Friday, June 29, 2012

EURO Aftermath!

EURGBP as of June 29, 2012
Indeed, the EU summit turned out to be favorable for the EURUSD and have spilled over to the EURGBP cross rate which we have speculated would likewise move contrary from the past few days.
The positive results with the EU leaders to boost banks from the funds and concentrate on growth as their main agenda have provide the extra confidence in the market place. Thus, triggering a rally for the EURUSD at the current price of 1.2638 and 0.8077 respectively for the EURGBP cross rate. The earlier postion on the EURGBP ( shown below) as of June 28 have resulted to a floating gain overall. As the market place before the news came was so negative not only in market sentiments but volumes, open interest and prices were so low that it signified a possible turn contrary to it previous trend. This is the kind of market behavior that persist and are susceptible for a spook in the market place before and after a major event. However, the USDx have opened with a daily gap lower and still heading lower at the early trading signaling a price reversal and major correction from its previous closing. Follow through short-covering at the closing month's trade is actually happening triggering a mass rapid price movement.

Wednesday, June 27, 2012

Technical Perspective: EURO & EURGBP Cross

EURGBP DAILY 6.28
Update as of June 28: With the volatility of an uncertain market have pushed the Euro lower spilling over to the EURGBP cross establishing a low at our initial objective at 0.7983. This was also in line with the Euro holding at the 1.2440 technical support price from the charts. Traders reluctance to short at these levels were non-existence but likewise hesitant to buy until any real direction from the EU summit would provide a good signal. However, a pre-calculated risk of a short term trade based on our recent post of trading in the beginning of the trading session and creating a counter-trend ( price reversal) at the mid-week have proven to be effective with the appropriate timing. Price guides have to be established first as the recent short on the EURUSD earlier have been settled along with the GBPCHF cross on the correction. While securing a counter trend position with the EURGBP on the way up. Although, this is more speculative; but serves as a protective position for any gains from both earlier positions as mentioned in our June 25 marketview analysis. Daily extensions on the high on a session to session would be at the 0.8045/60 and on the low would be minimal risk price of 0.7950 dated May 16, 2012. However, price action would depend on the momentum and price behavior towards the end of the week's trading and news reports.


EURO DAILY 6.28
Update as of June 28: The EURUSD have stretched its limits more towards the 1.2440 low where it met some short-covering among speculative trades. High frequency trades were noticed among institutions taking every advantage of the price action. Although, seen limited to short trades as a counter-trend play is at work during the closing of the mid-week's trading. There will always be some corrective move but still can not be treated as reversal points. As the EURUSD have been squeezed with the recent daily move of the GBPUSD when it moved to the previous day's high at 1.5645 and covered back its gains yesterday with a move back lower from where it started at 1.5550/62.
Currently working at the 1.2510/15 levels as of this writing, the EURUSD awaits any fundamental reports this end of the week and month's trading for a clearer direction for Euro traders. Please take note that being able to trade alongside with secondary markets would not limit the trader to take full advantage of price volatility. Although, weighning risk / reward ration should always be pre-calculated with due diligence in identifying the next probable currency to trade.

Tuesday, June 26, 2012

Technical Perspective: GBPCHF

GBPCHF CROSS as of June 26, 2012
As a matter of due diligence; it would be good to check what the USDx levels were when the EURUSD was at the 1.2380 and compare it with the GBPUSD & the USDCHF. As a contrary strategy to the EURUSD position above is to be able to sustain this position by using the GBPCHF cross rate as the chosen pair which is in line with the USD continued recovery from its previous correction. Likewise, such a strategy would absorb any adverse price fluctuation in both directions as a cautionary position while maximizing the market potential for a USD rally in the medium term time frame.
Although, the technical outlook remains bearish due to the daily double top formation, not to mention a triple top high at the 1.4968 which serves as the 1st resistance price levels for the sessiion to session trading. While the relative support at 1.4920/25 should be well intact as the USDx moves higher and USDCHF may remain at its current levels but not lower than the support at the 0.9575.
The higher lows ascending to a steeper trend defines its bullish mid-term rally inspite of the technical resistance. Extensions to the high would be viewed at the 1st level of 1.5035/50 within the mid-week. Meanwhile, R2 would be at the range of 1.5150 - 1.5200 once volume builds for a continued USD rally. Session to session pullback reactions would also be expected as corrective moves no lower than the 1.4920 would be ideal for a medium term trade plan.And this would also serve as a position hedge versus any USD decline which would influence and delay the Euro's eventual downtrend.

Monday, June 25, 2012

Pessimism Persist - EUR & GBP vs. DXY

The uncertainty for the European / Soverign Debt crisis, Moody's bank downgrades and the backdrop of Spain & Italy's problems have weigh much longer in the market; while the focus on the coming June 28 summit are making investors more weary of any real resolutions. 
George Soros comments for a workable resolution are well being discussed as a political, fiscal and bank union would place some stability in the financial markets. Although, Germany's Angela Merkel's continued resistance of the EFSF (European Financial Stability Fund) to immediately take over the ECB's holdings of Greek bonds and would not be able to help relieve Spain and Italy from the jump in their borrowing costs.
These would add more volatility in the market meanwhile volume transactions would persist to move lower until a clearer direction would be seen and felt in the market place. Meanwhile, the major reports for the week are seen as a possible catalyst as to where the actual market direction for the USD and the Euro would take. US Consumer confidence, Durable Goods, Home sales and the GDP figures on top of the University of Michigan Confidence makes up the list for the US side; while the succeeding German unemployment figures, and the UK Gross Domestic Product will take the lead for the European market.
EURUSD DAILY AS OF 6.25
Now with that said, let us take a look and analize how the technical charts coincides with the fundamentals. The behavioral market patterns of prices have been induced by traders and mainstreet investors to the direction as perceived by how the market has been reacting to the European debt crisis. The single currency of the Euro has taken the lead as prices continue to move lower and currently at the 1.2480 as of this writing. In our June 18 market view that prices were still within the rising channel but the prices have moved outside of that channel; thus the market heading south to the 1.2380 is now in the making. Likewise, the confirmation of Cable breaking the 1.5580 price support has signaled a longer term bear market that may turn market participants into hysteria mode. This has placed the US Dollar in a better footing still retaining its crown as the World's Reserve Currency. And remains to have enough room for the next leg higher as the 80.05 - 80.89 basis point range has held from the previous trading actions from its correction. As a matter of due diligence; it would be good to check what the USDx levels were when the EURUSD was at the 1.2380 and compare it with the GBPUSD. It is equally important to watch the closing price levels of these three major pairs and relatively compare it to the closing of the USDx at the end of this 2nd quarter and the opening price levels on the first trading day of the 3rd quarter where the outcome of the June 28 summit meeting would result-into. Unless a market spook would occur before or after the EU summit over the weekend as it is ripe to turn itself into an extreme hysteria market.




Monday, June 18, 2012

Market Action & Analysis

Welcoming the election results initially weighed good as a matter of market relief has somehow calmed the 1st trading day of the week. Yet volatility remains a primary concern for investors and traders alike which resulted for price action to radically counter the opening prices higher for the Euro. As the EURUSD drifted lower and weighed heavily on the EURGBP cross.
Market sensitivity and vulnerability have been the culprit for a cross whipsaw of the majors and cross rates. The bearish price action for the Euro and EURGBP cross remains at the low range of the day at 1.2580 and 0.8025 levels respectively. With US trading session prices recovering from it lows. However, please be aware that such prices moving lower across the European majors still holds their higher lows significantly from the previous weeks trading. Thus, reminding us that daily pullbacks, although negative sentiments prevail; prices are within a mid-term rising channel. The lower extensions beyond current prices would re-assault the 1st lower band at 0.7985 and 0.7885 range levels whenever the sentiments for the Euro remains below the 1.2380 or lower. While the Cable / Pound Sterling higher lows would remain at pace with the EURUSD. The 1.5732 registered rally high for now have top-out while 1.5580 Moving average levels remains the initial support(S1) levels.
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Friday, June 15, 2012

Technical Strategy: GBP vs. EURGBP

The strategy of the trade in choosing the GBPUSD pair is simply to protect the two previous positions on the EURGBP cross rate from the previous market view report dated the 11th of June. This will likewise absorb any adverse price fluctuation over the weekend where market price action would unexpectedly be volatile. With the rising channel for the GBPUSD well intact the prices have recovered and past the first resistance level of 1.5610/20 while ignoring the fundamentally bearish report of the widening trade deficit of the UK earlier reported. While US Consumer confidence have dropped prompting the USDx to go below the 81.78 level ist defense of support. The closing price for the wekk would be carefully watched.
However, the mid-term corrective move may well be within its bearish trend line the next extension levels we would be expecting is at the 1.5720/50. While support is now well within the 1.5550/60 opening price levels for the week. A protective order on both currency pairs are in place within the next few hours of the trading week to overall settle all positions and wait for the outcome over the weekend. Since a net positive result is already made the probability to leave them open with uncertainty on the fundamental over the weekend would be unwise. However, the last trading hour would still be the best time and still see how the market would be reacting in anticipation for the weekend.

Thursday, June 14, 2012

Battle of the Decade!

Let's get ready to crumble*!
Trading the forex market for over 2 and a half decades have never been as dramatic as a concerted central bank intervention ever stand-out in the mainstream even before the battle have started.
The aim of stabilizing a global financial market in an orderly fashion has always been the main objective, making certain that fresh cash liquidity would always be present in the market place. This was indeed a learning lesson from the credit crunch during the Lehman Brothers debacle and the Housing bubble. And would serve as the one of the most important strategy being applied today in a worst case scenario.
Weighing the factors of a Greek election, an emergency meeting of Finance ministers from the G7 nations could be held on Monday / Tuesday depending on the severity of the market response following this weekend’s elections were the highlights in the news wire. Not to mention the readiness between the Federal Reserve, and the ECB in providing the liquidity infusion needed in any eventuality and an IMF sanction for a Japanese intervention efforts are all being taken up in the unfortunate event of a financial meltdown. And how often do we get the real chance of being in one is another thing to think about. One of the most memorable events that occurred was the concerted central bank intervention, please refer to:
With that said, the financial big wigs are in it to win it! With their arsenal of leverage trading and the ability of a High frequency trading would make things worst or better than what it is today. As more low to high latency trading software and hardware are being built while main street investors try to catch the tail of the storm in any given market timing. Meanwhile, the law of supply and demand in the free market arena has never been so tightly contested on who has the better trading system's analysis.
And this is the addition on top of the Political turmoil that has disrupted the behavior, market sentiments and volumes of transactions of investors/traders in the financial market which would be harder to keep track of in a rapidly growing market volatility. Systems failure, delays and price transparency would be re-tested time and again. Although, market strategies would be well in place and better-off for those who apply a stringent and plausible trade position that could weather the storm whenever the case may be. Thus, permitting us to outlive this would-be turmoil and cultivate it in a lucrative manner at the end of the day is the best.

*crumble: British and Irish (European origin) that can be made into a sweet or savoury version.

Tuesday, June 12, 2012

Forex LIVE: DXY- 6 Majors & Gold



MEGATRADE101.COM - MARKET VIEW ANALYSIS


Here is a comparative analysis of the Forex Market primarily focused on the US Dollar Index, 6 majors including Gold. The analysis provides the behavioral price movemets of the USD vs. the CHF & Euro in particular due to the opening price gap from the closing prices and discrepancies that affects how prices would react. Price behavior should well be clear that there is indeed a discrepancy with most charting systems that does not truly reflect it on the charts.

Sunday, June 10, 2012

Identify: Forex Price Gap & Discrepancy

Opening price gaps commonly occurs with an eventful outcome normally associated with a fundamental factor affecting price difference from a previous closing price. As such a substantial price fluctuation do occur in between trading sessions. One such typical example is the present market situation carried out the opening trading week in Asia and the next trading sessions between Europe and the North American trading sessions. The substantial rescue package as some have termed a bailout-lite which turned out to be a remarkable $125B for banks in Spain over the weekend have contributed to the market's calmness in the opening trading week in Asia. However, it seemed to have lost steam as doubts continue to linger over the market prices as it slowly moves lower. This is expected as the price gap warrants a technical correction.
However, the price behavior should well be clear that there is indeed a price discrepancy with most charting systems that is not truly reflected on the charts over a weekend period. For those with enough market knowledge and market trading experiences, such discrepancy would not go unnoticed; especially as it occurs across the board. Relatively making trading and market analysis for the newer traders indecisively harder to dissect. And hopefully that the applied technical analysis and approach to trading would prove to be helpful from this article and analysis that MegaTrade101 provides.

In Focus: EURGBP
Daily EURGBP Fig.1
Daily Closing Price for the week ending June 08 is 0.8085 contrary to the weekly closing price of 0.8137. The 0.8137 price should not be reflected on the closing price of the previous week ending June 08 as it is the opening price gap for the start of the trading week in Asia.

As follows: O=0.8075 H=0.8140 L=0.8050 C=0.8085 which is identified as a 10 pt. body with a 90 pts high wick and a 25 pt wick low. Based on the OHLC weekly prices gathered and shown on our price page indicator.
And not as shown on the present weekly figure 2 below with an O=0.8075 H=0.8150 high L=0.8050 Low and a C=0.8137 
with a 62 pt body and a 13 pt. wick high.



Weekly EURGBP Fig. 2
We have expanded the weekly candlestick bar formation for a better view of such discrepancy as shown of figure 2 and compare it with the daily chart above.

NOTE: Please check weekly price chart and compare it with the daily chart here to show the discrepancy in the closing prices and reflects the true market sentiments that transformed over the weekend's news report.

By doing so, the weekly chart would not truly reflect market price action but an unclear & dis-illusion of the candlestick charting system for some traders. This is one of the system flaws that has not have been modified to date and quite a popular trading tool to use. It still is as long as one should know what is truly right and can identify the flaws.
Thus keeping us at MegaTrade101.com abreast with the weekly opening in Asia towards the Closing price in New York until all trading bank sessions are done. We would consider a 10-15 pip spread difference as possible slippage at times but not a huge discrepancy such as this in spite of our favorable outstanding long position with the EURGBP cross.
As a mater of due diligence pls refer to your charts and compare this application with the other majors and cross rates and see if you can discover the same. And would appreciate a feedback by email at info@megatrade101.com

Tuesday, June 5, 2012

FX Trade Analysis: Series 3

CCY in Focus: USDX - USDCHF & EURGBP continuing Trade Analysis
Classic Cross Trade Strategy based on Price behavior and action.

Trend Following : Classic Bull Run for USD/CHF & EURGBP General Outlook
Applied Analysis: Long Position through mid-term with variable trailing adjustments on prices for the USDx, EURGBP cross rate and the USDCHF against any adverse fundamental price action affecting the correlated currency pairs. For now, price action and behavioral patterns reflect price swings to whipsaw in both directions on a daily basis. No visible set-ups that identifies the next probable trade except to follow the price trend and reversal whether they be on a short temporary basis.

On Fundamentals: Watch List on the EU Zone crisis, UK, Spain and Italy particularly the G7 meeting. Although, pessimism prevails with investors until some renewed confidence can be resolved over in the Euro Zone. Most reports would be limited to price action justifying the movement in the market. Relative Reports to consider are Oil & the Precious metals Market

On Technicals: A stronger emphasis on the Candlestick Chart/ Bar formation, Daily Opening Gaps, mid-week price action, changes in relative strength index with the Stochastics. But more importantly daily price trading range between HI/LO that makes up the session to session net changes for the day.And the overall behavior of the major pairs relatively in comparison with the Volume and Open Interest on the Financial and commodity Futures including oil and gold prices. Please continue on our website Market View

Friday, June 1, 2012

Market Perspective: USDX - EURGBP

The jobs numbers were obviously not as favorable for bulls as they would have expected. With barely a 69k jobs created for the period and while the the EZone unemployment rate climbed to 11% had the mixed price reaction from the majors.
Noting that the USDx indeed made a corrective move lower at the 82.65 low for the day this would simply be taken as a fraction of the rally which established an 18 month high for the US Dollar marking an 83.55 high for the week. The over-lapping new trading day for the new month of June would establish another mix price reaction from both directions yet the primary trend remains to be bullish for the USD. On the technical side, a new consolidation period within the trading ranges of 83.50 with extensions as high as 84.05 and a low of 81.89 would be at play before a resumption of the rally.
Daily pull-backs would be limited to the specific currency pairs; although the direct correlation would be focused on the Euro,the Pound Sterling, Swiss Franc and the Japanese Yen. However, the focus on the EURGBP cross rate may well be the next probable market to check as the 0.7950 has held well enough from the 2nd attempt lower.
Finding some earlier bids from institutional players at the 0.7970 were well kept in place, while currently working at the 0.8059 recovery price with a swing high at the 0.8775/80 range we mentioned before. No such confirmation can be called as of this writing, but this recovery period may be encouraging for mid-term trade positions and to watch its development alongside with the behavioral price action of the Euro and the US Dollar.