Fxnet Technical Analysis On Major Currencies & Commodities
EUR/USD - European Session:
The pair inched higher consolidating above 50% correction again around 1.3560 close to support 1.3555 levels that will be the intraday interval today. There is a possibility of a new bullish wave as long as the pair doesn’t break 1.3500 levels represented in 38.2% correction. Linear Regression Indicators forms good support for the pair, as it’s significant not to break 38.2% correction to cancel the negative momentum signals showing on Stochastic.
Support: 1.3580, 1.3555, 1.3500, 1.3470, 1.3420
Resistance: 1.3605, 1.3630, 1.3660, 1.3710, 1.3745
Recommendation: Based on the above, buy the pair above 1.3580 targeting 1.3605, 1.3660 then 1.3710 and stop-loss below 1.3500
GBP/USD - European Session:
The pair managed to stabilize again above 1.6365 levels yesterday represented in 127.2% correction which triggers the upside move. Momentum indicators tends to show overbought signals, but we will ignore these signals as long as the pair stabilizes above 1.6260 today which represents a previous top and the resistance of the continuous technical formation.
Support: 1.6365, 1.6325, 1.6305, 1.6260, 1.6205
Resistance: 1.6420, 1.6475, 1.6515, 1.6550, 1.6600
Recommendation: Based on the above, buy the pair above 1.6380 targeting 1.6420, 1.6475 and 1.6515, stop-loss below 1.6260
USD/JPY - European Session:
The pair dropped sharply yesterday after acquiring the target at 161.8% correction at 103.10. The pair is trading below Linear Regression Indicator 34 but above Linear Regression Indicator 55. Momentum indicators are also showing negative signals with stabilizing above 102.50 which might prevent us from expecting negativity but we will expect another bullish attempt. Risk/Reward Ratio are inappropriate; therefore we will remain neutral in the European session without excluding the bullish attempt.
Support: 102.50, 102.20, 102.00, 101.50, 101.15
Resistance: 102.70, 103.10, 103.50, 103.95, 104.10
Recommendation: Based on the above, we prefer to remain neutral due to inappropriate Risk/Reward Ratio
EUR/JPY - European Session:
The pair failed to hold above 139.70 for long, returning to the sideways range shown on graph at the time Stochastic is attempting to support the pair return to positivity. We will stay on the sidelines for now to observe trading around 139.70 resistance and 138.95 support that will define the upcoming trend.
**Trading range expected today is between the key support at 138.25 and key resistance at 141.00
Support: 138.95, 138.25, 137.70, 137.05, 136.45
Resistance: 139.70, 140.55, 141.00, 141.65, 142.45
Recommendation: Based on the above, we prefer to remain on the sidelines waiting for more confirmations
GOLD - European Session:
Gold traded narrowly yesterday, consolidating below the recent minor swing low at 1228.00, within the context of the bearish trend among the falling channel shown on chart. Accordingly, the bearish scenario continues to be favored.
** Chart is based on GMT+2 timing
* if price reaches within 20% from target before triggering entry, signal is canceled and not valid anymore.
* Support and Resistance levels should be treated as regions not precise numbers
Support: 1220.00, 1210.00, 1200.00, 1190.00, 1180.00
Resistance: 1225.00, 1235.00, 1240.00, 1246.00, 1252.00
Recommendation: Short below 1230.00, targets at 1220.00,1210.00 and 1200.00. Stop loss above 1240.00
SILVER - European Session:
Silver remains under pressure, extending the bearish wave , as price settles below the recently broken support at 19.50, which may form a near term resistance. Overall, the bearish scenario continues to be favored, where downside targets could extend to the projected bearish channel shown on chart.
*if price reaches within 20% from target before triggering entry, signal is canceled and not valid anymore.
*Support and Resistance levels should be treated as regions not precise numbers
Support: 19.00, 18.70, 18.50, 18.20, 18.00
Resistance: 19.20, 19.50, 19.75, 20.00, 20.25
Recommendation: Short below 19.50, targets at 19.00 and 18.20. Stop loss above 20.10
Crude OIL - European Session:
WTI Crude Oil extended the upside, breaking the main descending resistance and reached our full upside targets. Price is approaching the cluster of 200 and 50-days SMAs, where it may find some intraday resistance. For now, we prefer to move to the sidelines and look for a shorter time-interval trading signal.
Support: 97.00, 96.65, 95.95, 95.50, 95.00
Resistance: 97.40, 97.85, 98.20, 98.80, 99.25
The pair moved to the upside again yesterday supported by stability above 50% correction at 1.3555 levels and Linear Regression Indicators. The pair has to breach 1.3265 – 1.3630 to confirm extending the bullish wave further. The bullish possibility remains valid today unless the pair breaks 1.3500 levels.
Resistance: 1.3630, 1.3660, 1.3710, 1.3745, 1.3770
Recommendation: Based on the above, buy the pair above 1.3600 targeting 1.3660, 1.3710 then 1.3770 and stop-loss below 1.3500
For the third consecutive day, the pair stabilized again above 127.2% correction at 1.6365 despite the bearish attempts and being overbought. Stability above the referred to level is triggered by clear positivity showing on Linear Regression Indicators and a bullish continuous formation. The possibility of extending the upside move is valid today, as trading above 1.6260 will be considered positive.
Recommendation: Based on the above, buy the pair above 1.6375 targeting 1.6420, 1.6475 and 1.6515, stop-loss below 1.6260
The pair dropped breaking 102.55 levels and the bullish support. Linear Regression Indicators are negative, while RSI and Stochastic are trading below line 50 negatively. Therefore, the possibility of further bearish correction is valid today and breaking 101.85 levels will support these expectations.
Support: 102.00, 101.85, 101.50, 101.15, 101.00
Resistance: 102.20, 102.55, 102.70, 103.10, 103.50
Recommendation: Based on the above, sell the pair below 102.20 targeting 101.85, 101.15 then 100.80 and stop-loss above 103.10
The pair is still hovering around the support of the sideways range, while the minor descending channel is negatively pressuring intraday trading while the MA 50 is protecting the pair from more bearishness. Those conflicting signals force us to stay on the sidelines to confirm the next move with a breakout below 138.40 or a breach of 139.70.
**Trading range expected today is between the key support at 137.65 and key resistance 140.00
Support: 138.40, 137.70, 137.05, 136.40, 135.50
Resistance: 139.30, 139.70, 140.55, 141.00, 141.65
Gold jumped yesterday, invalidating the bearish bias and settling back above 1235.00 broken support, forming a strong bullish candle, the rebound suggest further upside correctional bias is likely within the context of the overall bearish channel.
Support: 1235.00, 1225.00, 1220.00, 1210.00, 1200.00
Resistance: 1240.00, 1250.00, 1258.00, 1268.00, 1278.00
Recommendation: Long above 1230.00, targets at 1240.00 and 1250.00. Stop loss below 1220.00
Silver moved higher, retesting the previously broken support area around 19.55, where the overall bias remains bearish, however, by settling above 19.50 we may see a push even higher over intraday basis, but we prefer to wait for a confirmation of the upcoming intraday move.
Support: 19.50, 19.20, 19.00, 18.70, 18.50
Resistance: 19.75, 20.00, 20.20, 20.50, 20.75
WTI Crude maintained the bullish tone yesterday, following the main bullish breakout above 95.50 resistance level, we may see further upside over intraday basis, towards the possible resistance area around 99.00. However the overall short term bias remains to the downside.
Support: 97.00, 96.65, 96.30, 95.95, 95.50
Resistance: 97.40, 97.85, 98.20, 98.80, 99.60
Recommendation: Long above 96.40, targets at 97.25 and 98.75. Stop loss below 95.50
The Importance Of Knowing Your Broker's Liquidity Provider - FXNET
Many forex brokers (enclosed market-markers), are now trying to jump into the institutional business, looking to provide liquidity (execution venue) to smaller brokers, aiming to increase their volumes and therefore, profits. However, due to the fact that these liquidity venues are market-makers by nature, consequently, they will want the smaller broker having the omnibus account with them to lose its funds. It's the big fish eating the smaller fish kind of situation!
Most liquidity venues treat the smaller brokers as retail clients and will start cutting its wings slowly (by using widely known little tricks such as re-quotes, rejections, slippage, etc), leaving no room for that account to survive. The smaller brokers' shortage of funds and daily struggle to survive, will force them to cut-back on ad-campaigns and technological advances and consequently, prevent them from providing good service and execution to their clients causing both broker and clients to become the sad victims of these 'almighty liquidity monsters'.
After doing a little bit of research, I am sure you will find out who the most credible liquidity providers are and when choosing a forex broker, it's best to always ask: Who is your liquidity provider?
-Brokers getting liquidity from another retail broker, no matter how attractive the low spreads are, is a dangerous choice (as described above).
-Opt for a broker getting liquidity from a serious liquidity venue who does not normally accept retail clients (individual traders).
-Even better, go for a broker who gets liquidity from an STP (Straight Through Processing) Liquidity Venue, simply because there will be no conflict of interest between the broker and the venue.
At the end of the day, it all comes down to you and who you think fits you the best, always based on your preferred methods of trading.
Make an informed decision, choose wisely and best of luck with all your trading activities!!!
Euro hits new 5-year high against yen - FXNET Market Overview
The euro and sterling edged higher in Asia today, while the dollar was little changed against the yen. There were no key economic data releases during the session, and market sentiment kept yesterday’s risk-on mood, continuing from Friday’s upbeat US jobs numbers.
The euro climbed to a six-week high against the dollar at $1.3764 and hit a new five-year high against the yen at 142.15.
Investors are bullish on the euro as they do not expect the European Central Bank to ease policy further anytime soon. All eyes will be on ECB Chief Mario Draghi who will be speaking later today at an event in Rome.
Sterling rose to a two-year high versus the dollar, touching $1.6464. Bank of England Governor Mark Carney said yesterday that Britain’s recovery will need to be sustained for a while before it is strong enough to withstand higher interest rates. Focus will be on the release of a UK factory output report today.
The dollar reached a six-month high against the yen on expectations of tapering by the Federal Reserve soon. Yesterday Federal Reserve Bank of Dallas President Richard Fisher said the US central bank should begin scaling back its asset purchases as soon as possible.
All eyes on US Jobless Claims & Retail Sales - Market Overview by FXNET
The dollar was weaker on Wednesday as there was no data to move the markets, but there will be some action on the U.S. economic calendar today, as initial jobless claims and retail sales are on deck.
EUR/USD ground its way through sellers into the 1.3800 level, with the eventual target over the figure being the 2013 high of 1.3832 and currently moving around 1.3799 (8:00 GMT).
USD/JPY found support near 102.20 for a while yesterday but the pairing bounced subsequently over 102.50 and now trading at 102.80 (8:00 GMT).
GBP/USD took a dive after trading at a two-year high against the dollar to 1.6340 lows yesterday before recovering back up to 1.6410 levels today (8:00 GMT).
GOLD futures stepped down from a three-week high to finish at a lower level for the first time in three sessions as a U.S. budget deal helped move excitement away from the precious metal. Walter de Wet (Standard Bank) said that the budget deal eliminates “another hurdle to economic growth” and increases the chances of a stimulus taper this month.
SILVER (March) shed 6 cents, or 0.3%, to $20.30 an ounce.
CRUDE OlL for January delivery fell 9 cents, or 0.1%, to $97.35 a barrel in electronic trading.
The Morning After The US Positive Retail Sales Data - Market Overview by FXNET
The USD performance scored impressively high during yesterday's N.Y. trade. Moving into a festive season and a very calm market, what is bound to shake the waters, is next week's FOMC announcement. Please see below how some of the currency pairs performed yesterday:
EUR/USD - After ECB's board member Praet suggested possible purchase reductions of sovereign debt, the pair jumped up from 1.3748 lows to 1.3798 which didn't last long, as anticipation for the US Data caused the pair to gradually lose ground. After positive US Retail Sales, it took a dive into 1.3760 levels and started to weaken ever since, currently trading steadily around 1.3750 (08:00 GMT). Failure to bounce back up, probably means, we may see the pair lose even more ground until next week's FOMC meeting.
GBP/USD - After the positive U.S. Retail Sales data, the pair gave up on the 1.64 grip and hit lows of 1.6321, now trading at 1.6338 (08:00 GMT).
USD/JPY - Even though yesterday the pair started trading at low levels of 102.38 it started to bounce up throughout the day, especially after the positive outcome of the U.S. retail sales data. USD/JPY found some resistance at 103.00 (Japanese Exporters were said to be on the offer) but soon broke over that and climbed highs of 103.20, gradually rising up ever since, currently trading at 103.58 (08:00 GMT) after reaching new highs of 103.90 at 04:30 GMT.
USD/CAD - While the pair traded lower around 1.0560 during morning hours yesterday, it later recovered to 1.0615 after the mixed results of the U.S. and Canadian data (13:30 GMT). The pair kept climbing up reaching 1.0654, and currently trades at 1.0643 (08:00 GMT). With higher U.S. yields, tempering oil and gold prices, as well as prospects for Fed tapering, there is probably little stopping the USD/CAD from rising up to the good old 1.0700 levels.
Major Currencies & Commodities Weekly Technical Report by FXNET
EUR/USD - Weekly Report:
The pair started this week’s trading slightly to the upside but is still limited below Linear Regression Indicators and 88.6% correction showing on graph. Therefore the possibility of moving to the downside is available this week affected by the bearish harmonic Bat Pattern. Stochastic is approaching overbought areas supporting the suggested negativity.
Of note, breaching 1.3830 could fail the harmonic pattern and trigger a new bullish wave.
Support: 1.3715, 1.3655, 1.3600, 1.3580, 1.3565
Resistance: 1.3775, 1.3800, 1.3835, 1.3880, 1.3910
Based on the above, sell the pair below 1.3755 targeting 1.3705, 1.3655 then 1.3565 and stop-loss above 1.3835
If the stop-loss was triggered, buy the pair above 1.3835 targeting 1.3880, 1.3910 then 1.3990 and stop-loss below 1.3770
GBP/USD - Weekly Report:
Breaking 1.6360 followed by stabilizing below 23.6% correction at 1.6315 showing on graph confirmed the downside move. Trading below 1.6410 keeps the bearish possibility this week but stabilizing below 1.6360 is better to strengthen these expectations. The suggested target of the current downside move is 38.2% correction followed by 50% and 51.8% corrections respectively, as breaking them will trigger the possibility of touching the next level. Linear Regression Indicators are negative supporting our expectations.
Support: 1.6260, 1.6230, 1.6155, 1.6120, 1.6085
Resistance: 1.6315, 1.6360, 1.6410, 1.6475, 1.6550
Based on the above, sell the pair below 1.6310 targeting 1.6230, 1.6155 and 1.6085, stop-loss above 1.6410
USD/JPY - Weekly Report:
The pair moved to the downside with the beginning of this week but is still within the ascending channel as shown on graph. Stability above 102.50 keeps the bullish possibility available again, as the pair has to break 101.70 to confirm a bearish correction. We will benefit from approaching 101.70 to enter an overbought area, whereas we bet on the overall upside move meanwhile breaking 101.70 will trigger a downside move that might be strong.
Support: 102.50, 102.00, 101.70, 101.25, 100.40
Resistance: 103.10, 103.95, 104.10, 104.65, 105.40
Based on the above, buy the pair above 102.55 targeting 103.10, 103.95 then 104.65 and stop-loss below 101.70
If the stop-loss was triggered, sell the pair below 101.25 targeting 100.80, 1.3385 then 100.40 and stop-loss above 102.55
EUR/JPY - Weekly Report:
The pair dropped last Friday and extended the downside bias with the kick-start of trading today to fluctuate around the support of the ascending channel around 141.20. This level resides with the MA 50 adding more support to this level support the extension of the general uptrend targeting mainly 144.45 areas. Note that a breakout below 141.20 then 140.90 followed by a daily closing below those levels will turn intraday outlook to the downside.
**Trading range expected this week is between the key support at 139.85 and key resistance 144.45
Support: 141.20, 140.90, 140.10, 139.85, 139.30
Resistance: 141.75, 142.15, 142.75, 143.55, 144.45
Based on the above, buy the pair above 141.20 targeting 142.15 then 143.55 and stop-loss below 140.05
GOLD - Weekly Report:
Gold moved slightly higher on Friday, correcting some of earlier losses, however price remains within bearish trend, below the key resistance area among 1254.00-1268.00, accordingly, we remain bearish for this week.
Support: 1230.00, 1220.00, 1211.00, 1205.00, 1196.00
Resistance: 1235.00, 1243.00, 1250.00, 1258.00, 1268.00
Short gold below 1240.00, targets at 1225.00 and 1211.00. Stop-loss above 1258.00
SILVER - Weekly Report:
Silver maintains the overall bearish bias ,although price closed Friday’s session slightly higher, however, the overall bias remains strongly bearish as long as 20.50 resistance area is holding.
Support: 19.55, 19.15, 18.90, 18.60, 18.25
Resistance: 19.75, 20.00, 20.25, 20.50, 20.60
Short below 20.00, targets at and 19.50 and 18.80. Stop loss above 20.60.
Crude OIL - Weekly Report:
WTI Crude oil retraced strongly after testing the 200-days SMA and the key resistance area around 99.00, where we still see further short term downside towards 95.50 support areas. Accordingly, we remain bearish.
Support: 96.30, 95.50, 95.10, 94.65, 93.90
Resistance: 97.10, 98.00, 98.75, 99.50, 100.00
Short below 97.15, targets at 96. 30 and 95.50. Stop loss above 98.05
Aussie near 3-month lows after RBA minutes - Market Overview by FXNET
Australia was in focus today as the Reserve Bank of Australia released its minutes of the last policy meeting. The central bank revealed that while it kept the interest rate unchanged, it did not close off the possibility of reducing the rate further should that be “appropriate to support sustainable growth in economic activity, consistent with the inflation target”.
AUD/USD remained weak today, trading a tight range between $0.8927 and $0.8957, near three-month lows.
The US dollar was flat against the yen and weaker against the euro as market participants prefer not to buy the US currency before a key risk event on Wednesday– the FOMC announcement. The Federal Reserve is about to begin a two-day meeting ending in an announcement tomorrow.
There is growing speculation the Fed will consider scaling back its $85 billion-a-month bond-purchase program. These stimulus measures have tended to devalue the dollar and so the initial reaction to a taper will probably be dollar-buying.
USD/JPY opened in Asia at 103.00 and edged down to 102.97.
The euro bounced back up against the dollar, as investors await a German investor confidence report later. The ZEW survey is forecast to show a rise in confidence. Yesterday, better-than-expected Euro zone manufacturing PMI data also helped support the euro.
EUR/USD opened in Asia at $1.3760 and gained 0.08% to end the session at $1.3772.
Trading Strategy Tips for Forex Beginners - by FXNET
Before you start trading, you have to understand that money and risk management is the most important step to take as a trader. The number one reason for traders losing all their money, is the lack of a proper money and risk management strategy.
As a general rule, you should not take risk more than 5% of the capital you invest on a single position. Some traders are comfortable to risk as much as 10%, but you should never exceed this amount. Below is a useful guide that shows the maximum volume (lot) to open on a single position, according to how much money you have invested and according to your stop-loss (examples of 10-pip and 15-pip stop loss are given.
It is highly recommended to choose a green and maybe a yellow area, but to avoid red.
Gold is more risky to trade due to high volatility, however, more profit (or loss) can be made in relation to the margin needed in comparison to currency pairs. Below is a recommended risk strategy for trading gold.
Another integral part of your money management is the risk-reward ratio. After choosing the amount of risk you are willing to take for each trade, you should then choose the appropriate reward to justify this risk.
For example, with a 10-pip risk on a 0.1 lot trade, your risk is $10 (10x$1). Some of the possible risk-reward ratios are the following:
• Take Profit at 10 pips, risk-reward is 1:1 ($10 risk, $10 reward)
• Take profit at 20 pips, risk reward is 1:2 ($10 risk, $20 reward)
• Take profit at 30 pips, risk reward is 1:3 ($10 risk, $30 reward)
The higher the risk reward ratio, the less successful trades you need in order to be profitable. For example:
• For 1:3 ratio, you need to win 1 out of 4 trades to break even
• For 1:2 ratio, you need to win 1 out of 3 trades to break even
• For 1:1 ratio, you need to win half of your trades to break even
However, the higher the risk-reward ratio, the more difficult is to win a trade since you need more pips in order to close the position.
The risk-reward ratio to choose depends on your trading style. Scalpers usually prefer lower ratios, while day traders prefer higher. In any case, your ratio should never fall below 1:1 (the risk being higher than the reward).
No matter what kind of trader you are and on what timeframe you prefer to trade, it’s very important to always have the big picture. For example, looking at the 5 minute chart of AUDUSD below, it is clearly that the pair is going up, therefore we should go buy.
However, if we look at the bigger picture with a 4-hour chart, we see that the pair is actually now going down.
Even if you prefer to trade in the lowest timeframes, always check what the general trend is, by looking at several higher timeframes.
There is a famous saying in the trading world, which is “Trend is your Friend”. While by just following the trend is not a guarantee that you will make profit, it increases your winning probabilities immensely.
One simple and effective way to see on what direction is the trend, or if there is no trend at all, is to use a Simple Moving Average on a high timeframe. If prices are above the Simple Moving Average line, then there is an uptrend, if they are below there is a downtrend, while if they more or less in the middle then the pair is ranging (no trend).
Here are 3 examples of pairs are in an uptrend, downtrend, and ranging.
If you were only allowed to choose one tool to trade, then that would have to be support and resistance. This very basic but at the same extremely important tool is a must on every forex chart.
Support shows a price level where prices find difficulty to fall below, and are likely to bounce off. Resistance is the opposite; a price level that prices find difficulty to climb above. While within a char there can be a lot of support and resistance lines, it is very important to remember the more times prices bounce off a support or resistance line, and the higher the timeframe the line is drawn, then the stronger the line is.. Another important thing to remember is that when a support lines is penetrated, it is very likely to act as a future resistance line. The same applies for resistance lines; when they are penetrated, they will likely be future support line.
One of the most popular uses for support and resistance lines is to use them as entry points, take profit and stop loss targets. See the following examples for strong support and resistance lines.
Resistance line: http://www.fxnet.com/media/documents/trading-strategy-tips-for-forex-beginners-resistance-line_1.png
Support Line: http://www.fxnet.com/media/documents/trading-strategy-tips-for-forex-beginners-support-line_1.png
No matter what trading system you use and what type of indicators you have on your charts, everything comes from price action. The most popular tool for displaying price action in forex charts is the candlestick. Before you even consider start trading, you must first learn how to read candlesticks and their various formations. Having a basic knowledge about candlestick price action will not only allow you to understand what is happening on the charts but also how to predict future price movement.
To learn more about candlestick reading and candlestick patterns please click here.
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