In many ways an extraordinary day - particularly for the AUD/USD which has posted a huge candle on the daily chart. In fact the three main USD pairs David & I follow, namely the EUR/USD/ GBP/USD & AUD/USD have all ended in positive territory - with the Aussie the clear leader!!
All three have, of course, benefited from relentless USD selling, and for a view of whether this is set to continue we will have to wait for tomorrow's advance GDP release and also the FOMC. The USD is certainly over extended on the medium term time frames (30 and 60 min) as can be seen on the currency strength indicator alongside the chart above. However, as we've seen with the Aussie today, a currency can stay over extended for very long periods of time. In the higher time frames there is still some room for the USD to fall even further. Indeed the monthly chart for the USD index is...
USD Weakness Continues to Drive Cable
USD weakness continues to drive Cable higher. GBP/USD rallies steadily. This reflects dollar selling pressure. Traders see bullish momentum in the pound against the greenback.
Cable selling off sharply on the back of poor GDP figure falling to a low of 1.5176, but recovering sharply and back over key support at 1.5220, and with USD continuing to look weak no reason why it cable can't continue higher. It has already touched 1.5260 & beyond this price level we are then looking at 1.53 and beyond.
This afternoon we have the CB consumer confidence release at 2.00 pm London. USD weakness has also played its part in these moves.
USD index is now the one to watch - running into the release and also ahead of tomorrow's FOMC.
Volume Price Analysis Confirmation
Volume price analysis (VPA) confirms the drive. Rising prices with increasing volume show buying conviction. Low volume pullbacks signal weakness in sellers. Quantum currency strength indicator ranks GBP high...
Ahead of the German ZEW data this morning, markets are positioning for a move in the euro dollar, with the euro now heavily oversold and the US dollar equally over bought in the faster timeframes. Using the currency strength indicator in multiple timeframes provides a fast and visual picture of currency strength and weakness, with the euro (the gold line) now deeply oversold from the the 5 minute to the 30 minute timeframe, and preparing to reverse the longer term bearish sentiment ahead of the news. Apart from the ZEW, the only other ongoing euro news is of course Greece which continues to weigh on the single currency.
Finally remember that any market or currency can remain over extended for some time, and as always patience is the key coupled with the price action on the charts. The currency strength indicator is always the starting point to identify potential strength and weakness in an individual currency. Then it's time to consider...
As the markets get under way in London this morning, and with a relatively thin day for fundamental news, the US dollar is once again advancing on the fast time frame charts and providing some excellent intraday scalping opportunities across the currency majors. Both the British pound and the euro have been selling off sharply against the US dollar, with the currency strength indicator on the 15 minute timeframe showing the US dollar, the red line rising firmly and moving towards the overbought region, with the euro (orange) and the pound (yellow) both moving strongly lower along with the Swiss franc (green).
The chart alongside is of the GBP/USD in a slightly slower time frame (30m) and reflecting the current bearish sentiment at present for this pair, with the Trend Monitor at the bottom of the chart remaining firmly red, with the current volume rising, and confirming the current move lower. In addition, Cable is now breaking below the recent platform...
Terrific Trend on the EUR/AUD This Morning
A terrific trend unfolded on EUR/AUD this morning. This cross pair delivered strong momentum. Price moved steadily higher. The London session amplified it. Traders spotted clear opportunities.
In this morning's forex trading session with Anna and David, one of the currency pairs they focused on was the EUR/AUD, which was the strongest-performing currency pair in the currency matrix. The 60-minute currency strength indicator confirmed the longer-term position, with the euro (the orange line) climbing strongly towards the overbought region on the indicator, with the Aussie dollar ( the blue line) moving firmly towards the oversold region in this timeframe.
The 5-minute chart alongside reflects the trend, with the trend monitor maintaining the bullish picture, and only moving into a transitional colour during the minor congestion periods. The trend monitor sister indicator, the trend dots, completes the picture and highlights these congestion phases in advance.
Volumes throughout the move were in agreement and confirming the bullish sentiment for...
Question
Hi Anna, Firstly, I just wanted to say I've just finished "Forex For Beginners" and I thoroughly enjoyed the book; I found it extremely helpful and useful. Opened my first forex account on Friday of last week. Made some mistakes at first, lacked the discipline to follow my strategy, I think I was a tad over-keen to trade at first. I've just purchased "A Complete Guide to VPA" so I'll start on that tonight.
I have a quick question though if you wouldn't mind answering. In Forex for Beginners, you use the Currency Strength Indicator to look for potential indicators of an upcoming reversal. And then from this, you use the currency matrix and analysis to confirm the reversal. I was just wondering if you could use the same strategy to indicate a continuing trend? If this is explained in the book I've just purchased I apologise, I just thought I'd ask.
For Example
For example, if both the Aus and Usd are...
