The overnight fall in the Nikkei 225 of 1.76% has resulted in an impressive two bar reversal (aka a shooting star) on the daily chart for the USD/JPY - so no surprise to see the pair move lower in this morning's trading session.
What is perhaps more significant is this move in the JPY is not consistent across the JPY pairs we follow on our matrix, and in particular the EUR/JPY and GBP/JPY. The latter is a pair I am looking to short on a longer term basis, but patience is required not least because I want to see the JPY begin to move away from the bottom (oversold) on the currency strength indicator. This also highlights a key aspect of forex trading, namely individual currencies can stay overbought or oversold for much longer than we expect. Much, of course, will depend on risk sentiment, and in particular whether the current downwards trend in equities continues, and if so then we...
Once GBP data is out of the way we can then look forward to the unemployment claims in the US and the Ivey PMI from Canada. Both items are released at the same time & here expect to see the biggest reaction in the USD/CAD. On the daily chart for the pair the resistance in the 1.2470 - 1.25 region (which also coincides with the VPOC), is putting a temporary brake on any move higher. On our daily currency strength indicator we do appear to have more downside for the CAD, particularly against the euro where we recently had a strong move away from the resistance in the 1.38 region.
As always the Canadian dollar will also reflect price trends for oil, and with OPEC now set on a collision course with the alternative energy suppliers in an overt price war, oil prices look set to remain low for years to come. Indeed OPEC themselves have publicly stated that oil will...
The EUR/NZD has delivered some excellent trading opportunities across all the timeframes this morning to the short side, following the recent heavily bearish sentiment towards the New Zealand dollar which has seen it weaken against all the major currencies. Indeed longer term the NZD is now looking increasingly oversold, so we may see this trend reflected on the slower timeframe charts in due course.
This morning's move was signalled initially with a move below the volume point of control (VPOC) on the 30 minute chart ( the yellow line), a move that was duly supported with rising volume and confirming the bearish sentiment. In addition, the transition in the trend monitor indicator from blue to red also confirmed this reversal, coupled with a pivot high indicator prior to the move through the VPOC. Since then, momentum to the downside has increased with volumes also rising sharply and confirming the wide spread down candle as we approach a potential area of support...
Here in UK election day is almost here & we can expect reactions as soon as the exit polls start posting as well as the actual results. Heaven only knows what is going to happen. So far GBP has been fairly well behaved - moving more as a result of USD & EUR.
Meanwhile in Asia - AUD has employment data to contend with. On 4hr CSI we have seen the AUD pull back & is also showing the NZD as hugely oversold, but as mentioned many times before a currency can stay stubbornly over stretched for a considerable time. And in the case of the Kiwi where it is still falling on the weekly and daily charts it is likely to stay down on the 4 hr chart. Of course AUD/USD is the one to watch, but expect to see moves in the AUD/NZD cross with some interesting volume/price action now developing in the slower timeframes, and with the NZD (...
In a relatively quiet day of trading in the forex markets with both the UK and Japan closed for public holidays, it's been the Canadian dollar which has moved significantly during the session, and picking up the longer term bearish tone once again. In early trading, the pair moved in a tight range, before finally breaking through the platform of support in the 1.2145 area and continuing lower to currently trade at 1.2095 at the time of writing. The price action has now continued lower with the volume point of control indicator (VPOC indicator MT4) remaining firmly in place above in the 1.2110 area on the 30 minute chart, and signalling further downside momentum in due course.
The trend monitor has remained firmly red throughout the trading session, and with the currency strength indicator to the left confirming further strength for the CAD and weakness for the USD, the volume point of control (VPOC) is likely to move to the next...
Ahead of the manufacturing production number the British pound has been particularly lively in the past couple of hours with 6 volatility candles alone being triggered on Cable on the 3 min chart.
For Cable, yesterday's rally which saw the pair bounce off support in the 1.4760 region was a move more akin to a 'dead cat bounce' as once the pair hit the major resistance at 1.4840 at the start of the US session opened the floodgates for some heavy duty selling. This took cable down 1.4684 before it finally managed to find some support as the market moved into Asia.
A number of reasons have been suggested for this move, including the tensions and uncertainty surrounding the upcoming UK election, and as highlighted yesterday, we are seeing a major sell off in UK gilts. In the face of such uncertainty It appears foreign investors would much rather move their money into US Treasuries and Asia, and Japanese investors in particular...
It's been another great day's trading on the EUR/AUD, which has continued the bearish tone from yesterday, following the RBA statement and a decision to keep interest rates on hold for the time being. The 60 minute chart has delivered a consistent trend today with the pair moving through the platform of support in the 1.4125 region and as defined with the accumulation and distribution indicator. The trend monitor at the bottom of the chart continues to confirm the bearish tone, supported by the trend dots indicator. Early this afternoon the wide spread down candle saw the pair close at 1.4016 on very high volume, and confirming the current bearish tone for the pair.
To the left of the chart, the Quantum currency strength indicator confirms the technical picture, with the euro (the orange line) now deep in oversold territory, and with the Aussie dollar (the blue line) continuing to rise deep into the overbought region. A great trade on this...
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 color during the minor congestion periods. The trend monitor sister indicator, the trend dots completes the picture and highlighting these congestion phases in advance.
Volumes throughout the move were in agreement and confirming the bullish sentiment for the pair with the accumulation and distribution indicator on NinjaTrader, highlighting the keys areas of support and resistance. The support platform at 1.4252 held firm during the...
Question
Hi Anna, Firstly, I just wanted to say I've just finished "Forex For Beginners" and I thoroughly enjoyed the book; found if 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, if both the Aus and Usd are...
