Tag: trading

Categories
Forex Options

FX Options Market Combined Volume Expiries for 26 May 2020

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

Thank you for visiting the Forex Academy FX Options market combined volume expiries section. Each day, where available, we will bring you notable maturities in FX Options of amounts of $100 million-plus, and where these large combined maturities at specified currency exchange rates often have a magnetic effect on price action, especially in the hours leading to their maturities, which happens daily at 10.00 AM Eastern time. This is because the big institutional players hedge their positions accordingly. Each option expiry should be considered ‘in-play’ with a good chance of a strike if labelled in red, still in play and a possible strike if labelled in orange and ‘out of play’ and an unlikely strike if labelled in blue, with regard to the likelihood of price action meeting the strike price at maturity.

……………………………………………………………………………………………………………………..

FX option expiries for May 26 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

– EUR/USD: EUR amounts

  • 1.0900 885m
  • 1.0945 732m

The EURUSD pair is caught in an upward trend on our one-hour time frame. Currently pulling back from an overbought position we can expect that the pair will remain bullish during the European and US session. Therefore, both of our maturities remain in play. A slew of US data due out at 1:30 BST, which is before the cut, may have a significant impact on price action.

 

– GBP/USD: GBP amounts        

  • 1.2125 255m

The GBPUSD pair has caught a bid tone having failed to breach the support line. The pair is near an area of previous resistance and may see a pullback before the 10 AM New York cut. However, the maturity at 1.2125 is out of play.

 

– USD/JPY: USD amounts         

  • 107.25 440m
  • 107.90 403m


The USDJPY pair is continuing in its bull trend and the 107.90 Cut is very much in play. The pair is overbought on our one hour chart but seems to be holding up and aside from the US data due out as previously mentioned, the pair should remain bid.

………………………………………………………………………………………………………………

As you can see on the charts we have also plotted the expiration levels at the various exchange rate maturities and we have also labelled in red, orange and blue. Therefore, if you see option expiry exchange rates labelled in red these should be considered in-play, because we believe there is a greater chance of the expiry maturing at these levels based on technical analysis at the time of writing. There is still a lesser possibility of a strike if they are in orange and so these are ‘in-play’ too. However, if we have labelled them in blue, they should be considered ‘not in-play’ and therefore price action would be unlikely to reach these levels, which are often referred to as Strikes, at the time of the 10 AM New York cut.

Our technical analysis is based on exchange rates which may be several hours earlier in the day and may not reflect price action at the time of the maturities. Also, we have not factored in economic data releases or keynote speeches by policymakers, or potential market volatility leading up to the cut.

Although we have added some technical analysis we suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage.

Remember the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 AM Eastern time.

If you want to learn how forex option expiries affect price action in the spot FX market see our educational article by clicking here: https://bit.ly/2VR2Nji

DISCLAIMER: Please note that this information is for educational purposes. Also, the maturities will look more or less likely to become a strike at 10 AM NY time due to exchange rate fluctuations resulting in a different perspective with regard to technical analysis, and also due to upcoming economic data releases for the associated pairs.

Categories
Forex Market Analysis

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

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

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

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

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

Daily Support and Resistance

  • R3 1.1067
  • R2 1.1038
  • R1 1.0994

Pivot Point 1.0965

  • S1 1.092
  • S2 1.0892
  • S3 1.0847

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

Daily Support and Resistance

  • R3 1.232
  • R2 1.2285
  • R1 1.2255

Pivot Point 1.222

  • S1 1.219
  • S2 1.2155
  • S3 1.2124

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

Daily Support and Resistance    

  • R3 108.21
  • R2 108.04
  • R1 107.83

Pivot Point 107.65

  • S1 107.44
  • S2 107.26
  • S3 107.05

USD/JPY – Trading Tips

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

All the best for today! 

Categories
Forex Elliott Wave

Advanced Applications in Wave Analysis – Part 1 of 4

Introduction

Introduction

Introduction

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

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

Impulsive Waves in Action

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

Trending Impulsive Waves

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

Terminal Impulsive Waves.

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

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

Conclusions

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

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

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

Suggested Readings

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

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

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

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

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

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

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

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

What happened in the past 24 hours

Goldman Sachs hosting a conference on crypto 

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

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Signals

Gold Choppy Sessions Continues – Wait for Breakout! 

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

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

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

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

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

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

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

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

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

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


Daily Support and Resistance

S1 1676.16

S2 1702.89

S3 1715.19

Pivot Point 1729.63

R1 1741.93

R2 1756.36

R3 1783.1

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

Categories
Forex Videos

Types For Noobs! How To Apply Our Free Signals & Make Money For Free

https://youtu.be/EWBpjoLl-Q0

https://youtu.be/EWBpjoLl-Q0

 

How to apply Forex Academy trade signals to your own trading account?

Ok, you have seen the Forex Academy signals table and the incredible success our professional Traders are enjoying, and you want to start copying some of the trades onto your own account, but you are a novice trader and a little bit unsure what to do next.

This presentation is designed to assist you with such tasks. Let’s take a look at a couple of examples of how you can go about applying the trades from the signals table on to your own trading account.


Let’s drill down into this pending order for the US dollar CAD trade at the top of the table.

We can presume that you have clicked onto the Method tab to have a look at the traders’ technical analysis and overview; you agreed with the sentiments and decide that you want to take this trade on by applying the price entry, take profit, and stop-loss on to your own trading platform.


The most common trading platform which is offered by the majority of brokers is the Metatrader mt4 platform, and so we assume that you are using this platform, in which case you should open it up and select the US dollar CAD chart. You don’t have to add technical analysis.


Click on the New Order tab, and an order box will pop up onto your screen.


Click onto the symbol drawdown panel to select the US dollar CAD asset.


The price will then change to the current exchange rate for this pair.
If this was an instant execution, you would simply sell-by market or buy the market by clicking on the relevant price paddles, which are colored red and blue.


However, this is a pending order which we need to select from the type of trade drop-down menu.

Let’s quickly remind ourselves of the trade we are copying. this is a Sell-limit pending order of the US dollar Cad pair, with an order to sell the pair at some point in the future with no specified cancellation date at an exchange rate of 1.41526 with a stop loss of 1.42126 and a take profit of
1.40926. This represents Minus 60 pips or plus 60 pips, where the risk to reward has a ratio of 1:1. So for every unit traded in a standard lot of 1.0, which equals 10 units of the base currency traded, you would win or lose $600. Or if traded with a mini lot equal to 0.1 unit of volume you would win or lose $60 and if you were trading in micro-lots of 0.01 units of volume you would win or lose $6


We now take this information and add it to our order box. Firstly you will need to put in the volume of currency you want to trade. Here we have added a volume of 0.10 units, which equates to around about $1 for every pip in movement.
We then complete the stop loss box by entering in the exchange rate 1.42126, the take profit at

1.40926, and then in the pending order section itself, click on the sell limit for the type of pending order. Enter an exchange rate of 1.41526.


Then simply click on the place tab, and if the server accepts your trade, it will be confirmed by three lines popping up on to your chart. One is the sell limit order with the volume you have chosen at the exchange rate at which the trade will be executed if the price reaches it at some certain point. The second will be the level at which the trade will be stopped out should it move against you, and the setup fail. And the third line is the take profit where the trade will close out if price action moves to this exchange rate level should the trade have been opened having gone to plan.


Should the trade you are looking at copying require a different type of pending order this can be found in the order type drop-down box and will include buy limit, sell limit, buy stop and sell stop orders.


Different types of pending orders are buy-limit, where a trader expects that the current exchange rate will fall lower before continuing in an upward trend, In which case he would use a buy limit order to enter a trade at a lower point than the current exchange rate.
Or the trader would use a buy stop order to enter a trade which is above the current exchange rate, and where he or she might use such an order anticipating that an upward trend would continue.


Conversely, a trader would use a sell limit pending order if they thought that the exchange rate was going to move slightly higher before reversing into a downward trend. This provides them with the possibility of gaining some extra pips. Or they use a sell stop order where they presume the exchange rate will move lower than where it is currently.
Other trading platforms have similar trade order systems, and so if you are not using the MT4, you will just need to research a little to find the trade execution setups.

 


To calculate your risk, most platforms, including the MT4 offer a cross-hair feature which you can drag onto your chart and by clicking on the current price exchange rate, or anywhere else, you can drag the cross-hair to any level on your chart, and it will show you the number of pips that you might lose or gain. In this example we can see that should a trade be executed at the current exchange rate the level to the stop loss we have chosen by the introduction of the red line is 127 pips away, and where one pip typically will equate to one US dollar with a volume of 0.10 units traded.

On that basis, if we were to go short on this pair at the current exchange rate with the current stop loss in place, we would have lost $127 should the pair have moved up to our stop loss. We can also simply drag the cross-hair lower to calculate possible winnings in pip amount values too.

Categories
Forex Videos

Elliot Wave Education In Forex – Trading With Confidence!

https://youtu.be/HW64xScAuYI

https://youtu.be/HW64xScAuYI

Elliot Wave Theory

 

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

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

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

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

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

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

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

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

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

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

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

 

Categories
Forex Price Action

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

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

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

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

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

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

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

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

The 15M chart produces a bearish engulfing candle closing within the breakout level. The next candle comes out as a bullish engulfing candle. The H1-15M buyers may trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R.

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

Categories
Crypto Market Analysis

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

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

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

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

OmiseGO took the position of today’s biggest daily gainer, with gains of 65.98%. THETA lost 16.34% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance stayed at the same place since we last reported, with its value currently at 67.05%. This value represents a 0.03% difference to the downside.

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

What happened in the past 24 hours

Kleiman vs. Wright getting heated 

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

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


Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.1785

3: $0.214                                            

 

Categories
Forex Market Analysis

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

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

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

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

Economic Events to Watch Today

 

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Support and Resistance

  • R3 1.1067
  • R2 1.1038
  • R1 1.0994

Pivot Point 1.0965

  • S1 1.092
  • S2 1.0892
  • S3 1.0847

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

Daily Support and Resistance

  • R3 1.232
  • R2 1.2285
  • R1 1.2255

Pivot Point 1.222

  • S1 1.219
  • S2 1.2155
  • S3 1.2124

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

Daily Support and Resistance    

  • R3 108.21
  • R2 108.04
  • R1 107.83

Pivot Point 107.65

  • S1 107.44
  • S2 107.26
  • S3 107.05

USD/JPY – Trading Tips

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

All the best for today! 

Categories
Forex Elliott Wave

Additional Observations in Wave Analysis – Advanced Level

Introduction

Introduction

Introduction

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

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

Corrective Patterns

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

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

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

Triangles

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

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

Impulses

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

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

Conclusions

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

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

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

Suggested Readings

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

Categories
Forex Daily Topic Forex Price Action

The H1-15M Combination Trading in a Bearish Market

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

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

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

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

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

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

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

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

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

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

 

Categories
Forex Market Analysis

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

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

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

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

 

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

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


Daily Support and Resistance

  • R3 1.1097
  • R2 1.1048
  • R1 1.1014

Pivot Point 1.0966

  • S1 1.0932
  • S2 1.0884
  • S3 1.0849

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

Daily Support and Resistance

  • R3 1.2346
  • R2 1.2317
  • R1 1.2279

Pivot Point 1.225

  • S1 1.2211
  • S2 1.2183
  • S3 1.2144

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Support and Resistance    

  • R3 108.57
  • R2 108.28
  • R1 107.91

Pivot Point 107.62

  • S1 107.25
  • S2 106.96
  • S3 106.59

USD/JPY – Trading Tips

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

All the best for today! 

Categories
Crypto Market Analysis

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

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

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

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

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

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

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

What happened in the past 24 hours

Crypto payments on Shopify 

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

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

Honorable mention

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

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Daily Topic Forex Price Action

When a Double Top and an Engulfing Candle Comes Together

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

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

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

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

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

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

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

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

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

Categories
Forex Market Analysis

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

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

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

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

Economic Events to Watch Today 

 

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Support and Resistance

  • R3 1.1089
  • R2 1.1008
  • R1 1.0961

Pivot Point 1.088

  • S1 1.0833
  • S2 1.0752
  • S3 1.0705

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Support and Resistance

  • R3 1.2411
  • R2 1.2319
  • R1 1.2257

Pivot Point 1.2166

  • S1 1.2104
  • S2 1.2013
  • S3 1.195

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Support and Resistance    

  • R3 108.04
  • R2 107.78
  • R1 107.56

Pivot Point 107.3

  • S1 107.09
  • S2 106.82
  • S3 106.61

USD/JPY – Trading Tips

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

Categories
Crypto Market Analysis

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

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

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

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

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

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

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

What happened in the past 24 hours

Bitcoin options market speaks about the BTC price 

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

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Videos

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

https://youtu.be/tDwa_ll_zJc

https://youtu.be/tDwa_ll_zJc

Dow Jones Index – Bull Trap

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


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

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

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

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

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

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


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

Categories
Forex Signals

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

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

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

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

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

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

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


Daily Support and Resistance

S1 1666.87

S2 1704.45

S3 1718.73

Pivot Point 1742.02

R1 1756.3

R2 1779.6

R3 1817.17

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

Categories
Forex Daily Topic Forex Price Action

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

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

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

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

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

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

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

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

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

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

Categories
Forex Market Analysis

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

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

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

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

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

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

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

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

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

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


Daily Support and Resistance

  • R3 1.1089
  • R2 1.1008
  • R1 1.0961

Pivot Point 1.088

  • S1 1.0833
  • S2 1.0752
  • S3 1.0705

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

Daily Support and Resistance

  • R3 1.2411
  • R2 1.2319
  • R1 1.2257

Pivot Point 1.2166

  • S1 1.2104
  • S2 1.2013
  • S3 1.195

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Support and Resistance    

  • R3 108.04
  • R2 107.78
  • R1 107.56

Pivot Point 107.3

  • S1 107.09
  • S2 106.82
  • S3 106.61

USD/JPY – Trading Tips

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

All the best for today! 

Categories
Crypto Market Analysis

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

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

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

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

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

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

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

What happened in the past 24 hours

Bitcoin produced less than 100 blocks in a 24h period

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

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Signals

EUR/AUD Engulfing Pattern at the bottom of the channel

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

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

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

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

Main levels:

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

Reward/Risk: 1.66

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

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

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

 

 

Categories
Crypto Videos

Negative Interest Rates & Bitcoin! Place Your Bets!

https://youtu.be/7acDJRlALhg

https://youtu.be/7acDJRlALhg

Negative Interest Rates and Bitcoin

With US President Donald Trump announcing that he wants to implement negative interest rates, people are starting to think of how that will affect the economy.
A report published by Stack Funds shows that negative interest rates in the US will force market participants to seek alternatives to traditional assets they were investing in before. This could be a great opportunity for both Bitcoin and the cryptocurrency market, as institutions, as well as the retail sector, would have to turn to something more lucrative.

Negative interest rates
It is important to note that there is no single interest rate that is adjusted, but rather many interest rates. The interest rate Stack Funds is talking about is the Federal Funds Rate, an overnight rate at which depository institutions lend their funds to each other in the US.

A negative interest rate is used when a central bank has to boost a weakening economy. When the economy is weak, people (as well as businesses) keep their cash and save up instead of spending it. A negative interest rate is used to encourage spending money, as keeping it in the bank will make you lose it anyways.

Alternatives

When low or negative interest rates are introduced to the economy, it makes investing quite difficult as the yield on every single traditional asset will be drastically lower than before. For that reason, investment managers have to look for alternative investments in order to seek acceptable returns. Bitcoin is surely one of the assets that will pop into the mind of investment managers first.
Even now, the institutional interest in Bitcoin was rising, with many notable people in finance joining the crypto bandwagon.

Categories
Forex Elliott Wave

Additional Basic Rules in Wave Analysis – Advanced Level

Introduction

Introduction

Introduction

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

Points of Tangency in the Guidelines

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

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

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

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

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

Rule of Time

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

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

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

From the figure, we observe that:

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

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

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

Conclusions

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

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

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

Suggested Readings

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

 

Categories
Forex Market Analysis

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

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

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

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

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Support and Resistance

  • S1 1.0673
  • S2 1.0758
  • S3 1.079

Pivot Point 1.0843

  • R1 1.0874
  • R2 1.0928
  • R3 1.1013

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Support and Resistance

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

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Support and Resistance    

  • R3 109.37
  • R2 108.57
  • R1 108.12

Pivot Point 107.33

  • S1 106.88
  • S2 106.09
  • S3 105.64

USD/JPY – Trading Tips

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

Categories
Crypto Market Analysis

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

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

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

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

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

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

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

What happened in the past 24 hours

Robert Kiyosaki bullish on Bitcoin

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

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

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Technical analysis

_______________________________________________________________________

Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.214                                           1: $0.205

2: $0.227                                           2: $0.2

3: $0.235                                            3: $0.19

 

Categories
Forex Fibonacci

Fibonacci Trading: How Fibonacci Levels Give Clues to the Traders

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

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

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

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

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

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

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

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

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

 

Categories
Forex Market Analysis

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

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

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

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

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

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

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

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


Support Resistance
1722.44 1752.94
1703.97 1764.97
1691.94 1783.44
Pivot Point 1734.47

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

Categories
Crypto Market Analysis

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

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

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

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

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

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

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

What happened in the past 24 hours

Visa files a Patent for Digital Currency

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

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $217.6                                            1: $198

2: $225.4                                           2: $193.6

3: $240                                               3: $185

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.205                                           1: $0.2

2: $0.214                                           2: $0.19

3: $0.227                                            3: $0.178

 

Categories
Forex Market Analysis

Safe Haven Gold on Fire – Triangle Pattern Breakout! 

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

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

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

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

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

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


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

Categories
Forex Market Analysis

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

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

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

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

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

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

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

Support Resistance 

1.4032       1.4144

1.3962       1.4186

1.3919       1.4256

Pivot Point 1.4074

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

Categories
Forex Market Analysis

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

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

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

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

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Support and Resistance

  • S1 1.0722
  • S2 1.0783
  • S3 1.0811

Pivot Point 1.0843

  • R1 1.0871
  • R2 1.0904
  • R3 1.0964

EUR/USD– Trading Tips

On Thursday, the EUR/USD price dropped to test the support level of 1.0800, which is extended bu the upward channel. On the chart, the EUR/USD os closing a Doji above upward channel trendline, but at the same time, the 50 EMA and horizontal resistance seems to drive bearish sentiment for the EUR/USD pair. Continuation of selling until 1.0778 level may lead the EUR/USD prices towards 1.07782 level, and below this, the next support is likely to be found around 1.0730. 

GBP/USD – Daily Analysis

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

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

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

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

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

Daily Support and Resistance

  • R3 1.2577
  • R2 1.2508
  • R1 1.2422

Pivot Point 1.2353

  • S1 1.2268
  • S2 1.2198
  • S3 1.2113

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Support and Resistance    

  • R3 109.37
  • R2 108.57
  • R1 108.12

Pivot Point 107.33

  • S1 106.88
  • S2 106.09
  • S3 105.64

USD/JPY – Trading Tips

The USD/JPY traded bearishly to trade below the support level of 107, which marked the 50% Fibonacci retracement level. Currently, the USD/JPY is holding at 106.875, where the 50 EMA is resisting the pair, and it may drop further below the 107 level. At the moment, the 4-hour candle seems to close below 107 support become resistant, and this may drive more selling in the USD/JPY pair. The pair may extend selling until 106.600 level, whereas the closing of buying candles above 107 can trigger bullish bias until 107.50. By the way, bearish bias seems solid today. All the best for today! 

Categories
Forex Basic Strategies

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

Introduction

Introduction

Introduction

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

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

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

Understanding The Bullish & Bearish Pin Bars

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

Bullish Pin Bar Reversal Pattern

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

Bearish Pin Bar Reversal Pattern

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

Trading Strategies

Pairing The Pin Bar candles With Support & Resistance Levels

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

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

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

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

Pin Bar Pattern + Bollinger Bands

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

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

Trading With The Confluence Level

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

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

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

Conclusion

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

Categories
Crypto Market Analysis

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

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

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

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

Crypterium took the position of today’s most prominent daily gainer, with gains of 27.28%. ABBC Coin lost 8.32% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance moved up slightly since we last reported, with its value currently at 67.76%. This value represents a 0.3% difference to the upside.

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

What happened in the past 24 hours

German Neobank offers Bitcoin Accounts with Interest

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

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $198                                               1: $193.6

2: $217.6                                           2: $185

3: $225.4                                            3: $178.65

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.205                                           1: $0.2

2: $0.214                                           2: $0.19

3: $0.227                                            3: $0.178

 

Categories
Forex Market Analysis

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

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

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

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

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

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

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

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

Daily Support and Resistance

  • S1 22.23
  • S2 23.74
  • S3 24.66

Pivot Point 25.25

  • R1 26.16
  • R2 26.75
  • R3 28.26

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

Categories
Forex Signals

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

The idea

The idea

The idea

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

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

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

Main levels:

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

Reward/Risk Ratio: 1.17

Dollar Reward and Risk

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

 

 

Categories
Crypto Videos

Applying The Stock To Flow Model To The Bitcoin Halving

https://youtu.be/xF3BnoFywBc

https://youtu.be/xF3BnoFywBc


Stock to Flow model and Bitcoin Halving

What is the Stock to Flow model?

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

What does Stock to Flow show?

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

Stock to Flow and Bitcoin

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

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

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

Conclusion

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

Categories
Forex Market Analysis

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

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

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

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

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

Daily Support and Resistance  

  • R3 1.0995
  • R2 1.094
  • R1 1.0894

Pivot Point 1.0839

  • S1 1.0793
  • S2 1.0738
  • S3 1.0691

EUR/USD– Trading Tips

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Support and Resistance

  • R3 1.2577
  • R2 1.2508
  • R1 1.2422

Pivot Point 1.2353

  • S1 1.2268
  • S2 1.2198
  • S3 1.2113

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

Daily Support and Resistance    

  • R3 109.37
  • R2 108.57
  • R1 108.12

Pivot Point 107.33

  • S1 106.88
  • S2 106.09
  • S3 105.64

USD/JPY – Trading Tips

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

The MACDis holding in selling , which is supporting the bearish trend in the USD/JPY pair. The violation of an immediate support level may extend selling until 106.600 level. Conversely, the closing of buying candles above 107 can trigger bullish bias until 107.50. By the way, bearish bias seems solid today. All the best for today! 

Categories
Forex Course

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

Introduction

Introduction

Introduction

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

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

How To Trade The Head And Shoulders Pattern?

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

Trading The Bearish Head And Shoulders Pattern

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

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

Trading The Bullish Head And Shoulders Pattern

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

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

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

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

[wp_quiz id=”73064″]
Categories
Forex Price-Action Strategies

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

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

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

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

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

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

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

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

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

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

Categories
Crypto Market Analysis

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

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

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

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

DigiByte took the position of today’s most prominent daily gainer, with gains of 27.28%. Status lost 8.32% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance moved up slightly since we last reported, with its value currently at 67.46%. This value represents a 0.29% difference to the upside.

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

What happened in the past 24 hours

Lightning Network vs. WBTC on the Ethereum network

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

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


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

Key levels to the upside                    Key levels to the downside

1: $193.6                                            1: $185

2: $198                                              2: $178.65

3: $217.6                                            3: $167.8

Ripple

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


Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.178

3: $0.214                                            3: $0.147

 

Categories
Forex Signals

CADJPY triple bounce off the upper linear regression channel boundary

The Setup

The Setup

The Setup

Fig 1 – CADJPY triple bounce off the upper linear regression channel boundary

CADJPY has been obeying a slightly descending linear regression channel. On the 60 min chart, the ± 2 sigma lines are shown in blue, whereas the regression line, is shown in dotted white. In that chart, we can observe that the price has bounced three consecutive times off that line, and now, in its third bounce, it also pierced its 50-hour SMA to the downside.

A trade can be created with an entry at the current price and a target neat the bottom of the channel, for an excellent reward to risk factor. The rationale for this type of trade is the following. On channels like that, the odds of a reversal from a 2 sigma line is high, at least 95% of the time. The issue here is the reversal is strong enough to reach our target? Usually, it is highly likely a movement to touch the mid of the channel, but, since here the channel is descending, the odds of it moving to the bottom is higher. We will follow this trade, though, and adapt our stop-loss level and take profit as we see how the bearish momentum evolves.

Key Levels

  •         Entry: 76.495
  •  Stop-Loss: 76.895
  • Take-profit: 75.295
  • Reward/Risk: 3

Dollar Risks and Rewards

Risk: 40 pips = $372 per lot, or $37.2 per mini lot.

Reward: 120 pips = $1,117 per lot, or 111,7 per mini lot

 

Categories
Forex Assets

Costs Involved While Trading The ‘AUD/PLN’ Exotic Pair

Introduction

Introduction

Introduction

The expansion of AUD/PLN is the Australian Dollar and Polish Zloty. Here, AUD is the official currency of Australia, and it is the fifth most traded currency in the Forex market. Hence, it is considered as a major currency. In contrast, the PLN (Polish złoty) is thinly traded, and it is the official currency of Poland.

Understanding AUD/PLN

In AUD/PLN currency pairs, the first currency (AUD) is considered the base currency, and the second (PLN) is considered the quote currency. In the foreign exchange market, we always buy the base currency and simultaneously sell the quote currency and vice versa. The market value of AUD/PLN helps us to understand the strength of PLN against the AUD. If the exchange rate of AUD/PLN is 2.7427, it means that we need 2.7427 PLN to buy 1 AUD.

Spread

In Forex, spreads are inevitable, and it is mainly controlled by the broker. Forex brokers have two prices for currency pairs: the bid and ask price. The bid is the price at which we sell an asset, and ask is the price at which we buy it. The difference between the ask price and the bid price is called the spread. Below are the ECN & STP spread values for AUD/PLN Forex pair.

ECN: 17 pips | STP: 20 pips

Fees & Slippage

A fee in Forex is the charges we pay to the broker for opening a trade. Mostly, these fees depend on the type of broker (STP/ECN) we use.

There are times when we want to execute a trade at a particular price, but instead, we end up executing it at a different price. This happens because of slippage. Slippage can take place at any time, but mostly it occurs, we can counter a volatile market.

Trading Range in AUD/PLN

As a trader, we must be aware of the risks involved before entering any trade. The trading range here will guide us about the amount of money we will win or lose in a given amount of time. In the below table, we have the representation of the minimum, average, and maximum pip movement in a currency pair. We will evaluate it by using the ATR indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a significant period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

AUD/PLN Cost as a Percent of the Trading Range

The cost of trade depends on the broker type and varies based on the volatility of the market. The total cost of trade involves spread, fees, and sometimes slippage if the volatility is more.

ECN Model Account

Spread = 17 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 17 + 5 = 25

STP Model Account

Spread = 20| Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 20 + 0 = 23

Trading the AUD/PLN

AUD/PLN is an exotic currency pair that is rarely traded in the Forex exchange market. The average pip movement in 1hr is 63 pips, and that shows the volatility is at medium range.

Note – The higher the volatility, the higher is the risk, and the lower is the cost of the trade and vice versa. Taking an example, we can see from the trading range when the pip movement is more, the cost is low, and when the pip movement is low, the cost is high.

To reduce our trading costs, we may place trades using limit orders instead of market orders. In doing so, the slippage will not be included in the calculation of the total costs. This greatly helps us in reducing the overall cost of the trade. An example of the same is given below. In the below table, we can see how the trading costs have reduced comparatively.

ECN Model Account (But by using Limit Orders)

Spread = 17 | Slippage = 0 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 0 + 17 + 5 = 22

Categories
Crypto Videos Forex Options

Forex Expiries For The 30th Of April

https://youtu.be/LsJsK0zAJOs

https://youtu.be/LsJsK0zAJOs

FX option expiries for Apr 30 NY cut

FX option expiries for Apr 30 NY cut at 10:00 Eastern Time, via DTCC, can be found below. – EUR/USD: EUR amounts
• 1.0730 513m
• 1.0750 712m
• 1.0800 2.1bn
• 1.0947 1.1bn
– USD/JPY: USD amounts
• 105.50 645m
• 106.00 569m
• 106.60 640m
• 106.65 521m
• 107.00 645m
• 107.10 413m
• 107.15 573m
• 107.35 1.4bn
• 107.50 2.2bn
• 107.60 640m
– GBP/USD: GBP amounts
• 1.2320 209m
• 1.2375 209m
• 1.2395 269m
• 1.2400 220m
• 1.2430 241m
– AUD/USD: AUD amounts
• 0.6570 2.7bn

INTRO + Hello everybody, and thank you for joining us for the daily FX expiries briefing video for the 10 am New York cut today.
If it is your first time with us, the FX currency options market runs in tandem with the spot FX market, but where traders typically place Call and Put trades on the future value of a currency exchange rate and these futures contracts typically run from 1 day to weeks, or months.
Each day we bring you details of the notable FX option expiries where they have an accumulative value of a minimum of $100M + and where quite often these institutional size expiries can act as a magnet for price action in the Spot FX arena leading up to the 10 am cut.
We will also plot the levels on to the relevant charts at the various exchange rates where there are due to expire, and also identify the levels which are in play, and where we believe there is a greater chance of the expiry maturing based on technical analysis at the time of writing, we will label them as hot, warm or cold.


So today we have four Option Expires for the EUR/USD pair today ………………

Also, there are also 10 Options expiring for the USD/JPY pair…………………….

Also, there are also 5 Options expiring for GBPUSD…………………….

Also, there is also one Option expiring for AUDUSD…………………….

Of the notable option expiries which we brought you yesterday: price action hit the 108.65 level for EURUSD pair, which was an official strike at the 10 am cut. We listed this as Hot.
ERUGBP hit 0.8730 at the cut, which was only 30 pips from the 0.8700 option expiry. We listed this as Hot too.

GBPUSD had an expiry at 1.2425, and where we saw price action hit 124.47 at the cut, just 22 pips from the option expiry. We also listed this as Hot.

We suggest you take the levels and plot them onto your own trading charts and incorporate the information into your own trading methodology in order to use the information to your advantage.

Remember, the higher the amount, the larger the gravitational pull towards the exchange rate maturity at 10:00 am Eastern time.
For a detailed explanation of FX options and how they affect price action in the spot forex market, please follow the link to our educational video.

Categories
Forex Videos

Everything You Need To Know About The Forex Market Right Now!

https://youtu.be/_Nb5gUsoRys

https://youtu.be/_Nb5gUsoRys

When the fundamentals lag behind the technicals

In recent weeks you will have noticed that the financial markets are in complete turmoil, with extreme volatility in all sectors, but especially in the oil markets more recently, and where stock markets seem to be propped up by hope more than fundamentals; after all, many indices have been rallying while the world economies have ground to a halt. And where volatility has also spilled over into the currency market.

At the end of March 2020, we saw huge moves in currency pairs including a spike in cable, which only a few short weeks ago was trading at 1:14 and yet has recently spiked up to 1.2640, and where fundamentals for the British economy do not support this huge increase in the value of the pound.

So what is going on? Well, one thing is for sure, British economic data releases are not really showing the true extent of the fallout of the Covid-19 pandemic yet. And so, the fundamentals are lagging the technicals. In other words, the markets are being driven by technical analysis rather than fundamental analysis, in some circumstances.
Something that has stuck out like a sore thumb with regard to fundamentals lagging technicals is the USDCAD pair’s recent choppy price action. Let’s drill down in a little more detail to try and establish what is going on.


Before we do that, let’s take a look at the West Texas Intermediate or WTI, price action chart of the last 12-months. WTI is the benchmark for crude oil, and from 2019 to 2020, the price of a barrel of crude oil ranged between $50 to $66. West Texas Intermediate is a specific grade of crude that is used around the world and is seen as a benchmark in pricing oil.


In this chart, we can see that in the same 12-period, USDCAD ranged between 1.2966 to 1.3575. Obviously, this was just before the virus pandemic. But in case you didn’t know, Canada is the fourth-largest producer and fourth-largest exporter of oil in the world, with 96% of Canada’s oil exports going to the United States.
Production and exportation of all products, including gas and electricity in Canada, contributed to around 170 billion in Canadian Dollars to it’s 1.8 trillion dollars of gross domestic product, which equates to around about 10% of GDP. And so oil is big business in Canada. And anything that upsets the production and exportation of oil will have a dramatic effect on Canada’s gross domestic product, and a spillover will, of course, be the value of the Canadian dollar, where we would expect price action volatility.
In fact, Canada has huge reserves of crude oil in Alberta’s Oil Sands and large deposits off the coast of Atlantic Canada. Oil is such a big business here, including exploration, drilling, production, field processing, as well as storing and the transportation of oil.

The Canadian dollar is sometimes referred to as the Loonie because of the loon bird, as depicted on the Canadian $1 coin. The Canadian dollar is one of the major currency pairs. It is widely traded in the financial markets and has been subject to extreme volatility during the current crisis.
However, we have also noticed that the USDCAD price action has become out of kilter recently, and this can be attributed to price action falling out of line with fundamental analysis and where traders have been preferring to trade on the basis of technical analysis. But be warned, fundamental reasons will catch up eventually and make the relevant corrections.
let’s set out our reasoning behind this theory:


In this daily chart of the USDCAD, pair we can see that the price action, which had previously been contained within the 1.2966 to 1.3575 area, has spiked higher to reach a multi-year high at 1.4664 on the 19th March 2020. There are several reasons for this, including the perceived Covid-19 related hit to the Canadian economy, which affected and devalued the Canadian dollar.

 

But if we take a look at this chart of WTI, we can also see that the 2019 to 2020 price of a barrel of crude oil range of $50 to $66 has spiked lower to $21 per barrel and therefore this would have been the main contributor for the Canadian dollar spiking higher because traders envisaged that the low price of oil, which is attributed to a global slowdown and a lack of demand, would devalue the Canadian dollar and that is exactly what happened; Oil price lower, Canadian Dollar value lower.


Let’s move forward to 30th April where the price of oil has continued to collapse, at one point going into negative territory to – $40 a barrel for WTI for May’s futures contract, which is the first time in history that this has ever happened. But at this point, we can see that price has somewhat recovered to $11 dollars per barrel. And we might, therefore, expect that the Canadian dollar has also weakened.


However, on the same day of the oil low, 30th April, the Canadian dollar has rallied higher in value, with the USDCAD showing a low of 1.3843, its highest level in six weeks. Before moving higher again to 1.4100 where it currently sits.
While some of the increase in the value could have been attributed to the oil price coming off of its low, especially the minus figures, on hopes of a fuel demand recovery, the prospects of further economic stimulus by the Canadian government, and the gradual reopening of western economies, we can be in no doubt that there has been a lag in fundamental analysis, and where traders have preferred to move with technical analysis, during the period of 19th March to 30th April.
However even if things began to get back to normal, this is going to be an extremely long process, and yet many oil-producing countries such as Saudi Arabia and Russia keep pumping out oil in a high volume regardless of the slowdown in global economic growth and where the

surplus of oil in storage all around the world is not likely to be consumed until 2022, according to some analysts.
Therefore no matter what type of recovery we see, and it won’t be rapid until there is a cure for Covid-19, on the basis of supply and demand, we will see low oil prices for a long time to come. Therefore we should expect the US dollar CAD to continue to rise, perhaps to previous highs of $1.46, as the fundamentals catch up with the technicals.

Categories
Forex Fibonacci

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

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

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

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

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

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

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

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

Categories
Forex Course

118. Using Rectangle Chart Patterns to Trade Breakouts

Introduction

Introduction

Introduction

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

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

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

Rectangle Chart Pattern – Trading Strategies

Buy Example

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

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

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

Sell Example

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

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

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

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

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

[wp_quiz id=”73928″]
Categories
Forex Course

116. Trading The Ascending & Descending Triangle Chart Patterns

Introduction

Introduction

Introduction

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

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

Ascending Triangle

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

Descending Triangle

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

Symmetrical Triangle

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

How To Trade The Triangle Chart Pattern?

Trading The Bullish or Ascending Triangle Pattern

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

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

Trading The Bearish or Descending Triangle Pattern

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

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

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

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

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Crypto Market Analysis

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

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

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

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

ReddCoin took the position of today’s most prominent daily gainer, with gains of 31.95%. 0x lost 11.75% of its daily value, making it the most prominent daily loser.

Bitcoin’s dominance stayed at the same place since we last reported, with its value currently at 67.17%. This value represents a 0.08% difference to the downside.

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

What happened in the past 24 hours

Bitcoin Halving

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

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

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Technical analysis

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Bitcoin

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


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

Key levels to the upside                    Key levels to the downside

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

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

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

Ethereum

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


Key levels to the upside                    Key levels to the downside

1: $193.6                                            1: $185

2: $198                                              2: $178.65

3: $217.6                                            3: $167.8

Ripple

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


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

Key levels to the upside                    Key levels to the downside

1: $0.2                                               1: $0.19

2: $0.205                                           2: $0.178

3: $0.214                                            3: $0.147