Press review - page 91

[Sergey Golubev]

Forex Vs Other Markets

[Sergey Golubev]

EURUSD Technical Analysis (based on dailyfx article)

• EURUSD remains capped by the trendline that connects the 2008 and 2011 highs (exceeding that level could trigger a breakout). The break below the trendline that extends off of the September and November lows increases the probability that the late December high is significant. The underside of that line crosses 1.3730 on Monday and 1.3754 on Friday.
• The rally from the February low would consist of 2 equal legs at 1.3768.
• The late December failure also raises the possibility of a double top with the October and December highs. The pattern would trigger below 1.3294 and yield a 1.2757 objective. This level is in in line with the 2013 low.

[Sergey Golubev]

GBPUSD Technical Analysis (based on dailyfx article)

• GBPUSD found support last week from former resistance levels; specifically the October high and top side of the line that extends off of the 2009 and 2011 highs.
• The move to new highs opens up the November 2009 high at 1.6877 then the 2005 low and 2009 high at 1.7042/46. The measured objective from this year’s 1.6667-1.6251 range rests at 1.7083.
• 1.6600/50 is support for longs.

[Sergey Golubev]

AUDUSD Technical Analysis (based on dailyfx article)

• The next major target in AUDUSD is .7937. This target is determined by the .8847-.9757 range (.8847 – (.9757-.8847). Interestingly, the 50% retracement of the decline from the 2001 low registers at .7927. ‘Chartwise’, the 2010 low is at .8067.
• The largest advance since the October top is underway. The advance is impulsive (5 waves). The implications are for a pullback into .8820/30 (but maybe not before a run on .9085) before another rally attempt towards .9166-.9267. The trendline that extends off of the April and October highs crosses .9166 in mid-March.

[Sergey Golubev]

NZDUSD Technical Analysis (based on dailyfx article)

• NZDUSD is testing a trendline confluence defined by the line that extends off of the October and January highs as well as the underside of the line that extends off of the August and November lows.
• The level is reinforced by the 1/14 close (high day YTD). In other words, this is a great place for a reaction.

[Sergey Golubev]

USDJPY Technical Analysis (based on dailyfx article)

• USDJPY finishes the week right below the trendline that connects the lows from November 2012 and October 2013. Of note as well is a bearish engulfing pattern. In FX, real engulfing patterns can only occur on a weekly (or monthly) time frame since a gap is required. A bearish engulfing pattern requires a gap higher and close below prior period’s open. Only the bodies of the candle are considered.
• Longer term, there is an Elliott case to be made for a return to the 4thwave of one less degree. The range spans 93.78 to 96.55.

[Sergey Golubev]

USDCAD Technical Analysis (based on dailyfx article)

• Measured objectives from the breakout above the 2011 high range from 1.1680 to 1.1910. The Jul 2009 high rests in this zone at 1.1724 and the 2007 high is near the top of the zone at 1.1875.
• From an Elliott perspective, it’s possible that the rally from the 2012 low composes a ‘3rd of a 3rd (or C)’ wave from the 2007 low.
• The close above the line that extends off of the 2002 and 2009 highs as well as the close above corrective channel resistance add credence to the 3rd of a 3rd wave position.
• USDCAD is at support now.

[Sergey Golubev]

USDCHF Technical Analysis (based on dailyfx article)

• The USDCHF may have completed a corrective decline from the 2012 high in late December. The decline is in 3 waves, channels in a corrective manner (connect the origin of waves A and C and project a parallel from the terminus of wave A to project the terminus of wave C), and consists of 2 equal waves (would be exactly equal at .8888…the lowest weekly close was actually .8885).
• The break above the trendline that originates at the July high adds credence to a larger trend change but the rate remains capped by the June and August lows. The market must stay above the December low in order to maintain a constructive longer term bias.

[Sergey Golubev]

Trader Styles and Flavors (based on dailyfx article)

Technical vs. Fundamental

Technical analysis is the art of studying past price behavior and attempting to anticipate price moves in the future. These are traders that focus solely on price charts and often times incorporate indicators and tools to assist them. They look at price action, support and resistance levels, and chart patterns to create trading strategies that hopefully will turn a profit.

Fundamental analysis looks at the underlying economic conditions of each currency. Traders will turn to the Economic Calendar and Central Bank Announcements. They attempt to predict where price might be headed based on interest rates, jobless claims, treasury yields and more. This can be done by looking at patterns in past economic news releases or by understanding a country’s economic situation.

Short-Term vs. Medium-Term vs. Long-Term

Deciding what time frame we should use is mostly decided by how much time you have to devote to the market on a day-to-day basis. The more time you have each day to trade, the smaller the time frame you could trade, but the choice is ultimately yours.

Short-Term trading generally means placing trades with the intention of closing out the position within the same day, also referred to as
“Day Trading” or “Scalping” if trades are opened and closed very rapidly. Due to the speed at which trades are opened and closed, short-term traders use small time-frame charts (Hourly, 30min, 15min, 5min, 1min).

Medium-Term trades or “Swing Trades” typically are left open for a few hours up to a few days. Common time frames used for this type of trading are Daily, 4-hour and hourly charts.

Long-Term trading involves keeping trades open for days, weeks, months and possibly years. Weekly and Daily charts are popular choices for long term traders. If you are a part-time trader, it might be suitable to begin by trading long term trades that require less of your time.

Discretionary vs. Automated

Discretionary trading means a trader is opening and closing trades by using their own discretion. They can use any of the trading styles listed above to create a strategy and then implement that strategy by placing each individual trade.
The first challenge is creating a winning strategy to follow, but the second (and possibly more difficult) challenge is diligently following the strategy through thick and thin. The psychology of trading can wreak havoc on an otherwise profitable strategy if you break your own rules during crunch time.

Automated trading or algorithmic trading requires the same time and dedication to create a trading strategy as a discretionary trader, but then the trader automates the actual trading process. In other words, computer software opens and closes the trades on its own without needing the trader’s assistance. This has three main benefits. First, it saves the trader quite a bit of time since they no longer have to monitor the market as closely to input trades. Second, it takes the emotions out of trading by letting a computer open and close trades on your behalf. This means you are following your strategy to the letter and are not able to deviate. And third, automated strategies can trade 24 hours a day, 5 days a week giving your account the ability to take advantage of any opportunity that comes its way no matter the time of day.

[Sergey Golubev]

USDJPY Fundamentals (based on dailyfx article)

Fundamental Forecast for Japanese Yen: Bullish

• Yen crosses and the Nikkei 225 have notably disconnected from the S&P 500 and Emerging Markets’ recovery
• The BoJ rate decision and Japan’s 4Q GDP release are key event risk to sustaining the yen-devaluation outlook