Despite an outpouring of important economic indicators and event risk releases this week, foreign exchange (forex) market prices remain relatively contained, leaving investors unable to find firm footing. That scenario ought to change abruptly with this morning’s central bank show-and-tell revue. If the latest policies of the European Central Bank (ECB) and Bank of England (BoE) fail to have an impact, expect tomorrow’s nonfarm payrolls (NFP) report to spur fresh market movement with insight into how deep and wide we can expect the Federal Reserve taper to be. Yesterday, the Federal Open Market Committee’s (FOMC) minutes showed near unanimous agreement amongst the voting members to taper the Fed’s monthly bond purchases in measured steps.
The dollar appreciated against its counterparties after ADP report showed an improvement in the U.S. labor market. The Canadian dollar continued its decline against the dollar and approaching the minimum set in May 2010. The Australian dollar fell for the third consecutive day amid curing, the U.S. dollar.
European capital markets have fluctuated around the peak of the last five years despite the publication than expected ADP. U.S. stocks fell after improving labor market has fueled speculation that monetary stimulus would be cutting accelerated. Asian capital market lost ground amid China's PPI publication below expectations.
A False Breakout Happening Now in CAD/JPY (based on dailyfx article)
CAD/JPY Breaking Daily Trend Line Declining Wedge Pattern on the 4-Hour Chart A Long-Entry Signal That's Flashing Now
the reversal divergence has already formed, ignoring the pin-bar entry on the left, which was already past at the time of writing. Price is currently moving sideways and providing a good opportunity to enter at a better price. With any luck, it will turn out to be a nice runner, as was the case yesterday in our EURAUD entry.
EURJPY Looks Bearish Againts 143.15 (based on forexminute.com article)
EURUSD is accelerating to the downside, USDJPY also looks bearish, so best moves are seen on EURJPY. I see three legs up from latest low with signs of completed rally at 143.15. Current intraday decline is very strong and it looks impulsive so selling pullbacks should be attractive.
A closer look on EURJPY 15min chart. Five waves down in progress We will be watching wave (ii) for possible shorts if we get five legs down.
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USD/CHF Technical Analysis (based on dailyfx artcle)
A break above 0.9077 (618% Fib ret.) has exposed 0.9143 (76.4% Fib ret.) Pushing further above that targets 0.9235 (rising trend line from February 2013) Reversing back below 0.9077 aims for 0.9024 (50% Fib retracement)
Trading RSI (based on dailyfx article) The Relative Strength Index can be an extremely versatile indicator, Like any other indicator, it will never be perfectly predictive, Three ways of trading with...