The USD fights back... will it sustain ?

from the monthly chart we can see clearly that this is a bearish engulfing pattern being formed at the resistance 1.5140 area this year. With a slew of good data from the US and investors seems to be upbeat on the road to recovery will we see the fed raising interest rates sooner in 2010 ? Technically the chart seems to suggest a reversal pattern or a deep correction for the pair at the moment. Lets see how things will unfold next year as we brace ourselves for a brand new start to the year 2010!

Outstation

been outstation since December 15th 2009. going online with the help of the 3G modem and my trusted notebook PC. Well, work is as usual with trades being placed according to plan. some pips :)

1.4500 reached

looking back on the post at 15th November 2009

looking back on the post at 15th November, bearish reversal signs were all around but it did not materialize immediately the effect, instead it took a few weeks to see the pair to move to the intended targeted area. as of now the move is only 50% completed.

Looking at this recent graph, and comparing to the previous one above, we see that after the double top reversal pattern being printed, price did not move immediately in the intended direction but instead tried to move even higher, but each time as it rallies, a massive sell off will occur thus printing a string of bearish patterns. what we can observe is that, there is exhaustion in these moves higher and there is not enough buyers in the market already to push the pair higher. which can be seen by the pair did not manage to stay above the double top resistance area. So from here we can see that getting a big picture of the overall scenario and also reading and interpreting the price action is crucial for catching the right moves in the market.

Bearish outlook for the EU this week

Bearish signal were flashing in the pair for the past few weeks ever since the pair printed the first bearish reversal signal (weekly chart) at the end of October 2009. The bearish reversal signal is now more or less confirmed with a break lower in the pair. with 1.4625 tested and tried to break lower, we now see a potential move lower in the pair. If the pair manages to break the 1.4625 level we might see 1.4447 being visited again.

fundamental wise, option traders are reported to be betting on the strength of the dollar amid speculation that the fed will raise borrowing costs next year after a slew of good economic data being printed out recently. This had helped the dollar to gain some strength across the board as traders sees risk of carry trades being unwind if the fed will act on raising interest rates soon.

9th Dcember 2009 - correction in EU

The pair had been correcting since reaching the high at 1.5140 region. uptrend trendline had been violated and support is seen at last month's low at 1.4700/1.4600 region.

7th December 2009

The EU seems now to have broken an important level of daily support trendline. The rising wedge in H4 chart recently had fulfilled its prophecy. Today we have Trichet and Bernanke on the news. both are expect to deliver speeches around 8-12AM EST. with the EU now at an important support, their speeches might move the market today. So, keep an alert on and trade carefully.

pheeew... been busy lately..

been very engrossed with developing my own indicators and EA lately based mostly on price action of course :) well NFP today might have some impact on the markets though the market seems to be extremely quite lately with the holidays ahead.

Price action EA

200 pips range for almost 2 weeks !

it seems that we are now trapped in a range of roughly 200 pips for almost 2 weeks already, will we be trapped in this range for the rest of the month or will we see a strong break in either direction? on the daily chart things seems to be more of a bearish tone with very limited upside potential, hopefully we will get a good move once this range is broken.

EU the week ahead

the lower trendline and the support at 1.4840/00 still seems intact, price action might be choppy here as we expect the bulls and bears to fight for control at this area. The double top bearish reversal will still hold true as long as the top does not get taken out. if it breaks, we might look for a possible 400pips correction in the pair to retest the 1.4447 area.

Double top with outside day reversal pattern

9th November 2009

NFP and FOMC week

EU the week ahead

The pair managed to push higher in the past few sessions but failed to to maintain the high above 1.5050, weakness in the pair might attract in further selling to around the 1.4840 area where we expect to see accumulation starts for EU to go higher aiming the 1.5300 region in near term.

21st October 2009

the pair retraces from the psychological level of 1.5000 high. support now lies at 1.4885 and 1.4840 region, resistance would be the 1.4944 and 1.4966

EU the week ahead

from the weekly graph it clearly can be seen that the uptrend might pause at the congestion zone here with the upper range of the zone as possible resistance to the rally. With Strong USD policy being reiterated recently, the rally might find some resistance here and retest certain key supports before resuming.

A turning point to risk aversion theory ?

from the fundamental aspect of viewpoint, the last NFP showed us some hint of how the market might react to the existing risk aversion theory, where people will hop onto the greenback for safety in the event of economic uncertainties. In the last example of NFP we saw that the investors are now less risk averse maybe people have in the back of their minds that the economy is improving further and ugly results in NFP doesnt seem to fuel the greenback's strength this round. And the fact that the rates is tagged at 0.25% for the feds, we hv a good reason to believe as well that the smart money will find their way to higher yielding currency, hence the greenback might lose its appeal at a time like this. Well, has the market change its perception of risk? We will see in the next episode of the NFP.

6th October 2009

EU the week ahead

from the weekly charts the previous candle seems to be closing below the doji candle formed earlier last week, this formation is a an evening star doji formation which brings about a bearish tone to the rally. with G7 calling out for stronger dollar it seems that Friday POST-NFP rally might be capped short. and the price action here might favour the USD.

2nd October 2009

The NFP for September 2009 painted a rather disappointing figure, as per usual risk aversion tale goes, we would expect the USD to strengthen as investors flocked to safer heaven vehicles, but it seems that this time is not the case as we see that the initial reaction of buying the dollar was soon replaced by selling the USD. So from the daily chart we see another potential bounce from the trendline support, will this manifest to a higher high ? lets see next week, enjoy your weekends ppl! happy lunar festival for the Chinese which falls on 3rd October 2009.

1st October 2009

30th September 2009 Update 1

a possible formation of the inverted H&S with neckline at 1.4650 area is now observed. possible support to validate pattern include the 1.4585 and 1.4560 area

30th September 2009

The pair had made a potential break of the bear correction channel, this might signify the end of the current bear correction trend. keeping an eye for higher lows in the hourly charts and the prior low to hold.

EU the week ahead

The pair had manage to rally up to the resistance area at 1.4850 and the weekly chart is now showing signs of correction. immediate support is seen at 1.4600 and next important support would be the 1.4450 area which was the resistance turned support area.

23rd September 2009

price venture into fresh new year highs yesterday but failed to hold up at the area. Buying opportunity might still be around if 1.4750/70 region holds.

16th September 2009

The pair appears to have hit one of the important Resistance area which is was the december 2008 high at 1.4700 region. the pair currently face tought resistance ahead with the ascending channel ceiling and horizontal resistance at 1.4700 region, i would expect some pullback here before challenging the 1.4700

EU the week ahead

the pair had managed to break free and closed above the upper trading range this week, further upside might expected and near term target is at 1.4700 region. support can be seen at the 1.4450 region

10th September 2009

finally ! The pair finally breaks free of the zone at 1.4447 and next resistance would be the 1.4700 region. For now the pair trades above the 1.4447 area.

tips for going naked in the markets

to trade without indicators is kinda tough at the beginning, but one would get use to it quickly if we pay enough attention to Support and Resistance areas. For me the key to successful naked trading is to be able to identify S/R levels in the markets. Here are some basics to get one started in SR levels entry.

3rd September 2009

still, the EU is stucked in a range from 1.4175/1.4200 area to 1.4400 area. The pair had been in this resistance area for quite some time. and any strong break above 1.4400 will challenge the high at 1.4446, breaking the latter clearly will renew fresh buying interest. on the downside, immediate support is seen at at the 1.4200 region, breaking the latter will expose maybe 1.4050 in near term.

1st September 2009

based on the monthly chart, the EU is now at the resistance formed from the year high at 1.4450 area. the emergence of the spinning top in the monthly chart might indicate a pause for the rally. A correction might be in the cards as well as most global markets are in the oversold area, thus hampering the move up in EU.

27th August 2009

The pair seems to still stucked in a range near the upper resistance which happens to be very close to the year high at 1.4450 region. so far we are yet to witness strong buying pressure to push above the high at 1.4447. Price now trades around that region. on the whole the uptrend channel which can be clearly seen in the daily chart still holds.

20th August 2009

There are always 2 sides to a coin, which side will you pick?

For those who are actively trading the forex market in recent times might have notice the changes in the price action of the market. Well, I don’t know whether u guys are aware or I am still new in this field and lacking in experience, but the most obvious change in behaviour is that price action recently is extremely volatile, if we were to compare candle patterns in 5 minute charts. Candles these days are much more bigger compared to previous two months, and that we usually would see “V” shaped turning points in the market, thus making moves hard to catch at times. In addition to that the lack of a solid trend in the market does not make trading any easier. Again the theory of impermanence holds very true in the markets where we see changes across the market on an ongoing basis, that’s way strategy that works yesterday might not be able to perform as well in the near future when the market changes its behaviour. But nevertheless the evergreen techniques of using the SR levels and candlesticks still prove to be profitable. It would only be a hindrance at these times if one would choose to see the situation recently as hazardous and unproductive, but if one would view this situation as an avenue to improve on trading skills then in these challenging times we would see opportunity to discover new trading methods and improve our understanding on the markets. Learning never ends especially when we are dealing with human behaviour and the markets is build based on a large collection of human behaviour amplified by human emotions. So let us take this opportunity to expand and grow with the markets, the desire to excel and keep pace with the markets will eventually led to elite performance !

EU the week ahead

we can see that for this week the market failed to rally back to the peak at 1.4446 and instead tried to go further down, but found support at the 1.4080 region, i would see that the current situation is from neutral to slight bearish with support seen at 1.4050 to 1.4000 region and resistance at the 1.4300 to 1.4350 area. Bearish momentum might continue if we see the pair failed at the 1.4350 area again next week and that the support at 1.4000 gives way. Further up move must see clear break above the 1.4446 resistance.

13th August 2009

EU rally ahead of the FOMC later at 2:15AM (+8GMT). Lets see how things will play out.

12th August 2009