they forecasted a suspended parliament in 2017. 

The poll suggests Conservatives gain 359 seats against the opposition Labour Party’s 211 seat estimate. Apart from this, It also shows that 43% of vote share will be allocated to the ruling Tories against Jeremy Corbyn-led Labour Party’s 32% expected share, which in turn indicates an 11-point lead of the Prime Minister (PM) Boris Johnson led Conservatives over the Labour Party.

On the other hand, the GBP/USD currency pair is found under pressure during the Asian session today. The GBP currency has initially fallen mainly due to expectations that the Tory announcement might leave a negative impact on the ruling party popularity ahead of the December Snap election. But now the GBP/USD is likely to find enough support below at the 1.2900 regions to bounce yet again. 

A report came from the Guardian’s journalist Owen Jones that the British Prime Minister Boris Johnson’s Conservatives have a significant majority over the Labour Party in the YouGov’s MRP poll.

Looking forward, the traders will just have limited data to trade as the United States enjoys thanksgiving holiday. Therefore, trade and political headlines will keep the market active.


Daily Support and Resistance

    

  • S3 1.2698
  • S2 1.2794
  • S1 1.2857

Pivot Point 1.2891

  • R1 1.2954
  • R2 1.2987
  • R3 1.3083

GBP/USD– Trading Tips

On Thursday, the GBP/USD has hit our previously suggested target level of 1.2880; in fact, it soared further to trade around 1.2940 level. Currently, the pair has entered the overbought zone, as we can see on the 2-hour timeframe, the RSI and MACD are holding near 70 suggesting chances of a bearish correction.

Therefore, we may see a slightly bearish trend in the GBP/USD below 1.29400 area until a 38.2% Fibonacci retracement level of 1.2900. Consider staying bullish above 1.2900 today to target 1.2945/65. 

 USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and dropped by 0.13% to 109.38, mainly due to fears regarding United States President Donald Trump’s decision to sign the Hong Kong bill. It may irritate China and could drop a negative impact on the trade talks. 

As a result, the safe-haven currency Japanese Yen has picked up buying. The USD/JPY pair is currently trading at 109.38, representing a 0.13% drop on the day. The pair has dropped more than 20 pips in the last 90 minutes or so. 

The U.S. President Trump signed the Hong Kong Human Rights and Democracy Act in early Asia, reaffirming support for Hong Kong’s pro-democracy protests after the majority of the City’s districts turned in favor of pro-democracy candidates with record voter turnout this week.

It must be noted that China has repeatedly warned the U.S. administration not to interfere in their internal affairs. Therefore, President Trump’s move will likely hurt the relationship with China at a time when both sides are trying to reach a “phase one” trade deal.

Looking forward, deeper declines could be in the offing if the Asian and European equities turn risk-averse concerning the latest political developments. 

At the USD front, the greenback found on the buying track during the United States trading hours on Wednesday, mainly due to official data, which showed the U.S. gross domestic product (GDP) increased 2.1% in the 3rd-quarter, driven by strong consumer spending. Notably, the pair hit a 6-month high of 109.61 before dropping on Trump’s decision to sign Hong Kong Democracy bill. 

Daily Support and Resistance

    

  • S3 108.42
  • S2 108.92
  • S1 109.24

Pivot Point 109.42

  • R1 109.74
  • R2 109.93
  • R3 110.43

USD/JPY – Trading Tips

The USD/JPY is trading at 109.425, and it has just entered the overbought zone as the RSI and MACD are stuck in the overbought territory. On the 4 hour chart, the USD/JPY has formed a tweezers top, which typically suggests chances of a bearish bias trend in the USD/JPY. 

On the downside, the USD/JPY may drop towards 38.2% Fibonacci retracement until 109.150. Besides Fibonacci, the bullish channel is also supporting the USD/JPY at the same level. So consider taking a sell trade below 109.500 today to target 109.200. 

All the best!

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Forex Market Analysis

Descending Triangle In AUD/USD – Brace to Trade Breakout! 

The AUD/USD currency pair sidelined near the 0.6788, despite the fifth-consecutive quarterly drop in Australian Construction Work, having hit the low of 0.6782 during the European session. 

The bearish trend

The AUD/USD currency pair sidelined near the 0.6788, despite the fifth-consecutive quarterly drop in Australian Construction Work, having hit the low of 0.6782 during the European session. 

The bearish trend

The AUD/USD currency pair sidelined near the 0.6788, despite the fifth-consecutive quarterly drop in Australian Construction Work, having hit the low of 0.6782 during the European session. 

The bearish trend in Aussie came after the Westpac Banking Corp announced on Wednesday in its forecast that the Reserve Bank of Australia (RBA) is expected to lower interest rates twice until it reaches 0.25% by June 2020. Later they will go for launching quantitative easing (Q.E.), 

The Construction figures for the (Q3) appeared in at -0.4% – the fifth straight quarterly drop. The numbers add to the gross domestic product, which will be released next week. However, the actual figure was unexpectedly better than the 1% decline. 

On the other hand, the United States President Donald Trump continues its hopes of a phase-one deal with China even after the media releases from Beijing that blamed the U.S. for unfair behavior. Moreover, the greenback stays on the bullish track across the board because investors still trust on the U.S. dollar during the risk-on sentiment.

Thus, the stronger dollar and weaker Aussie is causing bearish trends in the AUD/USD pair. 

Technically, the AUD/USD pair is trading sideways within a narrow trading range of 0.6800 – 0.6765. That’s the descending triangle pattern, which is keeping the pair in a consolidation. Mostly, this kind of pattern violates on the lower side, and if this happens, we may see AUD/USD prices going towards 0.6735.


Daily Support and Resistance

  • S3 0.6718
  • S2 0.675
  • S1 0.6763
  • Pivot Point 0.6781
  • R1 0.6795
  • R2 0.6813
  • R3 0.6844

Today, consider taking sell positions below 0.6800 until 0.6765, and then if 0.6765 also gets violated, we will have a chance to add further selling until 0.6735. All the best! 

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Forex Market Analysis

Daily F.X. Analysis, November 27 – Top Trade Setups In Forex – U.S. GDP In Play! 

The U.S. Dollar Index was little changed on Tuesday, closing relatively flat on the day at 98.25. The euro gained 0.1% to $1.1022. The German GfK Consumer Confidence Index edged

The U.S. Dollar Index was little changed on Tuesday, closing relatively flat on the day at 98.25. The euro gained 0.1% to $1.1022. The German GfK Consumer Confidence Index edged

The U.S. Dollar Index was little changed on Tuesday, closing relatively flat on the day at 98.25. The euro gained 0.1% to $1.1022. The German GfK Consumer Confidence Index edged up to 9.7 in December (9.6 expected and in November).

On the fundamental’s front, the Conference Board Consumer Confidence Index plunged to 125.5 in November (127.0 expected) from 126.1 in October. Wholesale inventories rose 0.2% on month in October (as expected), while new home sales fell to an annualized rate of 733,000 units (705,000 units estimated) from 738,000 units in September. Let’s took at today’s trade setups. 

Economic Events to Watch Today

Let’s took at these fundamentals.

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing red and hit the record lows to trade below the seven months lows. At the moment, the currency pair is currently trading at 1.1015.

The reason behind decreased uncertainty could be the recent progress in the United States and China trade deal, which is likely to resolve issues. 

For now, the focus is likely to be on the U.S. data Q3 GDP, Personal Spending (Oct), Durable Goods Orders (Oct), Weekly Jobless Claims. The 3rd-quarter annualized GDP is forecasted to be unchanged at 1.9%. The economy increased by 2% and 3.1% in the 2nd and the 1st quarter as well.

With that being said, a prolonged period of low volatility often paves the way for a big move on either side. The level of uncertainty will drop if both nations reach a trade agreement. This ultimately can drive a significant drop in the common currency against the U.S. dollar. 

Daily Support and Resistance

  • S3 1.0959
  • S2 1.0988
  • S1 1.1001
  • Pivot Point 1.1017
  • R1 1.103
  • R2 1.1045
  • R3 1.1074

EUR/USD– Trading Tips

On the technical side, indicating the route of least resistance is to the bearish. The 14-day relative strength index is suggesting selling conditions with as the RSI value holds below 50, and the daily MACD histogram is again printing deeper bars below the zero line, a sign of strengthening bearish momentum. The double bottom pattern on the 4-hour chart is extending support to the direct currency pair. Let’s look for staying bullish above or bearish below 1.1000 level today to target 1.1055 on the upper side and 1.0985 on the lower side. 

GBP/USD– Daily Analysis

The GBP/USD currency pair found on the bearish track and still on the backfoot while dropping 1.2850, mainly due to showing depreciation in the ruling Conservative Party lead. The greenback strength leaves a negative impact on the GBP/USD currency pair.

The Tory announcement is already under criticism for its lack of defense, failure to mention promises on the National Healthcare System (NHS), and Brexit’s deadline is keeping the political depression for the ruling party. The Independent says that former senior judge blames the United Kingdom’s (U.K.) ‘s current Prime Minister for his reckless private life.

On the other hand, the United States President Donald Trump continues its hopes of a phase-one deal with China even after the media releases from Beijing that blamed the U.S. for unfair behavior. The greenback stays on the bullish track across the board because investors still trust the U.S. dollar during the risk-on sentiment.

For now, there is no significant data and event is scheduled to release from the United Kingdom, the United States economic calendar is full of critical figures ranging from the 2nd-version on 3rd-quarter (Q3) Gross Domestic Product (GDP) to October month Durable Goods Orders. The markets will keep their eyes on the U.S. Personnel Income and Spending, coupled with the Core Personal Consumption Expenditure Index.

Ahead of the data, T.D. Securities anticipates the Core PCE to stay around 0.7% YoY whereas also expecting Durable Goods Orders to recover to -1.0%.

Daily Support and Resistance

  • S3 1.2748
  • S2 1.2818
  • S1 1.2859
  • Pivot Point 1.2887
  • R1 1.2928
  • R2 1.2956
  • R3 1.3025

GBP/USD– Trading Tips

On Wednesday, the GBP/USD is now heading lower to test the triple bottom support area of 1.2820. The cable seems to close a tweezers bottom pattern on the 2-hour chart, which is famous for driving a bullish trend in the market. So here we can expect GBP/USD to trade bullish above 1.2820 to target 1.2880 later today. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair found on the bullish track, extending its recent recovery rally. As of writing, the currency pair currently trading at 109.15. The USD/JPY pair hit the two-weeks high during the Asian session mainly due to the positive headlines which came out from the United States and China regarding trade deal.

The pair closed beyond 200-day Simple Moving Average (SMA) for the first time since early November because the market’s risk sentiment further improved. Traders, the primary reason behind such a drop in uncertainty is increasing expectations that the United States (U.S.) and China will soon sign an initial, or phase-one, trade deal.

Elsewhere, the new trade headlines came from the United States President Donald Trump that we are very close to making a deal with China. The South China Morning Post’s (SCMP) story highlights the Commerce Secretary’s order to protect telecommunication networks and their supply chains from national security warnings. Though, the same fails to get much of the attention.

At the Fed front, the positive comments from the Federal Reserve (Fed) Chairman Jerome Powell and Governor Lael Brainard also supported the USD/JPY currency pair. Notably, the Federal Reserve (Fed) Chairman Jerome Powell praised the current economic status and the present monetary policy, whereas Governor Brainard said that the economic risk outlook still weak, but the sentiment seems to be improving. 

Traders did not give much focus on the comment from the President of the Federal Reserve bank of Dallas, Robert Kaplan, that the United States economy has a good opportunity to grow by 25 in the coming year. Still, unfortunately, the growth in the 4th-quarter is going to be weak.

The 2nd version of the 3rd-quarter US Gross Domestic Product (GDP) and October month Durable Goods Orders will be closely observed in the U.S. economic calendar as well as the comments from the Bank of Joana board member Makoto Sakurai, and trade headlines can be kept for intermediate direction.

Daily Support and Resistance

  • R3: 109.38
  • R2: 109
  • R1: 108.77
  • Pivot Point 108.61
  • S1: 108.39
  • S2: 108.23
  • S3: 107.84

USD/JPY – Trading Tips

The USD/JPY is trading at 109.100, and it has just violated the horizontal resistance area of 109. The closings of bullish candles above 109 mark are suggesting further buying until 109.300 and 109.450. Besides, the MACD and RSI are still holding in the bullish zone. Consider taking buying trades over 109 to target 109.35 today. 

All the best!

Categories
Forex Basic Strategies Forex Daily Topic

A Story of an Early Exit

Risk-Reward is a factor, which every successful trader takes care of. Before choosing a chart to take an entry, the first thing that is to be considered is the trend

Risk-Reward is a factor, which every successful trader takes care of. Before choosing a chart to take an entry, the first thing that is to be considered is the trend

Risk-Reward is a factor, which every successful trader takes care of. Before choosing a chart to take an entry, the first thing that is to be considered is the trend, then the risk-reward factor. Once we have set our Take Profit and Stop Loss level, we shall leave the entry either to hit the Stop Loss or the Profit Target. However, today, we are going to demonstrate an example of an early exit.

This is an H4 chart. The chart shows that the price has found its support as well as a resistance zone. After having a final rejection, it makes a move towards the downside. Then, it heads towards the North now (see the next image). Another rejection and bearish reversal candle at the resistance zone may produce a short entry.

The last H4 candle is bullish. However, the candle closes within the resistance zone. It may go either way. The buyers may get an upside breakout; the sellers may get a bearish reversal. Let us proceed to find out what happens next.

In the above chart, we can see one good-looking bearish Marubozu candle. The candle suggests that the sellers may wait for consolidation and downside breakout to take a short entry. The candle forms at a Double Top resistance as well. The price may consolidate around the neckline level.

As expected, the price starts having correction around the neckline level. It needs to find its resistance and produce an H4 bearish reversal candle along with a breakout at the neckline.

Here it comes. The last candle engulfs all the candles by closing below the neckline. An entry may be triggered right after the candle closes. The price has enough space to travel down to the red-marked line, which allows an excellent risk-reward. However, there is a support level in between, that may hold the price for a while.

The price heads towards that level with good bearish momentum. The way it has been going, it may hit the red-marked level within four/five H4 candles. This means one more trading day may be required to hit the original Take-Profit level.

The in-between level is a vital level, which produces the H4 bullish reversal candle. The price has reacted several times at that level earlier. Usually, we must stick with our original Profit-taking target. However, it is also legit to close our entry right after the last candle closes. A question may be raised “why do we close our entry here?”

Reasons for Early Exit

There are two reasons

  1. The support level is significantly strong
  2. The current bar is the last H4 Friday’s candle, which means the market closes once the candle is finished.

The Bottom Line

When using the Weekly and the Daily charts, traders are to let their opened positions to reach the target during the weekend. However, intraday traders should consider closing their floating trade before the week’s end. Mondays often start with a big gap, which may hurt intraday Stop Losses.

 

Categories
Forex Market Analysis

Daily FX Brief, November 26 – Major Trade Setups – Stronger Dollar Rules the Market

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6 in November (46.4 expected, 45.9 in October), while Services PMI declined to 51.5 (52.4 expected) from 52.2.

The sentiment was lifted after Chinese President Xi Jinping called for Beijing and Washington to strengthen communications.

Regarding U.S. economic data, the Markit U.S. Manufacturing Purchasing Managers’ Index (preliminary reading) posted 52.2 in November (51.4 expected, 51.3 in October). The University of Michigan Consumer Sentiment Index (final reading) came in at 96.8 (95.7 expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

EUR/USD – Daily Analysis

The EUR/USD currency pair looking flat and consolidates in the narrow range of 1.1012 / 1.1016. Looking forward, this pair will likely hit the 4-day winning rally mainly due to the hints came regarding a rate cut from the Federal Reserve President Jerome Powell on Monday that interest rates are unlikely to increase anytime soon.

Notably, Powell’s comments indicate the Federal Reserve is likely to hold rates steady for some time until the inflation spikes well above 2 percent.

Therefore, the markets will likely offer the greenback and supporting the EUR/USD currency pairs to hit the bullish level for the first time after November 19. As we know, the currency pair found oo the bearish track yesterday to confirm the 4th-consecutive daily decline.

While Powell’s comments may weigh over the U.S. dollar, the upside in the common currency looks limited, courtesy of weaker Eurozone and German PMIs released last Friday.

Whereas on the other hand, the Federal Reserve President Jerome Powell’s comments could leave the pressure on the greenback, the bullish move in the EUR currency looks limited in the wake of weaker Eurozone and the German PMIs released last Friday.

At the Sino-US front, the report came that the United States and China have reached on the solving trade deal and reduced the risk appetite sentiment in the market. That is visible from the flat action in the Chinese Yuan and the Australian dollar currency. Whereas, the futures on the S&P 500 are also trading in a sideways manner. 

    

Daily Support and Resistance

S3 1.1036

S2 1.1056

S1 1.1067

Pivot Point 1.1076

R1 1.1087

R2 1.1095

R3 1.1115

EUR/USD– Trading Tips

The EUR/USD traded as we forecast to drop to 1.1010 level after forming a bearish hammer candle during the previous week. For the moment, the EUR/USD is trading at 1.1020 level and has developed a bullish engulfing pattern on the 2-hour chart. It’s suggesting strong chances of a bullish reversal until 1.1040 and 1.1060 the 38.2% and 61.8% Fibonacci resistance areas. Let’s consider staying bullish above 1.1015 level today to target 1.1060. 

GBP/USD– Daily Analysis

The GBP/USD currency pair sidelined and consolidates in the narrow range near the 1.2900 mainly due to traders takes clues from the trade news and Federal Reserve Chairman Jerome Powell diverting markets attention off from the United Kingdoms matters.

At the Sino-US front, the report came that the official from the United States and China discussed the multiple ways to resolve the trade deal matter over the phone call raised the chances of the phase-1 deal between the world’s biggest nations. Traders are ignoring the rising uncertainty regarding the 2nd-phase deal.

Moreover, the United States Federal Reserve Chairman Jerome Powell crossed wires while delivering the speech at the Providence Chamber of Commerce Annual Meeting in Rhode Island. The Fed avoided giving any fresh hints regarding future monetary policy. By the way, his positive preference for household spending ruled out the negative comments regarding global trade and jobs increase.

As well as, the greenback increases its recent rally, whereas the risk sentiment stays almost positive due to the United States’ 10-year treasury yields and major stock indices.

In the United Kingdom (U.K.), the ruling Conservatives and the opposition parties are at each other after the Tory leader, Boris Johnson, released the party’s announcement during the weekend. Whereas the Labour Party is struggling to detect mistakes in the Tory promises, ordering from National Healthcare System (NHS) to Defence, the Liberal Democrats (LibDems) doubts the Prime Minister (PM) Boris Johnson led to party’s ability to offer smooth Brexit before the Christmas.

There is no significant data and event for decorating the economic calendar, so the traders will keep their eyes on the U.S. catalysts to plan near-term trading bias. Moreover, the 2nd-tier housing and manufacturing data will join Consumer Confidence and speech from the Fed Governor Lael Brainard.

Daily Support and Resistance

S3 1.2651

S2 1.2756

S1 1.2794

Pivot Point 1.2862

R1 1.29

R2 1.2967

R3 1.3073

GBP/USD– Trading Tips

On Tuesday, the GBP/USD has opened higher to 1.2865 following a massive fall to 1.2822 on Friday, which would yield consolidation ahead of another bearish wave from 1.2985 extends to 1.2775. Lets us reckon Nov’s low of 1.2769 as it supports the GBP/USD around the same level if 1.2825 level gets violated. Consider staying bearish below 1.2875 level today to target 1.2825 

 

USD/JPY – Daily Analysis

The USD/JPY closed at 108.917 after placing a high of 108.975 and a low of 108.596. Overall the movement for USD/JPY remained Bullish that day.

China said on Sunday that it would seek to improve protections for intellectual property rights, including raising the upper limits for compensation for rights violations. 

China rolled out plans to strengthen its rules on copyrights, patents, and trademarks. This subject has been one core sticking point in more than a year of trade negotiations with the United States.

It was reported that by 2022, China would be making progress in issues that have affected intellectual property rights enforcement, such as low compensation, high costs, and the difficulty of proof. And that a better system of protection should be placed by 2025.

The rules around Intellectual property rights have been a major complaint against China and have been boosting the dispute between the most significant economies from the year. It was reported by US International trade Administration in 2018 that the estimated Intellectual Property theft has cost American businesses up to $600 billion a year.

The unauthorized access to a wide range of commercially valuable business information, technical data, trade secrets, and proprietary internal communications by the Chinese Government has been a burden on US commerce. In response to this, the need to address intellectual property rules came out against China by Trump administration, which led to increased tariffs on thousands of products and cast uncertainty on business activity across the globe.


Daily Support and Resistance

R3: 109.38

R2: 109

R1: 108.77

Pivot Point 108.61

S1: 108.39

S2: 108.23

S3: 107.84

USD/JPY – Trading Tips

The USD/JPY is trading at 108.700, and it has just violated the triple top resistance area of 108.600. The closings of bullish candles above 108.600 level are extending support to the safe-haven currency USD/JPY. With this, the market opens further room for buying until 109.090 for the USD/JPY pair. Besides, the MACD and RSI are still holding in the bullish zone. Consider taking buying trades over 108.650 to target 109 today. 

All the best!

Categories
Forex Basic Strategies Forex Daily Topic

The Case for Average True Range-based Stop-loss Settings

Most traders are taught to use stop-losses based on critical levels. The basic idea is to spot invalidation levels based on previous low or high. The assumption is that by

Most traders are taught to use stop-losses based on critical levels. The basic idea is to spot invalidation levels based on previous low or high. The assumption is that by

Most traders are taught to use stop-losses based on critical levels. The basic idea is to spot invalidation levels based on previous low or high. The assumption is that by putting the stop a few pips below or above a support/resistance level will be enough to ensure the right trade will not be stopped out and just bad trades will be taken away.

The problem with that is that all participants in the market, including institutional traders, can see these levels. Institutional traders have lots of cash to play with, so they can push the price down to take all the buy-stop (or sell-stop) orders they see in their price book.

Key-level-based Stops

In the following example, we see the EUR(USD making a breakout after failing to break the previous high, on high volume. A perfect setup for a short trade. We then see the price moving down and then retracing and heading up to our stop-loss. We have been cautious and set it above the last top made on the 6th of November.

Nevertheless, the price kept moving inexorably up until the stop was taken. This is market manipulation at the highest level by institutions. Institutions have advanced tools to observe the depth of the order book, so they know the place and amount of the stops. Also, they have the liquidity necessary to move up the market, take all the liquidity at excellent prices, then continue south.

Chart 1 – EURUSD Key-level-Based Stop-loss placement

 

ATR-Based stops

If we look at the next chart, we see the same asset with the Average True Range indicator added. For this kind of stop-setting strategy, we need to detect the short term range. Therefore, we use a period of five for the ATR indicator. Next, we look at the peak set by the latest impulsive candlestick, which happened ten bars ago, 0.00168, which is about 17 pips. This figure gives us the expected 4-hour price movement for the current market volatility. The usual is to protect us against two times this figure, at least. In this case, we would need to move the stop-loss level 34 pips away from the entry point.

Chart 1 – EURUSD ATR-Based Stop-loss placement

It is wise to keep statistics of the ideal ATR multiplier, because as the number increases, it cuts our position size for the same dollar-risk amount, and also it reduces our Reward-to-risk ratio.

John Sweeney developed the general method of stop-loss placement. He called it the Maximum Adverse Execution method. The theory of it has been already described in our article Maximum Adverse Excursion, so we are not going to repeat ourselves here. Using  MAE delivers statistical-significant and tamper-proof stops, but it is a bit cumbersome. The use of ATR Stops is a simpler and second-best option instead of the foreseeable key-level-based stops.

 

 

Categories
Forex Market Analysis

USD/CAD Completes 50% Retracement – Investor’s Eye Triple Top! 

The USD/CAD closed at 1.32993 after placing a high of 1.33014 and a low of 1.32542. Overall the movement of pair remained Bullish that day.

At 18:30 GMT, the

The USD/CAD closed at 1.32993 after placing a high of 1.33014 and a low of 1.32542. Overall the movement of pair remained Bullish that day.

At 18:30 GMT, the

The USD/CAD closed at 1.32993 after placing a high of 1.33014 and a low of 1.32542. Overall the movement of pair remained Bullish that day.

At 18:30 GMT, the Core Retail Sales from Canada came in favor of Canadian Dollar as 0.2% against the expectations of -0.1%, and the Retail Sales also supported the Loonie when came in as -0.1% against the expectations of -0.3%.

The Stronger than expected Retail Sales & Core Retail Sales data from Canada gave the impression of a robust Canadian economy in this time of global slowdown. The stronger Canadian Dollar pushed USD/CAD prices to the low of 1.32524 on Friday.

However, the pair USD/CAD got support from Strong US Dollar on Friday after the release of PMI from the United States. At 19:45 GMT, the Flash Manufacturing PMI of the United States showed an increase to 52.2 from the expectations of 51.5 for November. The Flash Services PMI was also increased to 51.6 for November from October’s 50.6. 

Stronger than expected PMI was very beneficial in raising the dropped USD/CAD on Friday. However, the upward trend for the pair continued and was further supported when the Consumer confidence from the University of Michigan was seen as favoring the USD. At 20:00 GMT, the Revised UoM Consumer Confidence Sentiment also raised to 96.8 from the expectations of 95.8.

The Crude Oil prices on Friday also dropped due to increased selling pressure by profit-taking activities of the traders who bought Crude Oil after the news of OPEC cut extension on Thursday. The fall in crude oil prices pressed the Commodity-linked Loonie, and hence, USD/CAD was further raised to place a high of 1.33014 at the ending day of the week.


USD/CAD – Daily Technical Levels

Support Resistance 

1.3269     1.3318

1.3237     1.3335

1.3187     1.3385

Pivot Point 1.3286

The commodity currency USD/CAD has completed 50% Fibonacci retracement at 1.3258. On the 2 hour graph, the pair has closed bullish engulfing candle, which is signaling bullish bias among traders. 

For the moment, the USD/CAD is facing strong support at 1.3290, along with a resistance at 1.3325. At the same time, the pair is also trading in a bullish channel, which is keeping the USD/CAD trading sentiment bullish.  

Consider staying bullish above 1.3286 with a stop loss below 1.3250 and take profit around 1.3325. All the best! </span

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Forex Videos

How To Trade Ranging Markets – Maximise Your Forex Profits

https://youtu.be/jSte235_pCs

 
Trading Ranging Markets
A range-bound market is one in which price action bounces between a specific high and a specific low on a technical chart. The high

https://youtu.be/jSte235_pCs

 
Trading Ranging Markets
A range-bound market is one in which price action bounces between a specific high and a specific low on a technical chart. The high

 

Trading Ranging Markets

A range-bound market is one in which price action bounces between a specific high and a specific low on a technical chart. The high acts as a major resistance level and which is defined by at least two attempts to breach a certain exchange rate, and where this has failed and then price action goes on to fail during subsequent attempts.

The opposite applies to a specific low, which acts as a level of support, and whereby at least two attempts have been made to breach this level and where both attempts have failed, and where subsequent attempts have also failed. Price action then continues to range between such highs and lows.

Example A


Example A is a 1-hour chart of the EURUSD pair between 16th to the 22 August 2019 and where price action, as denoted by our red and green candlesticks, bounces between the two levels of support and resistance.

Example B

In example B, we have added eight positions of interest to traders and where price action came very close to our support and resistance levels on five occasions and where the levels were temporarily breached on three occasions at positions 4, 8, and 9, only to be reversed shortly after.

The price action range is approximately 42 pips from the high to the low. The consecutive amount of pips that could have been gained by selling and buying between the high and low equals 245 pips. This is a considerable amount.
This is a classic example of a range-bound – or sideways trading – market during this 6-day trading period. Traders are always looking to reduce risks from their trade setups, and therefore it makes sense to try and establish range-bound markets, because these offer an extra layer of security due to the support and resistance lines which, when established, act as an extra visual layer of comfort.

These levels of support and resistance usually occur after a large price action move and where the price is effectively consolidating because traders have no real ideas as to the future direction of the exchange rate of a particular currency pair. This can also happen between periods of economic data releases, or, while traders wait for events such as interest rate decisions, or forward guidance on monetary policy to be announced by the respective governments.
Another thing to consider is that the Forex market never trades in a linear fashion, that is to say, that it does not move in straight lines. Market performance usually coincides with current daily news events and where this causes volatility and change in price action, which leads to short price action shocks. And where these moves typically spend a lot of time retracing, and this is usually due to traders considering price action to be overbought or oversold within the various timeframes.
Markets do not necessarily range in a horizontal fashion; they can also range in upwards or downwards trends as well.

Example C

Example C is a one hour time frame of the EURUSD pair, and after a difficult to decipher price action movement to the left of the image, at position A and B we have the beginnings of a downward range, or trend, that would have offered up to 200 pips to traders who spotted the opportunity.

Example D

In example D, a range-bound price action is confirmed, and levels of support and resistance are identified at position A, B, C, and D, and therefore should price action continues below the support line at position 1 – where we might have bought the pair, or higher than our resistance line at position 2, where we might have gone short, we would then have confirmation that the trend had finished. However, because we have placed our trend lines on the chart, we can place tight stop losses a few pips above or below our lines in order to reduce risk.
And so, if you are looking to trade range bound markets, make sure that your time frame has established at least two attempts of support and resistance and then pick your moment carefully to buy from support levels and sell from areas of resistance.

Always be mindful that range-bound price action does not go on forever, traders will be sitting on the sidelines waiting for the price to breach support and resistance areas and where extra volatility can creep into the market while traders trade away from them.

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Forex Market Analysis

USD/CAD Completes 38.2% Fibo Retracement – Retail Sales Surpries!

The USD/CAD closed at 1.32846 after placing a high of 1.33249 and a low of 1.32694. Overall the trend for USD/CAD remained Bearish that day. Last month, the Central Bank

The USD/CAD closed at 1.32846 after placing a high of 1.33249 and a low of 1.32694. Overall the trend for USD/CAD remained Bearish that day. Last month, the Central Bank

The USD/CAD closed at 1.32846 after placing a high of 1.33249 and a low of 1.32694. Overall the trend for USD/CAD remained Bearish that day. Last month, the Central Bank of Canada held its Interest rates at 1.75% as expected and left the door open to a potential cut in later months. The Bank of Canada has not changed its monetary policy since October 2018, even its counterpart Banks, including the Federal Reserve of United States, has lowered its interest rates.

On Thursday, Stephen Poloz, the Governor of Central Bank of Canada, said that Canada’s monetary conditions were about right in the current economic situation, which has been challenged throughout by global trade tensions. He added that the central bank of Canada was watching whether the trade uncertainties affect the confidence of the economy in order to decide its future plans. In his views, the monetary conditions were about right in given situations.

He also compared the Canadian economic state with American and said that Federal Reserve cut its rates three times and was now down to where the Canadian rates were. He further added that Bank of Canada was concerned that the Canadian economy relies heavily on exports, and the global trade disputes, including the US-China trade war, were affecting it.

Stephen Poloz also mentioned about the new models that Bank of Canada was built on understanding the significant consequences climate change could impose on financial stability. The positive comments about the Canadian economy from Poloz gave strength to the Canadian Dollar and weighed on USD/CAD prices on Thursday.
On Data front, the ADP Non-Farm Employment change from Canada came in as -22.6K against the previous 25.7K.

Furthermore, the Crude Oil WTI prices rose on Thursday amid the hopes of OPEC cut extension and supported the rising Commodity Linked Currency – Loonie, which added in the Bearish trend of USD/CAD.

The downward trend of USD/CAD was also supported by the weak macroeconomic data from the American side on Thursday. At 18:30 GMT, the US Unemployment Claims for this week exceeded the expectations of 215K and came in as 227K and gave pressure to US dollars. At 20:00 GMT, the CB Leading Index came in as -0.1%, which was as expected. The Existing Home Sales also gave pressure to US Dollars when it came in as 5.46M against the expectations of 5.49M.

Besides, the Canadian retail sales data has just come out, and it may drive sell-off in the USD/CAD pair in the wake of optimistic data. Retail sales surged by 0.2% vs. a drop of 0.1% during the previous month.


USD/CAD- Daily Technical Levels
Support Resistance
1.326 1.3315
1.3237 1.3348
1.3182 1.3403
Pivot Point 1.3293

Technically, the USD/CAD has a complete 38.2% retracement at 1.3274, but the MACD histogram is holding below 0 levels suggesting further selling bias. The bearish breakout pattern can trigger a sell-off until 50% and 61.8% Fibo level of 1.3260 and 1.3240 level. Let’s consider staying bearish under .13293 level today. All the best!

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Forex Market Analysis

Gold’s Bullish Channel In Test – Can We See a Breakout?

On Thursday, the gold prices y eased from the last session’s two-week high after a report that China has invited top U.S. negotiators for a new round of face-to-face talks

On Thursday, the gold prices y eased from the last session’s two-week high after a report that China has invited top U.S. negotiators for a new round of face-to-face talks

On Thursday, the gold prices y eased from the last session’s two-week high after a report that China has invited top U.S. negotiators for a new round of face-to-face talks, and is seeking to reach a primary trade treaty with the United States.

Safe-haven demand is also dominating the market as it was further disturbed after the U.S. Senate passed a bill against China and in favor of Hong Kong on Wednesday. Both the U.S. House and Senate signed the Bill via a veto-proof majority. 

According to the act, annual certification of Hong Kong’s autonomy would be required, and punishment will be imposed on Beijing against suppressing protestors. China demanded the United States to stop interfering in its internal affairs and said that it would retaliate.

Later, on Wednesday, FOMC October’s Meeting minutes were released and showed that there would not be any further rate cut this year. 

The holding of monetary policy and rate cuts by federal reserve was already expected, so it didn’t make much impact on the precious metal gold. 

Minutes revealed that most officials of Federal Reserve were against the 4th rate cut this year. Some officials supported rate cut but also said that it was a close call. 

Officials were concerned that some banks had decreased the capital buffers when they should be rising. Minutes also revealed that risks to the economic outlook remained tilted to the downside. Many officials said that rate cut was warranted due to global weaknesses and trade uncertainty.


XAU/USD – Technical Levels

Support    Resistance 

1,465.41    1,478.36

1,459.2      1,485.1

1,446.25    1,498.05

Key Trading Level: 1,472.15

On the technical side, gold prices are trading within a bullish channel, which is supporting the XAU/USD above 1,466 level. The MACD and RSI are holding below 0 and 50, respectively, suggesting changes of a bearish breakout. If this happens, gold prices may drop further until the 1,456 level. Therefore, consider taking sell positions below 1,465 level today. 
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Forex Basics Forex Daily Topic

Using Trailing Stop: An Art to Be Learned by Traders

Using a trailing stop is a way to lock a profit in trading, at least with some profit. A floating profit trade may not always hit its Take-Profit level. Thus

Using a trailing stop is a way to lock a profit in trading, at least with some profit. A floating profit trade may not always hit its Take-Profit level. Thus

Using a trailing stop is a way to lock a profit in trading, at least with some profit. A floating profit trade may not always hit its Take-Profit level. Thus, traders use Trailing Stop to lock-in some profits and let it run to hit the target. Otherwise, some trades may result in a loss instead.

In today’s lesson, we are going to demonstrate an example of that.

The price heads towards the North with good bullish momentum. The buyers are to wait for price correction and bullish reversal candle to go long on the pair. Let us proceed to the next chart to find more about the correction.

The correction looks very bearish. However, a flipped support level holds the price. Thus, it is going to be an interesting battle between the bull and the bear. Let us find out who wins. Does it make a downside breakout or a bullish reversal candle?

The chart produces a bullish reversal candle. We can see that this is an Inside Bar, which is the weakest reversal candle. A flipped support creates a bullish reversal candle but does not make any breakout. The buyers are to flip over to the trigger chart to get consolidation and breakout to go long on this. This is the daily chart. Let us flip over to the H4 chart.

The H4 chart looks suitable for the buyers. The level of support produces a bullish engulfing candle. It has started the price correction. An upside breakout from a good level of support is the signal to trigger a long entry.

The price goes upward and consolidates. Upon finding support, the last candle breaches the level of resistance. Setting Stop Loss below the level of support, an entry may be triggered right after the last candle closes. The Take Profit shall be placed at the highest high of the previous bearish wave.

The price continues to go towards the upside for a while. It has started having consolidation. The price has found its support. An upside breakout is to push the price towards the North further. On the other hand, a downside breakout may push the price towards the South and even change the whole equation. Thus, the buyers are to move their Stop Loss. Have a look at the chart below.

The buyers shall move their Stop Loss below the level of support and hope it makes another upside breakout to hit the Take Profit. Let us find out what happens next.

This is what Forex trading is all about. You never know what exactly happens next. The price comes down. It would hit the Stop-Loss, where it was set at the very outset. By using Trailing Stop, the buyers have made some profit. Otherwise, they would have to encounter some loss.

The Bottom Line

Using Trailing Stop is an art. It needs a lot of practice to be master at it. Without knowing how to use it properly, it may hurt a trader instead. Since it is an important trading feature to save us from encountering a loss with a profit trade, a trader must study/work hard on this.

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Forex Market Analysis

Gold’s Ascending Triangle Plays – Is It Good Time to Buy?

On Tuesday, gold slid erasing profits from 1,470 t0 1,464 level earlier in the session, as a temporary respite from Washington for China’s Huawei increased confidence for a

On Tuesday, gold slid erasing profits from 1,470 t0 1,464 level earlier in the session, as a temporary respite from Washington for China’s Huawei increased confidence for a

On Tuesday, gold slid erasing profits from 1,470 t0 1,464 level earlier in the session, as a temporary respite from Washington for China’s Huawei increased confidence for a trade agreement between the nations and increased risk sentiment.

The yellow-metal prices dropped during the last week mainly due to the Commerce Secretary Wilbur Ross and White Hosue’s economic adviser Larry Kudlow hinting that the United States and China were close to signing the deal. That sent the three major stocks indexes to record highs on Wall Street.

On the other hand, Donald Trump met with Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin at the White House overnight to discuss the economy and the greenback weakness.

Powell’s remarks were consonant with his statements at his congressional hearings last week the Fed said in a statement released after the meeting. In contrast, the United States President Donald Trump said the meeting was “very good.”

Risk appetite was shaken due to the news that Trump and Fed Chairman Powell had met to discuss the tendency of the dollar. There were rumors of a CNBC report that Chinese officials were involved over prior comments concerning tariffs from Trump.


XAU/USD – Daily Technical Levels

Support Resistance 

1,460.54    1,478.16

1,449.67    1,484.91

1,432.05    1,502.53

Pivot Point 1,467.29

Gold is trading at 1,468 level, bouncing off above 1,464 support level. On the 4 hour timeframe, it has formed an ascending triangle pattern, which is extending its resistance around 1,474. While the bullish trendline is likely to support the pair around 1,464 level. 

The recent bullish closing above 1,464 level is suggesting the market to retrace back upward until 1,472 level. While on the flip side, a bearish breakout of 1,464 can lead gold prices towards 1,456.

All the best!

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Forex Market Analysis

Gold’s Bullish Channel Supports – U.S. China Sentiments Remains Mixed!

On Friday, gold prices declined the demand for safe-haven assets fell remarks from White House economic adviser Larry Kudlow that the United States is pretty close to settling an interim

On Friday, gold prices declined the demand for safe-haven assets fell remarks from White House economic adviser Larry Kudlow that the United States is pretty close to settling an interim

On Friday, gold prices declined the demand for safe-haven assets fell remarks from White House economic adviser Larry Kudlow that the United States is pretty close to settling an interim trade agreement with China.

Fresh certainties regarding the United States and China trade deal returned after the goodwill gestures by the Dragon nation as China lifts the restrictions on the United States poultry imports. Additionally, the headlines of the restart trade talks later on the day also improve the risk-on market.

At the Kudlow front, the latest comments from the White House Economic Adviser Kudlow announce that we are very close to getting the trade deal with China, so in the consequences, the bounce-back came in the U.S. Treasury yields and S&P 500 futures.


XAU/USD – Daily Technical Levels
Support Resistance
1,465.42    1,476.06
1,459.45    1,480.73
1,448.81    1,491.37
Pivot Point 1,470.09

On the 2 hour chart, the yellow metal gold is trading in a bullish channel, which is supporting it around 1,461 level along with a resistance level of 1,473. The new 2-hour candle is bullish marabou, which signals the chances of a bullish trend in gold.

The leading indicators, such as MACD and RSI, are still trading below 0 and 50 level, supporting the bearish bias in gold. With that being said, gold prices may drop further until 1,452 level of it manages to give us closing below 1,460 level.

Likewise, the bullish breakout of 1,473 resistance opens further room for buying until 1,479.

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Forex Market Analysis

Gold’s Bearish Channel Breakout Drives Bulls – What’s Next?

 

On Thursday, the precious metal gold surged to trade around 1,468 level extending gains to a third session, as soft Chinese figures and risk about whether Beijing and

 

On Thursday, the precious metal gold surged to trade around 1,468 level extending gains to a third session, as soft Chinese figures and risk about whether Beijing and

 

On Thursday, the precious metal gold surged to trade around 1,468 level extending gains to a third session, as soft Chinese figures and risk about whether Beijing and Washington will strike a trade agreement anytime soon depressed demand for riskier assets.

China and the United States are enduring “in-depth” talks on a first-phase trade deal, and cutting tariffs is a crucial requirement for settling, the Chinese commerce ministry stated.

The report came from the Wall Street Journal that the United States and China hit a snag over farm purchases. Notably, President Trump recently said that China committed to buying up to $50 billion in U.S. soybeans, pork, and other agricultural products as part of a phase one trade agreement.

However, China is unwilling to quantify its farm purchases now, as in result, instantly activated a risk-off sentiment in the American markets that destroyed the Wall Street party.

XAU/USD – Daily Technical Levels

Support     Resistance
1,458.56      1,467.83
1,453.59      1,472.13
1,444.32      1,481.4
Pivot Point 1,462.86

Gold has crossed over a triple top resistance level of 1,466. CLosing of the bullish candle above this level is suggesting the bullish trend is still strong. While the MACD and RSI are also supporting the buying trend in gold.

At the moment, gold has immediate support around 1,466 and above this, gold has the potential to target 1,472 and 1,479. Let’s consider staying bullish above 1,466 today. All the best!

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Forex Basics Forex Daily Topic

Stop Loss: An Art to be Learned Well by Traders

Setting Take Profit and Stop loss in the right areas are essential factors in trading. A trader does not survive in the market by placing Stop Loss and Take Profit

Setting Take Profit and Stop loss in the right areas are essential factors in trading. A trader does not survive in the market by placing Stop Loss and Take Profit

Setting Take Profit and Stop loss in the right areas are essential factors in trading. A trader does not survive in the market by placing Stop Loss and Take Profit at the wrong places. In today’s lesson, we are going to demonstrate an example of an entry with the level of Stop Loss and Take Profit.

This is a daily chart. The price heads towards the North with good bullish momentum. The buyers are to look for long opportunities at the pullback. Let us wait for the price to make a pullback.

The price starts having a downside correction with an Inside Bar. It produces two more candles that are bearish. After that, it forms a Spinning Top right at a flipped support. This is a bullish reversal candle but not a strong one. A breakout at the top of the Spinning Top attracts the minor charts’ buyers to go long on the pair. However, major charts’ traders may want to wait for a stronger daily bullish reversal candle.

The next candle comes out as an Engulfing candle. This reversal candle attracts more traders to look for long opportunities here. Since it has not made an upside breakout, thus, to take an entry, traders shall flip over to the H4 chart.

This is the H4 chart. The price has a rejection at the red marked level on the daily chart. Thus, this is the level where the price may find its resistance on the H4 chart. This shall be the level to count in setting Take Profit. The H4 chart shows that the price starts having a pullback. Things are getting better for the buyers.

Let us draw the resistance. If the price consolidates and makes a breakout at the black marked level, a long entry may be triggered. However, the buyers must wait to get the level of support.

Here it comes. A bullish reversal candle forms at a flipped support followed by a breakout candle. A long entry shall be triggered right after the last candle closes. Stop Loss may be placed right below the support where the price forms the bullish reversal candle. Many traders set their stop loss right below the breakout candle. In my experience, this offers a better risk-reward, but it often brings more losing trades.

Have you noticed that the price came back and then headed towards the North? If we had set our Stop Loss right below the breakout candle, our Stop Loss would have been hit. Rather than making some profit, we would make a loss here.

The Bottom Line

Setting Take Profit is important, but setting Stop Loss is more important. In my opinion, it is an art. It needs a lot of practice to be well acquainted with the art of setting Stop Loss as immaculate as it can get.

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Forex Market Analysis

Daily FX Brief, November 13 – Major Trade Setups – Fed Chair Speech In Focus! 

On Wednesday, the global financial markets await the Fed Chair speech along with the CPI (Consumer Price Index) data from the U.K and the U.S. The United States and China

On Wednesday, the global financial markets await the Fed Chair speech along with the CPI (Consumer Price Index) data from the U.K and the U.S. The United States and China

On Wednesday, the global financial markets await the Fed Chair speech along with the CPI (Consumer Price Index) data from the U.K and the U.S. The United States and China trade front, the trade concerns between the United States and China are getting severe, with the Trump administration warned to increase the tariff but not until the deal gets confirmation.

We look for CPI to decline from 1.8% y/y in September to 1.5% in October (mkt 1.6%), in line with the BoE’s forecast from November. Let’s take a more in-depth look at the technical side of the market. 

Economic Events to Watch Today

Let’s took at these fundamentals.

  

EUR/USD – Daily Analysis

The EUR/USD currency pair found on the high range of 1.10 handle, as of now, the pair consolidate in the narrow range around the 1.10 handle because tye buyers await for the key inflation report and Federal Reserve Chair Powells statement for the next move.

As of writing, the currency pair is found slightly supported from the pause in the greenback strength after the United States President Trump’s latest comments failed to offer any detail on the United States and China trade agreement and due to this partial trade deal’s uncertainty increased. The U.S. Dollar index trades flat near the 98.30, consolidating the increase to a 4-week high of 98.42.

On the technical side, the 5-Moving Average barrier at 1.1025 is could to reduce the recovery attempts, whereas the bearish sees the next support around the 1.0950 level. The sub-1.1000 levels could be tested on a likely increase in the U.S. Consumer Price Index (CPI), which is scheduled to release at 1330 GMT.

Daily Support and Resistance    

S3 1.0944

S2 1.0981

S1 1.0995

Pivot Point 1.1017

R1 1.1031

R2 1.1053

R3 1.1089

EUR/USD– Trading Tips

The EUR/USD is trading with a slightly bullish bias since it violated the resistance level of 1.1025. On the 4 hour timeframe, the EUR/USD has formed a bullish engulfing candle, which is signaling chances of further buying in the market. 

For the moment, the EUR/USD is concentrating on a critical trading level of 1.1060, which is probable to hold the EUR/USD bearish below this mark. Below this level, the EUR/USD may gain support at 1.1025 and 1.1000 level today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair found near the 1.2850, notably the lack of significant impetus from the United Kingdom, has recently limited the cable pairs movement, as well as the market traders on the waiting track ahead of the critical data and events. 

After the mixed figures of the British employment details, the GBP/USD currency pair saw another pressure on the United Kingdom Prime Minister Boris Jonhson to release a report regarding the Russian interference in the 2016 Brexit referendum. 

On the United States and China trade front, the trade concerns between the United States and China are getting severe, with the Trump administration warned to increase the tariff but not until the deal gets confirmation.

We look for CPI to decline from 1.8% y/y in September to 1.5% in October (mkt 1.6%), in line with the BoE’s forecast from November MPR. The complete deceleration in inflation is due to energy prices; household energy prices will be affected by the OFGEM cap, while fuel prices may decline a bit on a y/y basis. Stripping out the volatility, we’re looking for core CPI to hold steady at 1.7% y/y (Mkt 1.7%).

Daily Support and Resistance

S3 1.2728

S2 1.2787

S1 1.2816

Pivot Point 1.2845

R1 1.2875

R2 1.2904

R3 1.2962

GBP/USD– Trading Tips

The GBP/USD appears to have broken the bearish trendline resistance of 1.2825 upon the release of optimistic GDP figures. The MACD and RSI have crossed above 0 and 50, respectively, implying the odds of a bullish bias in the GBP/USD. The Cable may find immediate support at 1.2845 level. But the closing of candles above 1.2845 area suggests a strong chance of buying trend continuation. 

Consider taking buying positions above 1.2845 and selling below the same level today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair still consolidates in the bearish range of 109 handles, and traders are found on the waiting track even after the latest updates regarding Hong Kong protests and the United States and China trade deal.

Whereas the intensifying uncertainty between the United States and China trade deal as well as the protest unrest in Hong Kong, keep leaving bearish pressure on the USD/JPY currency pair, the overall hawkish sentiment at the Federal Reserve limits the bearish off-late.

Officials from the United States, including President Donald Trump and White House Economic Adviser Larry Kudlow, just show a willingness to raise the tariff on the Chinese goods if the round-1 talks fail. Moreover, the political also did clear that the existing tariff could reduce but not until the deal gets confirmation.

Market traders are now planning for the Federal Reserve Chairman Jerome Powells statement in front of the Joint Economic Committee, and traders will closely follow Fed speak, whereas the market is also waiting for the October month Consumer Prices Index.

Daily Support and Resistance

S3 108.33

S2 108.7

S1 108.86

Pivot Point 109.07

R1 109.23

R2 109.44

R3 109.81

USD/JPY – Trading Tips

The USD/JPY pair is forming higher’s high and higher’s low pattern on the 4-hour chart, which suggesting bullish bias among traders. The USD/JPY has immediate support at 108.900 and resistance at 109.400. 

The MACD is forming histograms in the bearish zone, but the recent histogram is likely to develop above 0, and it may drive more buying until 109.450 today. 

All the best!

Categories
Forex Market Analysis

Gold Bearish Channel Dominates – U.S. China Trade Issue Trending!

On Tuesday, the precious metal gold prices edged lower as forecasts of resolute trade discussions between the United States and China supported risk desire, while traders pocketed profits ahead of

On Tuesday, the precious metal gold prices edged lower as forecasts of resolute trade discussions between the United States and China supported risk desire, while traders pocketed profits ahead of

On Tuesday, the precious metal gold prices edged lower as forecasts of resolute trade discussions between the United States and China supported risk desire, while traders pocketed profits ahead of further updates.

The precious metal gold also sank 0.2%, to $1,454.20 per ounce as investors moved their funds into the stock markets, the higher-yielding assets these days. Consequently, the global stock indices surged higher on Tuesday as traders anticipated a speech by President Trump on trade policy during the U.S. session.

Investors will be closely following Trump’s speech to have a clear stance on the U.S. China tariff rollover, and the EU auto industry tariffs delay.

EU leaders said Trump was supposed to declare this week he was holding the tariff ruling on cars and auto parts shipped from the European Union probably for another six months. That’s raising anticipations about the president’s speech following in the day about the long-drawn trade war with China.

XAU/USD – Daily Technical Levels

Support Resistance
1,452.53    1,469.27
1,446.03    1,479.51
1,429.29    1,496.25
Pivot Point 1,462.77

Gold is trading in a bearish channel, which is keeping it supported around 1,448 level. It’s also extending resistance at 1,456 area. The bearish channel clearly suggests strong chances of further sell-off in the gold prices.

On the lower side, the bearish breakout of 1,448 level can extend selling further until 1,444 level. But for the bearish breakout, we need a solid reason that we can’t expect after looking at today’s economic calendar.

Therefore, consider staying bearish below 1,456 and bullish above 1,448 to capture choppy trading in gold. All the best!

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Forex Price-Action Strategies

An Engulfing Candle at a Flipped Resistance

An Engulfing candle is a strong bearish reversal candlestick. This makes traders look for trading opportunities. In today’s lesson, we are going to demonstrate an example of how an Engulfing

An Engulfing candle is a strong bearish reversal candlestick. This makes traders look for trading opportunities. In today’s lesson, we are going to demonstrate an example of how an Engulfing

An Engulfing candle is a strong bearish reversal candlestick. This makes traders look for trading opportunities. In today’s lesson, we are going to demonstrate an example of how an Engulfing candle creates an entry. Let us proceed.

This is a daily chart. The price heads towards the downside with good bearish momentum. Traders shall wait for the price to have consolidation or an upside correction followed by a bearish reversal candle or pattern.

The price starts having the correction. It produces a bearish reversal candle after three consecutive bullish candles. The bearish reversal candle is an Inside Bar. This is not a strong bearish reversal candle. However, we still may flip over to the H4 chart (this is a daily chart) and wait for an entry.  The H4 chart does not produce any bearish momentum. Thus, the price goes towards the upside instead. Have a look at the chart below.

This is one strong bullish candle. However, the candle closed within the level, which the price breached earlier. Traders must be patient here to find out what the price does around this level. Does it make an upside breakout or produce a bearish reversal pattern?

It produces a Doji candle right at the flipped resistance followed by an Engulfing candle. This surely attracts traders to keep an eye on the pair to look for short opportunities. The question is, how do we find out entries? When the price is at correction, if we have such a bearish reversal candle at the valuable area, we shall flip over to a minor chart. This is a daily chart. Thus, we shall flip over to the H4 chart. Let us flip over to the H4 chart and find out how that looks.

The H4 chart looks bearish. We are to wait for consolidation and a downside breakout to take a short entry. This is what comes out after a while.

The price produces two bearish candles followed by a bullish one. Any bearish reversal candle breaches the support of the consolidation is the signal to go short here.

This is it. A bearish engulfing candle breaches the support of consolidation. A short entry may be triggered right after the candle closes. Let us find out how the trade looks like in a nutshell.

We may set our Stop Loss above the resistance of consolidation. The Entry-level is very explicit, as it has been explained a bit earlier. We may set our Take Profit at the last lowest low where the price started its correction on the daily chart. Alternatively, we may wait for the price to produce a bullish reversal candle. In this chart, we may come out with our profit right after the last candle (bullish) closes. The choice is yours regarding ‘Take Profit.’ Both have merits and demerits.

The Bottom Line

In the above examples, we have learned what to wait for when to flip over a chart, and on what entry shall be triggered. It does look and sound easy. Trust me. It’s never as easy as it looks when you are to deal with the live market. However, having a lot of practice, and with experience, it surely becomes easier.

Categories
Forex Market Analysis

Daily FX Brief, November 12 – Major Trade Setups – Trump’s Speech Ahead! 

The buck slipped along with the global stock, which plunged on Monday following the U.S. President Donald Trump’s comments during the weekend tore investor confidence that Washington and Beijing would

The buck slipped along with the global stock, which plunged on Monday following the U.S. President Donald Trump’s comments during the weekend tore investor confidence that Washington and Beijing would

The buck slipped along with the global stock, which plunged on Monday following the U.S. President Donald Trump’s comments during the weekend tore investor confidence that Washington and Beijing would immediately reach an agreement to settle their debilitating trade war.

At the Sino-US trade front, the United States and China trade tension flashing continuously, whereas the United States interference in the Hong Kong protests awaits China’s response fro fresh risk-off. The market’s risk-tone continues slowly, with the United States ten-year treasury yields being around 1.92%, with most Asian stocks flashing mixed signals. 

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair consolidates in the narrow range of 1.1030 and 1.1050 due to the greenback continues its recovery rally. As of writing, the pair mostly trades near the 1.10 range during on the day, because of USD strength. As we all well aware, the uncertainty surrounding the United States and China trade deal and Hong Kong’s civil protest worries resurged the demand for safety, so that’s why the market was favoring the U.S. currency.

Whereas, on the EUR-side of the equation, the uncertain result of the Spanish general election combined with Eurozone economic growth worries continues to remain a bearish impact on the common currency.

Markets now traders keenly await the German macro news and some new transparency on the US-China trade front for fresh trading impulse, whereas Trump’s speech scheduled today at 1700 GMT will likely also direct the next moves in the spot.

Daily Support and Resistance  

S3 1.0953

S2 1.0992

S1 1.1006

Pivot Point 1.1031

R1 1.1045

R2 1.107

R3 1.1108

EUR/USD– Trading Tips

The EUR/USD is trading with a slightly bullish bias since it violated the resistance level of 1.1025. On the 4 hour timeframe, the EUR/USD has formed a bullish engulfing candle, which is signaling chances of further buying in the market. 

For the moment, the EUR/USD is concentrating on a critical trading level of 1.1060, which is probable to hold the EUR/USD bearish below this mark. Below this level, the EUR/USD may gain support at 1.1025 and 1.1000 level today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair got limited benefits from the United Kingdoms’ optimism because the pairs await fresh hints from the monthly employment figures whereas taking the buying to 1.2865. As of writing, the GBP/USD currency pair currently trading at 1.2865.

At the Sino-US trade front, the United States and China trade tension flashing continuously, whereas the United States interference in the Hong Kong protests awaits China’s response fro fresh risk-off. The market’s risk-tone continues slowly, with the United States ten-year treasury yields being around 1.92%, with most Asian stocks flashing mixed signals. 

There will likely be a moderate weakness in Claimant Count estimates amid no change in Unemployment Rate and Average Earnings. After the data, the speech from the United States President Donald Trump and Federal Reserve speech will be closely followed to decide the future of the United States and China trade relations and the U.S. Federal Reserve futures moves, respectively.

Daily Support and Resistance   

S3 1.2676

S2 1.2732

S1 1.2754

Pivot Point 1.2789

R1 1.281

R2 1.2845

R3 1.2901

GBP/USD– Trading Tips

The GBP/USD appears to have broken the bearish trendline resistance of 1.2825 upon the release of optimistic GDP figures. The MACD and RSI have crossed above 0 and 50, respectively, implying the odds of a bullish bias in the GBP/USD. 

On the lower side, the GBP/USD may find immediate support at 1.2845 level. But the closing of candles above 1.2845 area suggests strong chance of buying trend continuation. 

Consider taking buying positions above 1.2845 and selling below the same level today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair found on the bullish track and taking buying near the 109.20 on the day, despite the trade tension between the United States and China, and protest in Hong Kong. The greenback strength could be the reason behind the pair’s bullish trend. Notably, the recovery of U.S. bond trading, greenback sent higher.

However, investors broadly avoided the United States’ expectations regarding the tariff roll back from the European Union automobiles and positive comments from the Japanese Economy Minister Yasutoshi Nishimura as well.

Whereas the traders will keep their eyes on trade and Hong Kong worries, as well as the United States President Donald Trump comments from the Economic Club of New York, lunch will also keep under the eyes. The United States President is broadly expected to clarify the much needed United States and China trade relations and the U.S. tariff policy.

Looking forward, Focus will be on Trump’s speech and speeches by the Federal Reserve officials, which is scheduled to speak later on Friday, in the absence of relevant macro data out of the U.S. President is scheduled to speak at the Economic Club of New York around 1700 GMT.

Daily Support and Resistance   

S3 108.48

S2 108.88

S1 109.08

Pivot Point 109.28

R1 109.47

R2 109.68

R3 110.07

USD/JPY – Trading Tips

On the 4 hour chart, the USD/JPY pair is forming higher’s high and higher’s low pattern, which suggesting bullish bias among traders. The USD/JPY has immediate support at 108.900 and resistance at 109.400. 

The MACD is forming histograms in the bearish zone, but the recent histogram is likely to develop above 0, and it may drive more buying until 109.450 today. 

All the best!

Categories
Forex Market Analysis

Daily FX Brief, November 11 – Major Trade Setups – U.S. China Trade War In Play!

The U.S. dollar was marginally softer against the single currency euro and safe-haven currency Japanese yen, following some traders caution that the agreement could still unravel. The dollar index traded

The U.S. dollar was marginally softer against the single currency euro and safe-haven currency Japanese yen, following some traders caution that the agreement could still unravel. The dollar index traded

The U.S. dollar was marginally softer against the single currency euro and safe-haven currency Japanese yen, following some traders caution that the agreement could still unravel. The dollar index traded at $1.1020 versus the shared currency euro and 109.23 against the Japanese yen. 

Whereas the Chinese yuan was marginally lower in the offshore business, but still on the strong opponent of 7-per-dollar at 6.9892 in foreign trade. 

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair stops its further declining streak after a 5-day losing trend. As of writing, the pair is currently trading above the 1.1000, having hit the 3-weeks low of 1.1017 last Friday. Notably, the EUR/USD pair remains cautious, mainly due to the greenback strength.

As of now, the pair is fluctuating up and down between a 10-pips narrow range during the Monday. The markets await fresh clues regarding the United States and China trade relations for a new direction, as well as the big economic releases from both sides of Atlantic the week ahead for the next direction. The United States docket discusses the releases of the CPI data and Federal Reserve Chairman Powell’s testimony, whereas the EUR calendar headlines the Eurozone growth figures.

Looking ahead, the pair could keep its range trade steady mainly due to the holiday in the United States, the markets of the United States closed in the wake of Veterans Day. However, the greenback will continue its progress due to fresh trade-related development.

Daily Support and Resistance

S3 1.0953

S2 1.0992

S1 1.1006

Pivot Point 1.1031

R1 1.1045

R2 1.107

R3 1.1108

EUR/USD– Trading Tips

The EUR/USD is consolidating with a bearish bias since it broke the bullish trendline support around the 1.1025 area. On the 4 hour timeframe, the pair has formed strong bearish channels, which are signaling chances of further selling in the market. 

At the moment, the EUR/USD is focusing on a crucial trading level of 1.1060 level, which is likely to keep the EUR/USD bearish under this. Below this level, the EUR/USD may gain support at 1.1025 and 1.1000 level today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair hit the 3-week low mainly due to Moodys cut the United Kingdom outlook unfavorable. By the way, the pair stop its further bearish movement because of UK GDP. As of writing, the GBP/USD currency pair currently trading around 1.2793.

The U.S. Dollar continues its recovery rally due to the global investors try safety and cautious in the wake of intensifying uncertainty surrounding the United States and China trade deal and protests in Honk Kong. Moreover, the reason behind the greenback safe-haven demand could be the geopolitical tension in the Middle East.

On the other hand, Chancellor’s defeat to justify the criticism of the opposition Labour party’s spending plan increased the uncertainties regarding the United Kingdom Prime Minister Boris Jonson’s lead during the snap elections, which is scheduled to happen in December.

As of data, the UK GDP is expected to increase to +0.3% from -0.2% on QoQ; the YoY figures might decrease to 1.1% from 1.3%. Moreover, Manufacturing Production could shrink -0.2% against -0.7% prior, whereas Industrial Production could increase to -0.1% from -0.6%.

Daily Support and Resistance

S3 1.2676

S2 1.2732

S1 1.2754

Pivot Point 1.2789

R1 1.281

R2 1.2845

R3 1.2901

GBP/USD– Trading Tips

The GBP/USD seems to have violated the sideways channel following the Bank of England policy decision. The MACD and RSI have crossed below 0 and 50, respectively, suggesting the chances of a bearish trend in the GBP/USD. On the downside, the GBP/USD has closed one of the candles below 1.2785 area, which suggests strong chances of a bearish trend continuation. 

Next support prevails around 1.2750, and the violation of this level can extend sell-off until 1.2685. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair remained on the bullish track and got the additional boost and reached near the multi-month high mainly due to Japan Machinery Orders declined below the expected figures. As of writing, the USD/JPY currency pair currently trading at 109.20 on the day.

Japan’s September month Machinery Orders against market forecasts on MoM and YoY basis. Whereas the monthly numbers dropped below +0.9% expected and -2.4% before -2.9%, yearly numbers seem a bit less negative with +5.1% growth figures against 7.9% consensus and -14.5% earlier readouts.

While looking at the lack of the United States traders from markets, mainly due to the Veterans Day holiday, along with the recent data, US investors have no key event and statistics for publishing on the economic calendar.

Notably, the lowest inflation figures from the United States and the Federal Chairs’ testimony may also force the traders to keep away from the big position before the event.

    

Daily Support and Resistance

S3 108.48

S2 108.88

S1 109.08

Pivot Point 109.28

R1 109.47

R2 109.68

R3 110.07

USD/JPY – Trading Tips

On the technical side, the USD/JPY currency pair had shown the wrong direction to the buyers of the market during the last 48 hours as you know the pair dropped in 48 hours against the buyer’s expectations. The pair closed above the 200-day M.A. on Monday to fall back below the long-term M.A. in the overnight trade. Consider staying bearish below

109.100 today to target 108.850 and 108.700. 

All the best!