Monday, March 26, 2012

Fundamental vs. Technical 3.26

Alternative Strategies:
Assessment of the foreign exchange market has become a more complex manner between fundamental and technical analysis. Over the three months period of the quarter the USD resiliency to maintain its upward trajectory has limited its momentum with the current corrective move to the present levels of where it settles towards the closing of the month's trading. Before going to these numbers, the surrounding issues that attracts equal importance are as follows; without having to go deeper to their explanations, because its speaks for itself. Here is the checklist as follows:
  • Consumer & Investors confidence of the Global economy
  • China & its forecast of a slow growth for the next coming years ( soft landing economy)
  • Net effects on Commodity / Currency markets
  • European debt crisis & US trade balance /deficits / Unemployment / Housing figures
  • Increasing Oil Prices / Supply & demand factor correlation with the Precious metals
  • Iran & Israel conflicts on top of the North Korean Issue
  • Upcoming Presidential elections
With that said, closely monitoring the behavioral patterns of the prices in particular the USD. Its closing prices for the end of the first quarter heading to the two weeks of the new trading month of April will determine its true directional trend.
A resumption of the major trend after the corrective move to the lower levels of 78.09/10 can only maintain whenever the US Dollar Index trades above the previous registered high of 81.80 basis point. With its current price of 79.15 as of this writing would have to have some serious back-up from this week's trade reports from both continents to push it higher. However, the current pace have continued the USD to move lower as the EURUSD & GBPUSD has kept its rally to move higher above their present resistance levels. And this is due to the improve business confidence in Germany beating market expectations.
Continue in Market view at http://megatrade101.com/megatrade101/market-view


Friday, March 23, 2012

Case Study: EURO 3.23

AVOID A GOOD FOREX TRADE - TURN THE OTHER WAY AROUND!

We came across a particular review and analysis report with one of the prominent broker's currency analyst on the Internet. Understanding that these market outlooks, analysis and reports across the wire is meant for traders specially for main street investors / traders to have a glimpse of what the FX market is actually doing.
With all due respect to the broker's currency analyst we are not going to mention the name of both as everyone maintains their opinions of the market and we respect that. However, we were compelled to use this as a case study not to criticize or claim otherwise, but merely to highlight market conditions where strategies are carefully considered to have at least an edge of knowledge and experience to achieve better trades along the way.
LINK: http://megatrade101.com/megatrade101/fxminar

Thursday, March 22, 2012

Mid-Market Analysis 3.22

U.K. retail sales were projected to fall 0.5% in February after expanding 1.2% in the previous month but came at -0.8% higher than most forecast have expected, that prompted the GBPUSD to move lower and currently at the 1.5780 price level.
Most of the European numbers report have been negative as the Euro zone contraction is well evidenced from the French and German Manufacturing and services sectors. The EURUSD is down respectively at the 1.3150 with a low at 1.3132; thus penetrating the important support of 1.3180. The critical price for the week's closing should be closely monitored and this prices is indeed the 1st signal of a bear market with the USDx recovering from these reports.
Furthermore, the drop on the precious metals has added to the positive shift of investors investments to the Reserve currency of the US Dollar. And not to mention the the concern of global slowdown with EU contraction and slowdown in manufacturing data from China. 
Meanwhile, the GBPUSD is currently at 1.5790 as of this writing coming from its psychological price resistance at the 1.5880-1.5920 range and signals its weakness starting from the report. The levels where it may seek some valid support would be at the 1.5680-1.5700 price range.
However, for now that the pullback weighed heavier with the GBPJPY cross than the EURJPY pair, ideally the liquidation of these positions we have held since the 12th of March makes it more sensible to settle; as we shift from Pound correlation with the Japanese Yen, to the US Dollar. Continue in market view report at http://www.megatrade101.com/

Wednesday, March 21, 2012

Technical Perspective: GBPJPY - Part 2 Update


DAILY GBPJPY CROSS as of MCH 21 '12

UPDATE: The same holds true for the GBPJPY cross as it had touched its 2nd objective and above the 133.00 range we mentioned from the opening trading day. The extension price at 133.46 may likewise find some temporary pullbacks as position liquidation & settlements may meet some speculative shorts aiming for some stronger pullbacks from this high.

However, going against the current trend may prove to be fruitless unless risk tolerance if in case it moves towards the levels of 134.80 and equivalent price of the USDJPY at the objective of 85.10 resistance levels. Although, the GBPJPY has proven to have a more profit potential compared with the relative movement of the EURJPY. But both positions taken then on the 12th of March also defined the actual trend of the EURJPY from our previous liquidation at the 108.11 from a low of 105.55 pivotal support price. The daily chart formation so far shows no indication of a price reversal, but we do find a "pullback from these higher levels" towards the end of the week & month trading. We do have a five (5) trading weeks to offset the trading holiday schedule for the coming holy week this April. Watch for the closing prices on both the cross rates and majors for the end of the 1st quarter. 

Technical perspective: EURJPY Cross - Part 2 Update

EURJPY UPDATE: MCH 21 '12
UPDATE: Although, the momentum for the EURJPY slowing pacing the GBPJPY this update of prices extending towards the current price of 111.23 extension high has just penetrated the trend line resistance. The USDJPY recovery above the 84.00 levels have supported the EURJPY as it continues to move towards the 885.00 trading range where most have anticipated where the USDJPY is heading to.
Meanwhile the EURJPY cross with its current pace is aiming for a 111.55 - 112.35 trading range for this week as long as the continued strength of the USDJPY continues its present rally. The pivot price and support still remains to be at the lower price levels of 108.10 -108.65 range way above its Daily Moving Average price of 109.25. Momentum remains steady to higher while the positive tone remains for the Stochastics with the relative strength still has some room to move higher before it reaches an overbought situation. The equi-distant rising channel has been defined in the daily chart and comparing with the weekly may prove to have some possible offers that would "trigger daily pullbacks" at the end of the trading week & month. This recovery from the low of 105.55 has found a sustainable trend so far.

Monday, March 19, 2012

Market Analysis 3.19 - USDx - EUR - GBP vs. JPY Cross rates


USDx as of Mch 12 '12 with FIBONACCI Lower Fan

The not too surprising move of the USD at the end of the trading week of 3.16 was triggered by the inflationary effects of the Consumer Price Index, plus a more negative sentiment vs. the figure from the University of Michigan Confidence report. A justification quite simple enough to draw the USDx lower from its 1st initial objective of 80.50/73 resistance level as mentioned in our supporting video below dated the 12th of March 2012 and market view report on the 13th. The preliminary outlook then for the near term was 'neutral to bearish'. Remember, there is no real straight ups or down as price fluctuations are susceptible to changes due to major news reports. However, this move back to the low of 79.67 was indeed a major correction from its daily /weekly highs as the pullback came in right after the final outcome of the confidence report. Pls. continue ...http://megatrade101.com/
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Sunday, March 18, 2012

Technical Perspective: GBPJPY Cross

Daily GBPJPY cross as of March 19 '12
The market potential of both cross rates have been significant after last Friday's sudden move after the news reports. The GBPUSD rally was likewise the catalyst for the GBPJPY cross to rally behind the EURJPY and have touched 132.42 high. The 130.75 Moving average would also serve as the initial support. Other technicians are looking for a continued pressure if risk appetite would remain on hold for the USD to move lower as it did last Friday's closing price. The weekly and monthly longer term outlook have been significantly bullish and remains to be tolerable for any drawback movement for the USDJPY relationship. Keep track of the closing prices above the previous day's closing and opening price levels.
And this was even contrary to its technical candle formation of a two consecutive weekly spinning top / doji especially located at the higher segment of its price range. And this was where other traders saw a possible correction but turned otherwise. The extension prices at the 132.40-133.00 will be its temporary topping out if and whenever a consolidation would be made. However, the GBPJPY would outpace the EURJPY by this coming week's trading since the USD may gain some lost ground on a daily correction.

Techncial Perspective: EURJPY Cross

Daily EURJPY cross as of March 19 '12
 The earlier price reaction of the EURJPY form the previous week was more influenced by the USDJPY continuing price higher reaching the 84.16 high. While the late reaction came form the USD pulling back to the 79.67 low. The correlation of the Euro & the Sterling Pound vs. the USD would be directly affected more than that of the cross rates.
However, the daily market reaction after the fall would have a relative mix sentiments as contrary movements are being set-up for a temporary correction for the EURJPY heading south in line with the USD gaining lost ground and would affect the Japanese Yen including the GBPJPY cross rates respectively. The price movement heading lower on a daily basis would be within the week's trading towards the end of the quarter before the next high would be attempted. The support price level of 108.10 would serve as the crucial price and a probable retest on a lower candle wick would be nearer to the 108.62 daily Moving average. A slower volume build-up can be gauge with the momentum and volatility index during the mid-week as we draw closer to the end of the month.

Monday, March 12, 2012

Trending USDx - Major & Cross Rates

The USD has indeed reacted with the favorable reports on the NFP / jobs figures last week by continuing to move higher and touching its objective at the 80.05 from the low double bottom price of 7/8.09/10 levels.
Now that USDx 2nd bottom has been defined as a higher low for the USD. Of course, otherwise contradicted with another bearish fundamental along the way is another story.
The USD is on its way up with some daily pullbacks as shown on the opening week of March 12. The daily chart formation is neutral to bearish in the near term for the US Dollar. As it is being influenced by the Euro which somehow have curved a bottom low at the 1.3077 but not lower than the previous 1.3025 that served as the crucial support for the EURUSD at this writing. Please refer to our current market conditions where we have described the behavioral pattern and correlation movements of the USDx, EURUSD, GBPUSD and the EURGBP cross rate.
The importance of knowing this significant behavior is in relation to the succeeding patterns and set-ups that would arise in the weeks to come. We are towards the end of the 1st quarter of the year and the opening of the new 2nd quarter month of April. Now, if the cyclical pattern of this behavior would be followed from historical prices; the turning point for the USD would come between the first two weeks of April.
While the Euro's recovery would prove enough confidence in the market, where it has avoided a disorderly default of Greece somehow have settled down. There maybe some dark clouds looming in the air as far as oil prices are concerned, that would add pressure for the inflation numbers may well affect the precious metals for now. Pls. continue http://megatrade101.com/

Thursday, March 8, 2012

Current Market Conditions - Price evaluation

Let us start of with this saying...that history does repeat itself! In relation with the the current market condition, as we evaluated the price behavioral patterns and movements, we have concluded that the best correlation as far as currency pairs are concerned are the USDx, EURUSD, GBPUSD and the EURGBP respectively in this order.
On the technical view point, as mentioned in our previous market view report that the trading range for the USDx after touching a 78.09/10 2nd bottom would be a re-test of the 80.05 interim resistance after penetrating the 78.80 levels easily. For course this was triggered by the fundamentals of Fed Chairman Ben Bernanke testimony coupled with some good figures in consumer confidence plus some renewed volumes for the USD vs. the decline in the precious metals market. The guidelines for the USDx market movements are currently paused awaiting for the NFP numbers that would add to the confirmation of the trend direction for the week. As prices have moved in both directions from a low to the high and now at the low levels of 79.15 basis point for the USDx. Pls. continue ...article link: Market conditions 3.09

Wednesday, March 7, 2012

Technical Perspective: CABLE VS. USD

The weakness of the GBPUSD came with an abrupt decline last week after touching the 1.5990 major resistance trend line. This is considered to be a major correction on the daily as renewed selling pressure came from the USD rally beyond the 79.50 basis level and sustained it higher at the current price of 79.80. Again, the key prices to watch would be first the USDx market movements, the next level of support for the GBPUSD is at the 1.5640/50 range with an expected daily and session to session correction no higher than the 1.5820/80 levels. And probable extensions at the 1.5520/40 levels that may likewise serve as a trend line support for the weekly chart formation. Some consolidation would be found at these levels as the Euro & the USDx may find some levels of support and resistances between net ling and short traders readjusting positions at the continuation of the second week of trading activities. A weekly chart formation of these prices is still higher from its previous low at the 1.5230 last 01.13.12. Thus making these prices within the interim rising channel; well within a major trend lower.

Technical Perspective: EURO vs. USDx

The EURUSD continued its decline due to the uncertainty of the global market and the recovery of the USDx from last week's trading activity. On the technical perspective, a retest of the previous low of 1.3025 is currently open for assault as long as the rally for the USDx would continue with its current pace working at the 79.80 basis point nearing its 1st resistance level of 80.05.
The closing price for the week is critical now with the USDx registering a higher low at the 78.09/10 support area. This USD rally was triggered by the testimony of FED Chairman Ben Bernanke's quiet stance on QE3, US consumer confidence and renewed interest for USD flight to quality investor shifting from the previous metals dramatic plunge to its current low levels. Daily price corrective moves are expected but the overall market sentiments are still bearish. The 2nd level of support would be at the 1.2950/80 levels that may well meet some bids and long liquidation for most position traders still has a bullish GBPUSD outlook.

Monday, March 5, 2012

Market Analysis SRO -3.05

The USD have manage to gain grounds overall in spite of the mix reports especially coming from the weaker than expected ISM figures, Fed Chairman Ben Bernanke's testimony and some renewed interest after Gold plunged to its lowest price for the opening for the new month of March.
Position adjustments have gained pace as the USD rallied to its 79.50 basis point resistance level after easily penetrating the 78.85 within the closing day of Friday's trading. This however, was expected on the technical side after the USDx have touched its objective at the 78.09 support and finally supported the rally with some good reports from the market.
With that said, the USD would have to continue and close for this week above the range of 79.50-80.05 levels to have a healthier confirmation that the higher bottom for the USDx have been established. Although, it already looks to be the case, yet the the rapid increase and volatility it provided were simply to fast and attained it within a two day trading period. A gradual increase higher would make it steadier and not susceptible to run out of steam after profit taking activities at the closing of Friday the 2 of March. The Commitment of Traders Report (COT) would provide a clearer perspective in actual figures that would include the VOI for the USDx alongside the financial futures. Anticipating some renewed interest may prove the rally to be stronger both on the fundamental and well supported by the technical indicators. Although, any price above the the USDx closing for the week of March 09 would be actual signal to be watching for.
The day-to-day activity would be limited to the trading range below the resistance of 79.50  with some probable extensions nearing the 80.00 basis point. This would have a wider effect on price fluctuation on both directions for the majors likewise the cross rates during the first three days of the opening trade.
Continue on link: http://megatrade101.com/megatrade101/market-view

Friday, March 2, 2012

Technical Perspective: CHFJPY Cross next after EURJPY

CHFJPY CROSS as of Mch 02, 2012
 After booking the EURJPY, the CHFJPY cross rate, is now in focus since the price behavior for the USDx have finally touched its objective of 78.09 price gap low registered on the opening trading of the US session. And have moved higher prompting the USDCHF to recover from its low of 0.8929. In our market view and analysis on the CHFJPY cross dated the 1.26; this position is in line alongside with the weekly EURJPY cross & the CHFJPY weekly charts as shown encircled the three bar Trend Reversal / Inverted Hammer candle bars that signified the reversal pattern are identical. However, the 89.52 corrective move as of this writing is likewise still within the higher trend as a price reversal but not necessarily a trend reversal. A trailing order to protect the floating gains accumulated and may consider a cross trade to be able to maximize and take a correlated advantage of its correction with the USDCHF currency pair vs. the cross rate since the BOJ policy is still maintained at the same time the USD is gradually gaining as of this Friday's movement. The closing prices for the currency pairs and the cross rate is what needs to be carefully watched moving forward the next trading weeks ahead. Pls. refer to the supporting video for the EURJPY Cross " The Process of Booking a Forex Trade-LIVE" for a comparative analysis & a better understanding of the similarities of the trade positions.