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Gold prices weaken slightly in Asia on prospects for Fed tapering
Investing.com - Gold prices eased slightly in Asia Tuesday on firming expectations for the Federal Reserve to begin scaling back monetary stimulus programs in early 2014.
Reserve Bank of Australia keeps cash rate at 2.5%, concerned over AUD
Investing.com - The Reserve Bank of Australia kept its cash rate steady at a record low 2.5% on Tuesday in its November review as expected, adding that the Australian dollar remains uncomfortably high and it would assess its outlook and adjust policy as needed.
The RBA reiterated it expects inflation to remain consistent with the medium-term trend over the next one to two years.
GBP/JPY trading 168.50
FXstreet.com (London) - GBP/JPY has maintained higher ground while the pound has been bid following another strong manufacturing PMI report.
The 20 DMA is 161.55, the 50 DMA is 159.20 and the 200 DMA is 152.75. RSI (14) reads 59.25. Supports are ascending from 166.00, 166.50, 166.80 and 167.50. Spot is 168.58 and resistances are 168.70, 170.45, 173.00 and 173.65
EUR/USD likely see stronger selling interest after 1.3550/60 loss
FXstreet.com (Bali) - The EUR/USD saw a convincing bearish move on Monday, likely to spur further selling interest as the close below 1.3550 confirms low conviction by Euro bulls to explore levels past 1.36.
The sentiment towards a Fed taper in coming months has slightly improved early this week, after surprisingly strong manufacturing data in the US on Monday.
USD/JPY breaks above 103.25 barrier
Technically, traders should expect area 103/103.10 to provide support on dips while 103.50 up to 103.70 (year high) should see a decent cluster of offers challenging the ebullient bullish momentum.
Forex - Dollar near six-month highs vs. weaker yen
Investing.com - The dollar was trading close to six month highs against the yen on Tuesday after unexpectedly strong U.S. manufacturing data reinforced expectations that the Federal Reserve will soon start to roll back its stimulus program.
Forex -AUD/USD edges lower on RBA comments
Investing.com - The Australian dollar edged lower against its U.S. counterpart on Tuesday, as comments by Reserve Bank of Australia Governor Glenn Stevens weighed, while expectations for the Federal Reserve to soon scale back its stimulus program still supported the greenback.
The Importance of Strength and Weakness (adapted from dailyfx article)Trends develop from deviations in strength and weakness… if the Euro is
stronger than the US Dollar over a period of time, prices will be
trending higher. That’s one of the great parts about technical analysis;
it will give us an honest depiction of strength and/or weakness in each
pairing over whatever time frame that we want.Strong/Weak Analysis to the Scalper
This brand of analysis is extremely common for short-term traders (commonly called ‘scalpers’ in the FX market).
The allure of such a system is logical: If traders are able to find
longer-term trends, or ‘bigger-picture’ moves, they can look to scalp
inside of those moves in the direction of those trends.
Scalpers are often best served by identifying trends on the hourly
and/or four-hour charts so that they can look for that momentum to take
their trade(s) on the shorter-term chart to profitable territory.
Scalpers can look for pairs with the greatest strength/weakness
deviation on the hourly chart, and then look for a short-term pullback
After the retracement has finished, as the pair moves in the direction
of the general trend, traders can look to enter in that direction;
anticipating that the longer-term trend may win out.
Traders can look to trigger in a variety of ways. An oscillator on the
shorter-term chart can be an excellent entry mechanism, as can a cross
of a moving average.
Scalpers can use strong weak to find the trend; and enter using indicator triggersThe benefit of waiting on a pullback is the fact that the trader can
look to enter relatively cheaply; so that if the trend comes back, the
payoff could be large relative to the amount of risk that it took to
initiate the position. But if the trend doesn't come back, the loss can
be mitigated, and the trader can look for greener pastures elsewhere (or
Strong/Weak Analysis to the Swing Trader
Swing traders take a slightly different view on markets than the
scalper, but the approach is often similar with longer time frames being
used.Swing traders can look to the four-hour, and daily chart to grade trends
and determine biases that they may want to work with. And like the
scalper, they often want to wait for prices to pull back in those trends
so that they can look to buy low, and/or sell high.
Traders can look for pairs with the greatest strength/weakness
deviations, and look to trade those pairs in the direction of the trend
after the currency pair retraces.
Traders can look to trade in the direction of the trend, triggering with
an Oscillator or moving average entry as seen above; or by using a
price action formation such as a Bullish Hammer as outlined in The Four
Swing traders can use price action to trigger in the strongest trendsStrong/Weak Analysis to the Long-Term Fundamental Trader
If you already have your own bias, then deciding the direction you want
to trade a currency is rather simple, because you already know if you
want to buy or sell it.
Traders with a long-term fundamental viewpoint often have this bias
based on their own macro-economic analysis. Perhaps they expect weakness
in Europe due to structural problems with debt obligations, or maybe
they’re looking for weakness in the Yen under the expectation of another
round of Abenomics.
These traders can use Strong/Weak analysis for a couple of different purposes.
First and foremost, these traders can use Strong/Weak analysis to properly voice their trade opinion in the first place.After a trader has a profitable position, they can use those profits to
finance additional positions should the trend continue moving higher.
This is the way many of the greatest traders have speculated, turning
big moves into huge gains, all financed by one initial position.