EUR-USD Technical Analysis

Correction is in the process for the euro-dollar pair as you can see the market is closely moving on the correct line of the middle moving average for weekly time frame. So the expectation for advance movement in the major trend is still bearish as indicated by the monthly time frame MACD line is moving downwards.




Looking from the fundamental perspective

Mon
Jan 26 4:30am GBP BBA Mortgage Approvals 22.1K (increased) 17.3K (decreased)
9:59am USD Existing Home Sales 4.74M (increased) 4.45M (previous)
10:00am USD CB Leading Index m/m 0.3% (increased) -0.4% (previous)

Tue
Jan 27
2:00am EUR German Import Prices m/m -4.0% (decrease) -3.4% (previous)
4:00am CHF UBS Consumption Indicator 1.15 (increase) 0.96 (previous)
4:00am EUR German Ifo Business Climate 83.0 (increased) 82.7 (previous)
4:00am EUR Current Account -16.0B (decreased) -6.0B (previous)
6:00am GBP CBI Realized Sales -47 (increase) -55 (previous)
9:00am USD S&P/CS Composite-20 HPI y/y -18.2% (decreased) -18.1% (previous)
9:59am USD Richmond Manufacturing Index -49 (increased) -55 (previous)
10:00am USD CB Consumer Confidence 37.7 (decreased) 38.6 (previous)

Wed
Jan 28
2:00am EUR GfK German Consumer Climate 2.2 (remains) 2.2 (previous)
All Day EUR German Prelim CPI m/m -0.5% (decreased) 0.3% (previous)
Day 1 ALL WEF Annual Meetings
5:30am CHF KOF Economic Barometer -0.87 (decreased) -0.45 (previous)

As shown from the above economic data released from Monday until half of Wednesday. There are mixed data from the US and European zone that caused the market to move according to mathematical behavior of the technical indicators. If there was extreme one sided data it might goes overbought or oversold as happened in the first place.

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Forex - Fundamental Factors

Even though fundamental factors are not significant to the majority of technical traders, yet it is vital to spot risky and profitable moment in forex trading. We should not ignore the random effect that create the volatility of the market even though we know that every movement is bound to certain boundary in technical perspective.

Take for example during one day of trading there are plenty of fundamental news that is going to be release during that day. And mostly they consist of high impact on the market movement. The failure to take notice of the situation ahead may drive your trading day become very unpredictable due to the random effect. One of the most riskiest fundamental data is the Non-Farm Payroll data which can rip you off 200 pips or points within seconds.

So in this case no matter no matter how much you believe in the Technical factors, but you should not ignore the fundamental part of it.

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Forex - Foundation of technical indicators simple moving average

If you are unfamiliar with technical indicators you might find it very different from one another and plenty of them to learn. There are stochastic, exponential average, moving average convergence divergence, bollinger band, relative strength index (RSI), etc.

However not many realize that those indicators are made of the same thing which is the very simple moving average that we know. The only different is that there are made of different settings in their time frame parameters that why they look different. Take for example MACD is using 2 simple moving average line that convergence and divergence at certain movement. Secondly Bollinger Bands using 3 moving average lines which made up the bottom, middle, and the upper band. Likewise for stochastic, RSI, rate of change, williams R%, Average Directional Movement Index (ADX), etc.

All these look very different if you have not known about it. What set up apart from looking the same to one another is simply the parameter setting. If you adjust MACD and Slow stochastic is actually can be use interchangeably to one another.

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Forex - Monitoring eur/usd and gbp/usd correlation effect.

Usually the eur-usd and gbp-usd pair is positively correlated to one another, which means that if the eur-usd goes up gbp-usd also will go up and vice versa. However at this point of time the two pairs is not positively correlated due to changes in economic uncertainties that affect the global currencies. Therefore whenever eur-usd is going up GBP-USD is going down vice versa.

The effect of this actually you can see from the EUR-GBP which correlated directly to both of the pairs. So if you look at the eur/gbp it should shows very significant impact in its movement. As you can see that the EUR-GBP pair is moving downward this shows that the Euro is currently Weaker than pound sterling.


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Forex - eur/usd technical analysis

Exactly as expect based on technical analysis two weeks ago here... the pair is moving taking its correction to the right position where it should be. By right it should be going up until 1.4720 because the farthest it can go up to 1.3612. However rest be reminded again this is forex anything can happen as overbought/oversold is happening almost on daily basis.

So the long-term trend is opening up its path again to continue what has been walk through before. The advance target should be position right back to the bottom of 1.2358. However in the intermediate term this pair should be moving side ways within the range 1.3650 and 1.3347 as indicated on the candlestick chart below.




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