forex EUR-USD Technical Analysis

As i have discussed any interference from the fundamental data may result in major correction of the pair. And today you can see the result of that as it broke the resistance line of 1.2881 then move further upside to make intermediate correction. This scenario is influence by the slight improvement in the European economic data and one bad data from the US zone as follow;

GBP Nationwide HPI m/m
-1.4% Actual
-1.5% Previous

EUR German Unemployment Change
-26K Actual
-29K Previous

EUR Consumer Confidence
-24 Actual
-19 Previous

USD Advance GDP q/q
-0.3% Actual
2.8% Previous

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forex EUR-USD Technical Analysis

This time i would like to discuss a short-term movement of the EUR-USD pair instead of the long-term as i usually did in the previous post. So!! As long as there is no interference from the fundamental factors, the pair will not make reversal anytime soon. And in fact there could be further down turns follow up.

Minor upward correction ideal point is limited up to 1.2831 as both the stochastic and MACD is moving upward direction as shown in the 4 hourly time frame. Therefore from that boundary the market will fluctuates gradually downwards if there is no interference from the fundamental data release. The space for further downwards movement is still open wide as the slow stochastic on the monthly time frame is still going down.

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When The forex Market Move?

The basic fundamental problem of every trader is a matter of when?!! Yes, when the market will move?

Even those who have the most experience who have spent years trading and studying forex the market still fail to get the precise timing of breakout. In fact there are many have become de-motivated after experiencing failures over and over again. The harder they tried and the worst it becomes and the more knowledge they have the scarier the market will look as their mindset becoming over cautious towards every movement.

This nerve breaking experience actually applies to every traders including of those the professional and novice alike. No one will ever escape it unless we just simply accept the fact it is actually work that way. The more you try to defy the fact the worst you will become because you are not willing to move on, but would rather prefer to remember the losses you made.

Therefore because of this we need to understand that everyone’s problem is simply because we cannot know when the market will move. This is a fact that we cannot deny and it is always true. Studying the precise market movement will be like a journey searching for the origin of life on this planet and end up still no answer. No matter how hard we try there will always be something that is very frustrating obstacle stand in the way especially the fundamental aspects of the market. Let’s say for example we try to predict when the market will move up and at the same time there is significant fundamental data will be released. As we expected the market to move up instead it goes to the opposite direction and wipe out significant amount of the margin. Due to extreme fears of losing the entire margin we may take a quick action to close the position as soon as possible. This is one of the most frustrating situations we don’t want to be.

Second scenario would be most of the time during significant breakout and the market is going for extreme oversold/overbought position. Everyone’s mindset quickly shifts to the thoughts of instant reversal. Instead of making immediate reversal the market moving slowly in side way flat direction, after long hours of frustration to wait we close that position. And suddenly at the same time the market move quickly for reversal which gives another big disappointment for closing the position early.

This is a dilemma of when?!! Please do not study when the market will move because you will end up getting the biggest frustration in your life. Instead you should learn how to guess the ideal time using the available time frame. Learn how to use MACD and Stochastic combination within a time frame of daily, 4 hourly, hourly, etc until 5 minutes. This will sharpen your instinct to determine the ideal time of market movement.

A simple example is if both Moving Average Convergence/Divergence and Slow Stochastic in 30 time frames are moving up. Therefore you will expect that the market in 5 minute time frame will move either to middle or to the top of Bollinger band line. This is depending on the starting position of the market if the market start from the bottom therefore it will end up in the middle or if it is start from the middle then it will end up on the top line of the Bollinger band.

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Forex USD-CAD Technical Analysis

It was a long bearish trend since 5 years ago (2003), the pair has been moving downwards relentlessly and pushing for excessive oversold in December 2007. At that time everyone must be thinking it will not be going up anytime soon as the pair generally moving in flat direction for at least 10 months in the year 2008. It is a long time to wait and many traders have already forget their analysis and expectation of this pair.

As of today after 10 months later (October 2009) since January 2008 suddenly we are now witnessing that long awaiting expectation for a shift of power from the bear to the bull. However we still cannot confirmed a continuous trend because this is only the first move. Until the monthly slow stochastic is moving upwards for the second time after correction then we can confirmed the bull is taking full control of the situation.

At it current position (see picture) actually it is simply overbought, therefore we may expect a small correction to take place before continuation.

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Forex AUD-USD Technical Analysis

The current scenario of AUD-USD situation is the result of its stubborn long-term bullish effect. The trend was moving up for long years and it shows no stopping sign until it goes overbought. As pay back time came the pair now is in the possession of the bear and the worst case, it is extremely oversold.

At this extreme oversold high certainty of reversal is ultimately imminent, because the big money is held in the hands of the few. As emotions starting to build up they will close their position to harvest profits, which may result in the market creating rapid reversal. Just watch out for monthly slow stochastic movement, if there is any sign to upward direction for this pair. Some others are already anxiously waiting for the big reversal that make up at least minimum total of 500 pips or more.

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forex EUR-USD Fundamental Analysis

After a long years of devaluation for the US dollar, it is now pay back time. The dollar is moving on the right track in searching for the ideal equilibrium point against any other currencies in the world such as Euro, Pound Sterling, Japanese Yen, Aussie dollar, etc.

A small improvement of the economic data in the Euro zone did not even make any impact on the Euro-Us Dollar pair. As you can see below comparison of Euro Zone economic data figures and the movement of Euro-USD still very much stronger.

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forex GBP-JPY Technical Analysis

GBP-JPY pair is currently falling into an oversold position as shown by the black candlestick piercing the bottom band of the Bollinger indicator. Despite of this there will be no immediate reversal at this time just yet as long as the monthly stochastic still moving downwards. However once the reversal is starting to take place, it will be huge because of the oversold effect.

This pair the most volatile and dangerous pair for the novice traders because it can rip all your deposit in a sudden. Therefore please be warned that when you start to get addicted with the volatility movement you might regret it someday.

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Forex EUR-USD Technical Analysis

As all primary indicators such as Moving Average Convergence/Divergence (MACD) and Stochastic is still heading downwards this indicate that there is no immediate sign of resistance for the bear. Until at least monthly stochastic (5-5-3 setting) is heading upwards then we can expect the first resistance to take place.

Global economic uncertainties that is still going on at this time can add up the ingredient to extreme speculation which may push the market beyond its normal movement which pierce through the Bollinger bottom band. This can happen anytime when greed and fear meet together.

We will follow up on this situation when this happen in the future and for now just expect going down all along first!

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Forex EUR-JPY Technical Analysis

As expected in the previous post that the pair of EUR-JPY will eventually fall no matter without question. The only thing that we will never know is a matter of when it is going to happen. Now it is already happen it fall like a disgrace from heaven above as global financial crisis is adding the ingredients of disaster to the Euro currency.

This phenomena is simply explain by the simple mathematics of moving average where a currency trend will eventually stop moving at certain point following the cycle of economic ups and downs.

See the picture below showing a sharp fall of the EUR-JPY pair.

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