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Archive for November 9th, 2009

GoLearnForex Analysis 9/11/2009

November 9, 2009 at 9:35 am

Daily Technical Analysis By GoLearnForex

USD/JPY:

The Dollar Yen has been relatively volatile as of late.  On the chart below there are levels of support and resistance indicated by the bright green horizontal lines.  We have now tested 89.90 twice on the close.

INSERT CHART

Additionally, the 50 day MA is closing in on that level.  If an entire candle sits above the 50 Day MA then we would expect price to move towards the next resistance level at 92.00.  However, if the price closes below 89.90 then we would expect a further drop to the next level of support at 88.00.

Lastly, one additional chart to look at is the correlation between the DXY (which is an indexed weight of the dollar, based on a basket of currencies) versus the Yen.  What you see since April is that as the DXY has depreciated the JPY has appreciated. If you have a negative dollar bias than you will want to go Long the Yen as we approach S&R.

INSERT CHART

USD/CAD

The Canadian Dollar is in a very vulnerable position at this juncture.  Fundamentally, the CAD has come under pressure from its own Central Bank as well as recent poor economic data.  It completely retraced its mover lower towards Dollar parity.

I looked at the CAD over a number of different tenors from a 4 hour to a Daily to a Weekly.  On each of those charts there were technical indications that the CAD maybe in trouble.  I will focus on the weekly chart, although I do not trade from a weekly but rather use it for confirmation of trends.

INSERT CHART

Based on the chart above there are 3 points that get my attention even before we look at any additional oscillators or indicators or the like.  1) The red rectangular box shows levels congestion or S&R for the CAD. 2) The red lines that make up  the ‘v’ shows a complete retrace of the previous move 3) In the square red box you have a “Hammer” shaped candle (although it more so resembles a mallet).  A trader who purely uses candles would have closed out his Long CAD position after the formation of the Hammer on a weekly chart.

Looking at the daily chart the CAD is also closing in on the 50 day MA.  It is very possible that on poorer than expected economic news from Canada or a firmed greenback that the CAD will touch 1.10 this week.

G-20 Decides Economic Stimulus Will Continue By GoLearnForex

Equity Futures are mostly negative tonight suggesting a slightly lower open.  This weekend saw the board of governors from the G-20 assemble.  Although a number of important topics were discussed there was agreement amongst the board that economic stimulus should not be removed until further signs of a steadied economy are present.

We closed out last week with a bang as U.S Unemployment printed worse than expected to 10.2%.  This obviously concerns investors that if unemployment does not at least bottom it could derail the already fragile economic recovery.

There was a slightly quieter week this week on the data front.  We will be watching the Canadian Housing Starts for October.  Although we do not expect any surprises here, nonetheless the CAD is quite volatile these days.

Upcoming Forex Events for November 9, 2009

CAD Housing Starts  Forecast    155.00K    Previous  150.00K

JPY Bank Lending (YoY)  Previous   1.60%

GBP RICS House Price Balance  Forecast    29.00%    Previous  22.00%

AUD NAB Business Confidence       Previous  14.00

Analysis by http://www.golearnforex.net

Two different types of price charts

November 9, 2009 at 9:27 am

It’s actually my own contention that the FOREX traders who make long-term profits should be really very educated ones. One very basic part of the entire trader’s beginning education should always include the learning of reading price charts in the right way. Price charts are actually nothing so difficult. They are just the graphical way to show over time movement of price, and are sometimes known as the beginning or the foundation step of all the “technical analysis.”

You can simply put it in this way; technical analysis is defined as the method of applying large number of formulas and measurements to a specific price chart in order to make a prediction that what the trading market will be doing in the near future. There are large numbers of good books that are available on this particular subject, and it is really very essential that you and all the other FOREX traders who want to be really very successful should add them to their trading library.

Now lets us discuss about trading charts in brief. In general there are two major and the most important types of price and time charts that are available in the FOREX trading market and which is used by each and every the FOREX trader.  Both the type of trading chart has something that is really very similar. Some of The elements which they have in common are that both of them show various prices of the FOREX trading market like the open price, the high and the highest price, the low and the lowest price, and the closing price of whatever frame of time they are charting.

1. The first one that I am going to discuss is t5he price chart that is present in the forms of bar and hence they are called Bar Chart.

Bar Chart are the ones that look like long or small vertical lines, with a very small line on the horizontal side and that too on the left side, and even there is  a small horizontal line which is present on the right side. The top most line on the vertical side indicates the high price of the trading bar, whereas the line present at the bottom on the vertical side indicates the low price.

2. The second type of trading chart that I am going to discuss here is the Candlestick Chart.

These are the type of trading chart ones that are used by most of the FOREX traders today. They are drawn in such a way that they show a really very long or a very short body with a small line, which is sometimes extended out from the top, and on the other hand it is sometimes extended out from the bottom of the body.

Importance of understanding Forex currency charts

November 9, 2009 at 9:26 am

The Forex trading market is the most dynamic and fast-moving trading market. The way the Forex trading market is extremely changeable. You need to watch it continuously. If you want to get victory in Forex trading market, you have to learn about Forex charts and how to read these charts. You also need to learn the basics of Forex currency trading. First you need to learn Forex currency charts on the platform called Meta Trader 4. It is the most famous trading software and easy to use. if you have sufficient computer knowledge and skills you can make use of MT4 trading software or platform.

The first that you require knowing about Forex currency charts is that there numerous various time frames for traders to look at. You also have to decide what time frame you wish to make use of. You are also able to see an option on Meta trader software on the top side for D1, M5, H4, M30 and M15.  This means that you can look at Forex trading chart that can report for every time period listed. In spite of which Forex chart you are looking at, you are still to looking at the same trading market.

Generally the large the Forex chart you are looking at. The less often you are going to trade. When you will trade on weekly and monthly basis, you are looking for the great moves in the trading market. It generally assists to have big balance to work with in such situations. You are not searching for a big move in the trading market, which will give you a lot of gains. You are not actually concerned about the small movements, which take place on everyday basis. You are just concerned about the big money. Hence, you only place few trades and spend very less time in front of the Forex charts.

Whereas, when you look at the small time frames such as M30, H1, M5, you are going to watch the Forex charts frequently. You perhaps make use of a more often trading strategy. You may place numerous trades everyday. Several scalping strategies also make use of Forex charts as you are just looking for short bursts in the trading market to grid you a few pips simultaneously.

Regardless of which Forex trading charts you make use of, you also need to find a best trading strategy to gain huge profits. You can use any chart you want. If you do dot know how to trade correctly then your chance of losing money are a lot. In Forex trading market, you require maximizing your chances on each chart, which you can. You also need to spend some time looking at the various Forex charts on a demo account before you begin with actual money.

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Daily Review 09/11/2009

November 9, 2009 at 9:22 am

USD Dollar (USD)

The Dollar strengthened versus most majors after Unemployment in U.S. Jumped to 10.2% and Payrolls Fell by 190,000 lowering expectations to a recent rate increase. NASDAQ and Dow Jones rose by 0.25% and 0.17% respectively, Crude oil fell by 2.8% closed at 77.43$ a barrel, Gold (XAU) continued to rise on Friday touching 1100$ , and closed at 1095$ an ounce. No economic data expected today.

EURO (EUR)

The Euro weakened versus the Dollar trading with a low of 1.4829 and with a high of 1.4843. German industrial orders rose by 0.9% in September less than 1.0% forecast. Today, German Industrial Production is expected at 1.4% vs. 1.7% prior.

EUR/USD – Last: 1.4860

Resistance

1.4885

1.4917

Support

1.4812

1.4703

1.4626

British Pound (GBP)

The Pound rose versus the Dollar after U.K. producer prices rose for an 8th straight month in October as Oil and import costs gained and manufacturers sought to defend profit margins damaged in the longest recession on record. Overall, GBP/USD traded with a low of 1.6518 and with a high of 1.6635. No economic data expected today.

GBP/USD – Last: 1.6621

Resistance

1.6622

1.6672

1.6741

Support

1.6518

1.6465

1.64

Japanese Yen (JPY)

The Yen strengthened versus the Dollar after the International Monetary Fund said traders are probably using the Dollar to fund carry trades around the world and it may still be overvalued. All in all, USD/JPY traded with a low of 89.61 and with a high of 90.81. No economic data expected today.

USD/JPY-Last: 89.87

Resistance

90

90.85

91.05

Support

89.61

89.5

Canadian dollar (CAD)

The Canadian Dollar weakened against The Dollar after Employment Change came out worse than expected at -43.2K vs. 10K forecast and the Unemployment Rate came out worse at 8.6% vs. 8.5 forecasts. Overall, USD/CAD traded with a low of 1.0689 and with a high of 1.0751. Today, Housing Starts are expected at 157K vs. 149K prior.

CAD/USD – Last: 1.0742

Resistance

1.078

1.0853

Support

1.0713

1.0605

Research by http://www.ufxbank.com