Opening Market Insight for 8.12

Consistency & Protective Strategies on Effective Trade Positions:

The US Dollar has lost ground across the board for the past four weeks with only a week of recovery seen on the last week of July. As we have perceived that the US debacle is relatively not over yet; unless US retail sales and consumer confidence figures scheduled within the week would essentially provide some lifeline that would potentially give a boost of confidence for the safe haven currency.

Opening Market Insight for 8.12

Trend Following: Chart OVERLAY ANALYSIS: EUR GBP USD.5 31

This is an update supporting our Market view analysis: OVERLAY ANALYSIS: EURGBP Cross-EURO vs. USD Index Confirms: Breakout dated: May 21,2013

An Effective Analysis vs. Contrarian Theory in Forex

Forex Price Equilibrium

Its that time of the cycle year when we have to do some due diligence analysis as to where and how global prices of world currency rates fair compared down to the very basic commodity prices. However, the balance of trade amongst the largest economies and emerging markets worldwide are taking up necessary steps & measures avoiding going back to recessionary periods and the global financial crisis of the past. Austerity programs in the European continent is underway with Political policy changes to go alongside with it. Although, the crisis has now rekindled previous resolutions that would try to resolve other European neighboring crisis in other countries have again retested investors confidence in the financial marketplace. This is on top of the Middle-East uncertainty from the Iranian sanctions to the political crisis in Syria with China and Russia pulling their veto strings towards a possible resolution.

With the three major economies deploying strategies like the US QE measures, Japan's repurchasing programs and a slowdown in China has kept a slow global growth indicating investors to do the same in terms of trading activities. Thus making liquidity flowing in the financial markets across the global economies. But even with these measures the trading volumes have declined while investors shifting to the world's Reserve currency and US Dow Jones have reached its current levels in this kind of economic conditions.

The foreign exchange market prices have come to another pivotal point in time where current prices are now at the verge of global price re-alignment in the forex market or in simple terms an equilibrium level where prices would have to re-adjust through market forces before a major market movement would occur contrary to or a continuation of its current trend. There will always be a major corrective move within any major trend either way on its way up or down. Pls. observe the prices of the EURO, EURGBP cross and the USDx price levels dated September 13, 2010 in this article / video and compare the price levels currently in today's markets. The indicators used are one and the same and should assist in being able to determine as to which direction the markets would probably bring to the table for the next best currency to trade within the upcoming major price fluctuation.
Related article: Before a major market action occurs 
                   : FX Trends & Market Opportunities

Note on FB

Everyone got hooked or spooked on FB IPO? But as of now FB has set the benchmark for social networks. Dare to be different from the rest of the pack is what makes one unique. Although, we can't statisfy everyone in the world but some do make it to the winning side of the 1% group. A mere 15% were allocated for mainstreet investors. So watch where money and investment flow from hereunto!
Just a matter of food for thought!

Trend Analysis on Majors & Cross rates

GBPJPY & EURJPY

The two previous market analysis has viewed FX prices widened considerably with the GBPUSD and the Japanese Yen both gaining against the USD.

With mixed reports from the Fed QE3 and the more negative GDP numbers last week where the USDx closed lower at a vulnerable support price of 78.80. The USD thus far has continued to weaken without any real signs of a recovery unless proven otherwise with a surprising end month closing and opening for the month of May.

Although, currently due to the month end trading activity the USD has found some relief rally and position adjustments after Friday's GDP bearish report. Prompting today's recovery are some bids for safer-haven trades as dampened risk-appetite, mainly due to Spain in recession. And a mixed report from the U.S, personal spending dropped from 0.9% in February to 0.3% in March, while personal income ticked 0.1 percent higher from 0.3% in February, on the other hand, Chicago purchasing managers index dropped sharply to a 56.2 from 62.2 in February.

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Pivotal Price & Trend

USDx - EUR & GBP

True enough just right after the corrective move lower from the USDx registered "Higher Low" at the 78.09/10-78.80 trading range the expected recovery rally for the USD is on its way.

This was in line with our time frame / period market outlook / analysis dated the 12th of March "USDx 1st quarter to April Analysis" where a turn around would re-establish a USD recovery back to its original trend. A follow-through is likewise expected from hereunto with daily temporary pullbacks. Thus the next probable high would be made with the next trading weeks ahead. Extensions as previously described from the video from the support price of 78.80 basis point would initially target its high at the 80.40 - 81.80 before a retest above the 81.85-82.05 price point resistance levels.

This would correspond with the Pivotal price reversal of the USDX last marked in our CCY Price page indicator for the week ending March 2nd and followed by the European Majors thereafter. The high of 1.3485 for the EURUSD was first marked, likewise on the same week ending March 2nd. However, the GBPUSD did made a higher extension at 1.6036 on the last week of trading for the 1st Quarter which came in only second & keeping pace with the Euro. The last trading for the week of April 06 have showed some unwinding of positions due to a mix report but more favorable for the USDx to rally ending slightly below the 80.00 important level closing at 78.85 basis point. On the technical Perspective; the Daily three(3) rising method bar configuration with the fourth candle bar closing at the 79.85 is a bullish signal. Please continue at http://megatrade101.com/

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.
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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. 

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.
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In Focus: US Dollar Index (78.09 low)



USDX as of FEB 29, 2012



The USD Index has obtained its objective with an opening price of 78.10 today the 29th trading day of February. There has been a mixture of reports from the US. On the technical perspective, the price gap from Thursdays closing of 78.22 would make the trade for a temporary recovery as a relief from its recent declines.

This most recent price of 78.09 low may well be still a signal that further declines can be expected for the USDx in the trading range of 77.90 - 78.85 basis point. The adjusted and nearest resistance is now at 78.85. Failure for the USD to recover and try to seek a price consolidation near these bottom ranges would still be vulnerable for declines unless certain fundamental reports to support the USD would state otherwise. FED Chairman Ben Bernanke's testimony would be carefully watched for market direction in the next couple of days.

Market Analysis - SRO 2.28

Amidst the up coming reports as listed below, the volatility from the previous week have led investors, institutions and speculative traders amongst main-street investors alike winding down market actions.

EURO as of Feb 28, 2012

Despite of some good news from the housing sector did very little to further push the USD above its recent declines. The USDx measured at the 78.50 basis point level is still vulnerable for a continued decline especially coming from a low of 78.20 levels and the unexpected rally of the S&P last Friday.The crucial statements that would be watched would be the statements of Fed Chairman Ben Bernanke towards the end of the week.

Meanwhile,the Euro's resiliency to hold above the 1.3250 - 1.3360 range is symbolic contrary to the other reports between Greece sustain conditions and the G20's meeting held in Mexico in maintaining and likewise supporting a stability of the financial markets through the IMF. Although, traders who has also maintained their bias bearish opinion have indeed suffered from its rally specially after coming from a 1.2970 extension low and currently working at the 1.3430 corrective move. On the Technical side, the Euro and the GBPUSD is well in line with the USDx move which targeted its 1st objective reaching a low of 78.20 not too far off from our price call at 78.05/10 levels. For a complete report click on the link: http://megatrade101.com/megatrade101/market-view

USDX continues its weakness!

With reference to our Feb. 01, 2012 market outlook and analysis of the USDx the objective for the downside would be in the range of 77.95-78.05/10 where the USD may find some level of support. Breaking the more important 78.80 is crucial. As mentioned that as long as the USDx for the weeks ending the 17th &  24th of February 2012; would not close above and beyond the levels of 79.50-80.10 basis point. Then the directional trend lower would have to continue. Please refer to our USDX Down market analysis dated the 1th of February. The effective technical tools applied in the above chart are the FIBONACCI RISING FAN & retracement, channel resistance / support, STOCH/ RSI COMBINATION & MOVING AVERAGES on a daily CANDLESTICK CHART. including a series of analysis and positions taken in the market from January 26 has led to the finality of the trades made.

FOREX:Trend Following EUR-GBP-USDx & crosses

Weighing fundamental factors now will define risk, volatility and market sentiments by investor / traders in the foreign exchange and stock markets respectively. Not withstanding the other equally important highlights but the most crucial reports amongst them not necessarily in its order, obviously are the final countdown on the Greece debt crisis, the Politically sensitive effects on Iran with the oil markets that would have a direct impact with the US dollar, commodity prices and the current market outlook for the precious metals. 

With that said, our stand on these issues would outweigh majority of the market's ability to define its directional price movements for the next trading sessions towards the closing days of the month of February. Although, we still remain with the same market outlook as a matter of following these series of events and market directional prices movements when we have called them based from our market view analysis since the end of January 2012.

A corrective move for the USD no higher than the trading range between 79.50 to 81.05/10 basis point and a trend continuing price level moving lower thereafter. Currently, working at the 79.05 while corresponding price for the EURUSD at 1.3227, opening higher at 1.3220 from last Friday's closing at 1.3155 which is a gap price of 65 pips as a market reaction from the current news wires for Greece before the European opening since today in the US we are celebrating President's day holiday as well.

Meanwhile, the GBPUSD has indeed held true towards the previous week's corrective movements alongside the Euro which led a change or hands and position shifting by some as the market has traded with a wider price fluctuation. Currently at 1.5842 filling in the daily opening gap levels in Asia have supported the EURGBP cross well above the key support levels of 0.8290-0.8305 levels. The markets ability to trade and gained back it corrective move have caused a lot so short-covering and stop loss on both sides of the market. Traders who held shorts on the way up towards the 1.5880 and 1.3320 respectively have lost unfortunately entries to buy then suffered while both majors corrected lower at 1.5640 and 1.2968 lows from the prior week.
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FOREX: 10 KEYPOINTS

How to Analyze the Analysis

Analysis from market reports can sometimes be confusing for others. The credibility of such reports should well be categorized in their simplest form.

News reports of actual events can and will always be easily related to, since they are indeed actual current events. Being able to relate information compiled or read through while comparing them with actual working graphs that depicts the reason or reasons why prices reacts from these reports is another side of the equation.

In most cases, analyst or financial writers/ traders for that matter would then summarize their respective view points on how they perceive the markets and react accordingly towards it by way of positions taken or not in the market place. Equally more important are for investor/ traders who uses these information alongside their knowledge of interpretation and tools of the trade, to be able to gain from the market movements in exchange for the risk/ tolerance that they are willing to take while literally exposing their investment funds on trade at a given period of time.

However, trading the forex market considers a little more due diligence since the correlation with one another would have to weigh together with other fundamentals that affects the prices worldwide. The ever growing retail broker's coverage of the expanded major currency pairs viewed and summarized by more than a hand-full of currency analyst, strategist and quant analyst making their point across the wires especially coursed-through the Internet channels can equally be compounded.

Therefore, as a matter of guide we have listed below at least 10 key-points to better understand in simplest form; how not to over analyze the analysis whenever taking into consideration related articles on analysis either they be technical orientations in nature or fundamentally related reports. The ultimate decision would have to be totally independent and not be influenced with how an analysis is best presented intellectually or with sophistication. It still boils down to clear transparency in content substance. There are only two positions to choose from which is either to buy or sell.

Link: 10 KEY POINTS: (Not necessarily in order)

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STRATEGIC FX TRADING TECHNIQUES

USD Trend Continues

The US dollar lost its closing recovery steam after the closing Friday and continued its weakness in the European session heading for the North American trading. The US dollar index have lost ground and currently working at the 73.65 basis point. A breakout of its trading range would occur soon enough, although when the exact breaking point would be difficult to anticipate. The vulnerable 72.90 would be easily taken out as the corresponding European majors likewise continues to rally on. 

Meanwhile, the EURUSD and the GBPUSD also headed higher currently at the 1.4471 and 1.6560 respectively; gaining momentum towards the start of the week's trading. The average swing trading range on a daily basis within the past weeks have maintained at least between 100-150 easily. Where a struggle between bulls and bears can be seen in the price behavior. A break higher for the GBPUSD and EURUSD would not be surprising the way price behavior is moving at current pace. So far the European pairs are taking the lead targeting the previous registered highs from the past month of June at the 1.4650-90 levels and 1.6720 levels respectively. Momentum and volume build up would trigger this targets. 

Technical bull spreads between the Euro and Pound can be seen more during the closing movements of the past weeks; as the struggle between the institutional and speculative players have been mixed. A European or an American shake out would occur before the actual break of the trading range. A confirmation and follow through from the prices higher for the daily Euro would justify its complex daily inverted head and shoulders formation and a weekly bull chart still intact for this move. However, the likely scenario and market conditions is more towards the GBPUSD.

This has been keeping the EURGBP cross at bay and maintain a stronger psychological support price at the 0.8660 firm. With a low risk tolerance levels at current prices of 0.8721; an anticipated move lower still would not be discounted as the candlestick formations are not as convincing as the GBPUSD in itself. Although. the overall picture for the EURGBP cross is still bearish from its previous highs of 0.8880 resistance price. Earlier shorts at the 0.8990 high would may well prove to be the major resistance chart and price wise.   

Trading Exceptional Times

These are obviously exceptional times in trading the foreign exchange markets. As we all have heard the different yet negative bottom line scenarios from the Earthquake Disaster in Japan; how investors reacted to the price fluctuation of the USDJPY, the Sovereign debt crisis in Europe with Greece, Italy and Spain; with the ECB previous rate decisions to purchasing Government Bonds to ease the contagion effects on the EURUSD. And now with the S&P's downgrade for the US have left almost all financial markets from Stocks in the red. 

These are exceptional times particularly in trading the financial markets; where the volatility index have reached their highs and where investors loss of confidence is overwhelmingly felt worldwide which can be seen on the market's performances worldwide. How does one investor and trader prepare to trade during these times of uncertainty? That is just one of the many questions that needs to be address before making any trading decision. 

Focusing on the Foreign Exchange market takes more than simply buying/selling a currency pair. As the correlations and other factors affecting them are tied up to a lot of current global issues. Whenever such issues are 'Politically oriented and influenced' do expect an increase in volatility and a roller coaster ride from the three major markets. However, with these clouds of uncertainty hoovering in the air; the distinct advantage for those who has the conviction and the unbias outlook /analysis may well be in a better position to focus and sees a clearer perspective of the market trends. There will always be conflicting factors, thus making price swings erratically. Price behavior dictates price action as a response or a mere reflection of outside / fundamental factors. Market psychology does have an important role isolated from both technical and ffundamental analysis. And this can only be found on studying the price movements and behavioral patterns reflected by prices.        

Price Page Indicator's Market Psychology

The signals derived from the Price Page Indicator that has again proven its reliability from where the basis of the trade positions had taken shape even before the remarks from the ECB holding rates unchanged came about. The so called rumor from Greece's intentions of pulling out from the Euro currency really had no bearing except that it was highlighted by some analyst to justify the market's movement. There are apparently more real factors that contributed to the dramatic drop that was not expected as it accelerated its downward momentum during the closing of last week's movement.

We still maintain our current position to on both cross rates; GBPJPY & EURJPY to gain momentum on its downward direction for the week. Although, some conflicting signals would occur within the major trend. The near term movements would react with more volatility and wide price fluctuations as major institutions would simply eliminate small speculative investors from the market. A convincing follow-through price momentum towards the upcoming Consumer Price Index (CPI) and the University of Michigan's Confidence figure would more likely be mixed but would also have a friendlier net effect for the USDX in the long run. Then this would reaffirm and gain more interest for US Dollar bulls.

The news of S&P's downgrade for Greece & Portugal's contagion effects looming in the air has taken the highlights on the news. Not to mention the debt and trade deficits of what the US is facing is a battle cry for every trader's choices as to what the direction of the market would be in the coming trading days. After a Euphoria market, chaos and confusion on market directions takes place. This is where market psychology takes into account the market behavior from past experience in trading these volatile market.

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