Perhaps, not surprisingly, it has been the Aussie and Kiwi which have responded the most to the PBOC (People's Bank of China) move to devalue the yuan, with the AUD/USD completely erasing last Friday's and Monday's gains to end yesterday's trading session just over the key 0.73 level. Further falls overnight has seen the pair tumble to 0.7224 since when it has staged a remarkable comeback in the London session to trade (at time of writing) at 0.7330. The move off the session lows has also co-incided with our last VPOC supoort line on both the daily and weekly charts. On the daily chart the first target for AUD/USD is the VPOC resistance at 0.7395, followed by further resistance at 0.7438, and yesterday's high.
However, the extent of the comeback for both pairs can be seen on the hourly charts where it has been the NZD/USD which has proved the stronger of the two with the decisive move away from the...
Click here to watch the video
Most technical indicators uncover and exploit the price patterns on the charts and make assumptions, suggestions, and predictions of the next price movement accordingly. However, price is only half the story. The measure of activity behind price movement is key. It is the crescendo and diminuendo of ‘market noise’ which holds the key. In other words - volume
For the traders of the past, tape reading was all they had, reading volume and price as the ticker tape punched out the last price and associated volume, a powerful approach we still use today with the Quantum tick volumes indicator.
But now, with the Quantum VPOC ( volume point of control) indicator we have taken the analysis of volume and price to a higher level, which both compliments and expands the VPA relationship. Whilst the Quantum tick volumes indicator considers the relationship between a single volume bar and its associated candle, the Quantum VPOC indicator analyses the density...
Have been reading that carnage is expected and word is EUR/USD has already dropped to 1.1029 - although my MT4 hasn't started as yet, so we will have to wait & see. Meantime here are some levels for some of the euro pairs :
EUR/USD - was already bearish & shorts at CFTC increased last week. Putting the 1.1029 aside for the time being - 1.1052 is the first level of support & if breached 1.0819 comes into play where a high volume node on the VPOC awaits.
EUR/JPY - Has been in congestion for a number of days having failed to breach the 140.78 price point & now looking to turn bearish. The immediate level below is at 137.57 with any move through here then likely to test the 136.69 region. The VPOC continues to remain in the 134.94 region for the time being and should this be taken out then a longer term bearish trend will ensue.
EUR/AUD - The interest rate...
In all the brouhaha about Greece and the euro it's easy to forget what else is going on in the forex market. Sometimes I feel Greece is taking up too much space in traders' heads at the expense of other markets and currencies. And for a perfect example of what I mean look no further than the continued strength in GBP which has seen some great trends in GBP/NZD & GBP/CAD & I'm still waiting for the GBP/JPY to turn lower, but only once we see a major reversal in risk sentiment.
On both charts the NinjaTrader trend monitor has remained firmly bullish with only a minor transition on the GBP/CAD reflecting the recent pause in the longer term trend. However, moving to the NinjaTrader currency strength indicator to the left of the chart, here we can see that the British Pound, the yellow line, is now moving ever deeper into the oversold region on the daily timeframe, so this trend...
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...
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...
The EUR/USD continues to look bearish as it sits on support between 1.0885 & 1.0890 & just below the VPOC the yellow line on the volume point of control indicator. This level has now been breached on good volume and should take the pair to 1.0863. In addition the trend monitor has also transitioned from blue to red and with the US unemployment data coming up shortly, this could provide further downwards momentum if the numbers are on target or better than expected. The forecast this time around is 271k against a previous of 274k and whilst this is an important number it is the backwash from Janet Yellen's US dollar positive comments which continue to drive the US dollar higher, coupled as always with ongoing concerns over the Greek debt issues, which have yet to be resolved - if ever!
The currency strength indicator is confirming the negative sentiment for the single currency with the orange line, the euro, reaching an...
Without wishing to downgrade this evening's FOMC minutes, which will no doubt result in the usual volatile market moves, stop hunting & general shenanigans, the main FED event takes places on Friday at 6.00 pm London time. This is when Janet Yellen is due to give an important speech about the US economic outlook, and so one to watch.
Meantime USD strength has continued overnight across the majors and into this morning, with German PPI helping to give the eurodollar a shove lower. Other items of note this morning include the MPC (Monetary Policy Committee) of the BOE playing their standard formation (football parlance) of 0-0-9. In other words 9 defenders, no midfield & no strikers.
For FED watchers FOMC Member Evans has been speaking in Munich and has been simply repeating his call for a delay in raising interest rates. No moves expected as he is re-iterating his well known stance as a dove. This is why we need to know where...
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...
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...
