AUD-USD Technical Analysis (31 March 2009)

As far as bearish trend is concerned, in the long-term perspective the AUD-USD is always bearish at least for now and perhaps for another year based on Moving Average Convergence Divergence (MACD) indicator downward direction in monthly time frame. In the intermediate trend we can see it is currently having correction and resistance activities going on within the range 0.7133 (upper bollinger band) and 0.6169 (bottom bollinger band).

Despite of that concerns, what matters most to us is the intraday or short-term trading where we should make money. So where is going along this month? in order to answer this question i would like to refer back to my previous post in the past about candlestick chart counting.Counting candlestick, Candlestick counting post analysis, EUR-USD post analysis, EUR-USD Technical Analysis.

Based on the observation and back testing results that i have done in the past using candlestick counting we will use it to predict the overall movement of the AUD-USD along the month of April until it reaches the end of the month.
Alright now that we see 1 piece of white candlestick is already formed at the end of March. Since the slow stochastic in the monthly time frame is already iniatially moving upwards there for we expect another 1 piece of white candlestick will be formed again until the end month of April. We will test again the validity of this candlestick counting theory for this month.

If this theory is true, so if the if market is expected to move upside to form another white candlestick until the end month of April. Therefore we can estimate the movement of market within weekly and daily time frame as well. So whatever comes down during the period of weekly or daily must go up and this is valid throughout the month of April.

Let's observe and give me your feedback what is your opinion on this.

Something we don't know that you need to know in Forex Trading

As i was come from the rank of novice trader, i used to boast about my system telling people how accurate and effective it is. Day by day i am looking to improve the system into a perfect precise indicators to predict the exact time of break outs and also the distance from the initial until the end of the break outs.

However none of this will eventually work in the end and now i still prefer to trade within the range of safety zone and not to push myself to the limits where it should ended or precise setup. Why is this so?

Experience tells me so, when i come to realize that there are some unpredictable factors that playing bigger role in the currency market such as follow.

1. The number of people trading during a single day trade?
No body can predict or gather a statistical figure about the number of people trading in the forex market on daily basis. Even there is no technology yet to do this. If there is, then this will become an important factor to estimate the amount of money traded daily.

2. The amount of money traded on daily basis?
If we know the number of people trade in daily basis, we can determine the estimated volume of money traded. By knowing this we can precisely setup trading position at the correct place and estimate precise limit of movement based on the volume traded.

3. When will everyone place their trade?
This is an important questions that is never been solved in every minutes of trading. This effect can be seen on the daily trading chart of as to why there is short or long candlestick. Because not all people set up their trading at the same time.

Parabolic SAR Technical Indicator

Parabolic SAR (Stop And Reversal) was the developed by was developed by the famous technician Welles Wilder, creator of the relative strength index, and it is shown as a series of dots placed either above or below an asset's price on a chart. (Casey Murphy).

The application of Parabolic SAR is very simple. It shows the probability of market direction using a series of dots, for example when the dots moving below the chart, indicating that the market is moving upwards. Or the opposite when the dots moving above the chart, it indicates downward direction.

Notice that at the early break-out stages you can see the dots are much closer to each other until the break out happens, then it starting to break away from one another until it fades away. It is important to observe this patterns as it repeat itself on every breakouts.

This simple application has making it one of the popular technical indicators used by the novice and professional traders alike. Beside it is most of the most used in short-term forex trading. It can increase the effectiveness of market direction signal if combined with other indicators like RSI, MACD, Stochastic, and Bollinger Band.

Parabolic SAR on daily time frame GBP-USD pair bearish trend.

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GBP-USD Technical Analysis (29 March 2009)

As always GBP-USD movement is slightly identical to EUR-USD movement but it differs in the amount of volume traded everyday. The differences of volume can be monitored on the movement of EUR-GBP pair which is directly correlated with both the pound-usd and euro-usd.

In comparison to EUR-USD the pound-dollar bearish strength is far much stronger and you can notice only minor resistance is taking place at the bottom of the falls. How deeper it will fall we do not know as nobody is taking notes statistic of the volume traded daily. However what we do know is the previous resistance level 1.3755 is already been reach. This is an important point that we should take note off as everyone is expected for a reversal.

If the pair is forcing itself further downwards beyond that resistance level, at certain points it must stop and do a quick turnaround. As it happens then you can ride of the rising waves.

Indication: Strong Bearish (Downtrend)
Indicator: MACD Monthly Time Frame
Resistance Indicator: MACD & Slow Stochastic Weekly Time Frame (Upwards Direction)



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EUR-USD Technical Analysis (29 March 2009)

Based on the past historical patterns, it is likely that the euro-dollar pair will make major side ways trends that eventually will end up with at least 3 peaks and make up downwards triangle on the weekly time frames. This is very popular trends that usually happens in the minor time frames like 4 hourly. However this time it happens on the major weekly time frames. The overall long-term trends still show strong bearish indication. This is supported by technical indicators as follow.

Monthly Moving Average Convergence/Divergence (MACD): Downwards

Resistance level is supported by Weekly MACD and Slow stochastic is moving upwards in weak direction. This has resulted the market is trying to resist the fall as you can see the movement is heading sideways in gradual fall (triangle). In the end when the resistance is becoming weaker and weekly MACD or slow stochastic is also heading downwards, then continuation of the bear is begin again.


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