Archive for October 28th, 2009
GoLearnForex Daily Technical Analysis
USD/CAD:
We have noted several times a formation we refer to as a Step pattern. More commonly this is identified by Lower Lows and Lower Highs and vice versa. We picked up on this pattern emerging on a 4 hours chart. We identified the possible start of this pattern shortly after the BOC publicly declared it’s sentiment for a “weak Canadian Dollar”. We assured you that there would still be time to catch this move even if you could not trade the actual news.
We suggested that you wait for the Step to appear and buy on the dip which was a confirmation of our pattern formation. On the graph that it is depicted near the 3 and a yellow circle. The exit for taking PNL we had at 1.0660 a prior support resistance point.
INSERT GRAPH
EUR/USD:
The Squeeze Play. We talked about this move where we are seemingly forced into a breakout. In one of our earlier pieces we mentioned that our experience told us not to bet on the Squeeze Play, meaning trade against the direction of the existing trend. I must admit we got carried away by the hoopla of crossing 1.50.
So the question you all should pose” is why in this case do you bet against the trend when one of the number one rules of technicians is never bet against the trend”. The answer is based on the number two rule of technicians and that is; trade for the outcome that has the highest statistical probability of occurring. To explain this further lets pose a question. Why didn’t the market make this move a while ago similar to the recent strong moves in CHF & AUD?
INSERT CHART
The answer is the Strength of the move was deteriorating in advance of 1.50. Every trader had their eye on 1.50, but obviously no one was a real buyer (for now) otherwise at 1.4830 when momentum started to stall we would have had traders continuing to bid up the EUR. Lastly, when price action was negligible on the big cross of 1.50 that should have been another tip that there were no big orders lined up to continue buying north of 1.50.
We added a MACD to indicate when the momentum started to wane. There are number of overbought tools on your platforms that you can use, from Stochastics and Oscillators to something as simple as the RSI.
Analysis by http://www.golearnforex.net
Daily Review 28/10/2009
USD Dollar (USD)
The Dollar strengthen during yesterday trading session as Confidence among U.S. consumers unexpectedly fell in October for a second month. The Conference Board’s confidence index dropped to 47.7 from a revised 53.4 in September. NASDAQ decreased by 1.2% and Dow Jones slightly rose by 0.14%. Crude oil rose by 1% closing at 79.55$ a barrel after a volatile trading session as investors wait for the oil inventories today. Gold (XAU) weakened by 0.7% closed at 1035.4$ an ounce. Today, Core Durable Goods Orders are expected at 0.6% vs. -0.3% prior, New Home Sales are expected to rise from 429K to 443K.
EURO (EUR)
The Euro weakened versus the Dollar for the third day in a row on concern a rally in stocks and commodities can’t be sustained. M3 Money Supply came out worse than expected at 1.8% vs. 2.1% forecast. Overall, EUR/USD traded with a low of 1.4770 and with a high of 1.4926. Today, German Prelim CPI is expected at 0.1% vs.-0.4% previously.
EUR/USD – Last: 1.4811
|
Resistance |
1.4824 |
1.4927 |
1.5046 |
|
Support |
1.4770 |
|
|
British Pound (GBP)
The Pound strengthened against the Dollar after the Confederation of British Industry\’s distributive trade\’s survey reported sales balance rose to +8 in October from +3 in September, better than economists\’ forecasts of a rise to +5. This is the fastest pace of growth since December 2007. Overall, GBP/USD traded with a low of 1.6285 and with a high of 1.6438. No economic data expected today.
GBP/USD – Last: 1.6358
|
Resistance |
1.6438 |
1.6636 |
1.6693 |
|
Support |
1.6286 |
1.6250 |
|
Japanese Yen (JPY)
The Yen rose against the Dollar for the first time in 6 days as a plunge in Treasury yields after the record $44 billion auction in two-year notes made the Dollar less attractive to Japanese investors. USD/JPY traded with a low of 91.70 and with a high of 92.32. Retail sales came out at -1.4% vs. -1.5% forecast. No economic data expected today.
USD/JPY-Last: 91.18
|
Resistance |
91.57 |
92.19 |
92.32 |
|
Support |
90.77 |
90.48 |
|
Canadian dollar (CAD)
The Canadian Dollar appreciated from a three-week low, gaining for the first time in four days amid speculation its decline was too big to be sustained after it reached a key technical level. Overall, USDCAD traded with a low of 1.0626 and with a high of 1.0716. Today, BOC Gov Carney Speaks.
USD/CAD – Last: 1.0664
|
Resistance |
1.0696 |
1.0717 |
|
|
Support |
1.0630 |
1.0500 |
1.0450 |
Research by http://www.ufxbank.com
A Brief Overview on the Forex Trading Platform
The forex market is regarded as the largest market in the world with a turnover of about 3-4 trillion dollars. The forex trading platform enables an individual to purchase a currency and sell the other. The currencies are generally traded in pairs such as the Japanese yen and the US dollar.
There are basically two reasons to sell or purchase the currencies. About five percent of the regular turnover is produced by the governments and organizations that sell or purchase the services and products in a foreign country or the ones who have to transform the gains from the foreign sales in domestic currency. The remaining ninety five percent is signified by the speculative transactions or profits.
Working of the forex System- a number of traders do emphasize on the major forex currencies. At present about 85%of regular dealings include such kind of currencies along with the British pound, Japanese yen, US dollar, Euro, Swiss franc, Canadian dollar and Australian dollar. This market is open for twenty four hours a day; forex trading commences in Sydney and then moves throughout the globe. The traders can react instantly to the currency fluctuations that are as a result of social, economic and political events then they do take place.
The forex market is regarded as over the counter market as the transactions here are either conducted by electronic networks or telephone without any central exchange. It is not at all difficult to read the quotations of the foreign exchange if you basically remember tow things in general:
- The first currency that is being listed in known as the base currency and its value is 1 USD always.
- USD is the general essence of the forex market and presently it signifies the base currency for quotations.
While using the forex trading platform you would frequently observe the quotation of two sides the ask and the bid. Bid is indeed the price wherein you can sell the base currency and ask is the price at which one can purchase the base currency.
If you are willing to invest your sum then you can start using the forex trading platform without any doubts anytime. The transactions of the forex market have to be treated carefully and precisely as you may everything here in this market if you fail to take precise care.
There are forex trading platforms available for the interested forex traders and one has to learn how it works. Once you know the theory, you will be able to trade successfully in forex and change your lifestyle accordingly. The only thing is you need to adhere to the rules established or defined by you.
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