Resistance | Forex Blog

January 24, 2012

Breaking January Highs for USD/JPY

Filed under: Forex News — Tags: a-and-board, bought-large, chance, chart of the day, finally-broke, members-lowered, resistance, technically, time, top stories — admin @ 8:50 am

USD/JPY finally broke Jan high (77.34) today hitting 77.39 at the time of writing. This may be on the back of news that Bank of Japan cut its growth outlook. Governor Shirakawa and board members lowered the economic forecast to 2 percent from an October estimate of 2.2 percent for fiscal 2012. In addition we heard funds bought large in the run up hoping to trigger stops above 77.40. We think this resistance will not be easy to break hence going short with a tight stop is worth considering if the risk/reward for you makes sense. Technically 76.50 should be quite solid now if not for anything other than the chance of BOJ intervention. The next level on the top side is 78.25.

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October 14, 2011

Is Gold About To Tank?

Filed under: Forex News — Tags: a-300-pip, a-good-buying, a-new-price, charts, hang-out-with, price, resistance, resolution — admin @ 7:53 am

Let me start off by saying, I love gold. I want to own it, possess it, even want to hang out with it. However, I’m not certain that I love AT THIS PRICE. Part of the “problem” with being a market technician is that you just have to go by what the charts tell us. And this daily chart of gold may be screaming SELL!

What I have identified on this chart is the dreaded Bear Flag pattern, which is something gold bugs don’t want to see. What is essentially the inverse of the Bull Pennant or Flag Pattern (see Tuesdays chart of EUR for discussion, which incidentally has just completed for a 300 pip gain in three days!), the Bear Flag pattern can mean that a major sell-off is coming.

Essentially, we take the length of the flagpole and subtract it from the resistance area to determine our price target. As you can see on the chart below, the flagpole started at $1800 as gold fell to roughly $1600 for a total of $200. We then subtract that amount from the resistance area at $1700 to get a new price target of $1500.

A fundamental justification for this could be the resolution of the Euro debt crisis which would take away from the safe-haven properties of gold, though gold has *many* different properties. This move lower could represent a good buying op for long-term investors, or the short could be a nice trade for the short-term players.

Don’t shoot the messenger!

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September 22, 2010

Yen Tactics!

Filed under: Forex News — Tags: currency, exception-locked, forextrading, priority, resistance, sentiment, strategy, support, technical, trade — admin @ 3:03 pm

THE USDJPY IN A SIDEWAYS PATTERN RESULTING IN 3 CLEAR STRATEGIES

By Abe Cofnas

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August 2, 2010

Emerging Trends in FX

Filed under: Forex News — Tags: a-currency-pair, a-good-idea, a-lot-about, charts, jpg, outer-support-, pound-sterling, resistance, support-if-bad, support-there, week — admin @ 1:17 pm

I’d like to share Abe Cofnas’ outlook for the week ahead in FX. Abe has been trading FX and teaching other how to trade for years and I think you’ll find his insight valuable.

The Majors are at the start of the week providing some challenges as some are testing key Resistance and Support levels. Let’s scan the market using basic Resistance and Support. Support and Resistance tell us a lot about the battle between buyers and sellers. Keep in mind that a currency pair, when at a key resistance or support line is there for a “reason”. The currency pair reacts to sentiment about the underlying economy and prospects for growth, or inflation. This means that the day chart points to barriers that are quite important. Failure to penetrate Day Resistance or Support are major selling or buying signals. Let’s get started:

USDCHF

This pair is an inverse image of the EURUSD. Recent severe weakness in the US Dollar shows up here. This week the currency pair could test Support if bad economic news continues. The range is wide and there is a lot of intra day trading in between.

USDCAD

The Loonie is looking strong and may test 1.0150 this week. The best strategy is to sell on retracement failures up on the 4 Hour charts.

EURUSD - CHALLENGE TO THE BULL SURGE

We see a clear technical challenge facing the EURUSD as it hit’s a 61.8% FIB LINE. The outlook is very cautious and traders need to see the EURUSD confirm a breakout above or a failure to sustain this level is a good sell point.

AUDUSD - SOARING BUT MAY GET TIRED

The technicals are stunning and very bullish. But joining the upside here requires caution and expect a pull back and then buy on a resumption of the move up - after the pullback.

USDJPY - TEST OF SUPPORT AT 86.00

Trading the USDJPY this week will be quite challenging because in play is test of Support. There is inner support at 86.24 and Outer Support at 85.94 Bulls and Bears are very balanced. Waiting for a breakout is a better strategy.

GBPUSD - NEARLY PARABOLIC

The Pound Sterling is nearly parabolic in its price action. This doesn’t mean that a selling opportunity is ahead. Instead, traders should expect a pullback- but it’s not a good idea to go against the strong sentiment here.

I wish you much success in your trading!

Abe

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November 17, 2009

Technical Analysis Suggests Euro Could Rise to $1.5285

Filed under: OANDA News — Tags: a-15-month-high, above-the-four, currency-will, euro, forex round up, hashimoto, indicators, resistance, senior-analyst, signal-the-euro, tokyo-at-the — admin @ 7:18 am

According to technical charts prepared by the Bank of Tokyo-Mitsubishi UFJ Ltd., the euro could rise to a 15-month high of $1.5285 if it manages to break the resistance line at $1.5063. Resistance at $1.5063 represents the Oct. 26 high, which the currency will probably strengthen toward in the next two weeks, said Masashi Hashimoto, a senior analyst in Tokyo at the unit of Japan’s biggest publicly traded bank. The euro’s close last week above the four-week moving average of $1.4869 and the rising trend in other indicators such as the 13-week moving average signal the euro may gain further, Hashimoto said.

“Positive signals are outweighing negative ones when you compare them at this moment,” Hashimoto said in a Bloomberg interview. “Hence, the euro is likely to go up.”

Bloomberg

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July 31, 2009

Which is more important? Trend direction or Support/Resistance?

Filed under: Forex News — Tags: a-short-amount, between-there, fire, fuels-the-fire, improvement, markets, money, opinion, placed-on-oil, resistance, time, traders-grapple, will-ultimately — admin @ 6:52 am

Many traders grapple with this all the time. To me it’s clear. The “trend is the trend” because it continues on and blows through supports in a downtrend and resistances in an uptrend.

A current example of this is AUD/USD. Get ready for the AUD/USD to break higher as the “bottom and top pickers” try to short this pair soon (since they are believers that the resistance will hold). The trend traders will get the last laugh, as the top pickers get caught on the wrong side of the market and have to scramble to cover their losing positions which only “fuels the fire” for the trend trader. Click on the charts to enlarge them.

This is why “top and bottom pickers” almost always give up their money to the trend followers. Oh sure, there’s eventually ONE of these that will ultimately be the true “top or bottom” but in between ..there are tons of places that appear to be the top or bottom and are losing trades. So the odds are skewed against them and skewed towards the trend trader.

See a historical example of this here.

Sean Hyman

www.forextradingblog.com

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July 30, 2009

How to decide on which currency pair to trade: EUR/USD or GBP/USD

Filed under: Forex News — Tags: account, charts, daily, declining, differences, fuels-the-fire, gbp, markets, money, moving-average, pick-on-which, resistance, time, upward-as-shown, will-ultimately — admin @ 8:29 am

Many times, traders wonder “which pair is the better pick”. I say, let the charts decide it for you and take all of the guess work out of it.

Since both the EUR/USD and GBP/USD have the USD in common, their differences are EUR and GBP. So if we got a “dollar move” they’re both going to be affected some. However, the real difference comes in when you directly compare EUR to GBP and see which is the stronger/weaker currency.

You can do this by looking to the EUR/GBP pair. Right now, EUR/GBP is in an obvious downtrend. This can be seen by the red downtrend line below. It can be seen by the declining 50 day simple moving average (SMA). It can also be seen by the MACD being below the zero line and its lines crossing over to the downside. This can also be seen, most recently from it breaking down out of its upward correction (red circled area). Click on the chart below to enlarge it.

Therefore, CLEARLY right now, the stronger of the two is the GBP/USD. So if you feel that these pairs are headed higher, then go with GBP/USD. Right now, GBP/USD’s daily trend is upward, so that would be my pick.

Now if you felt that the trend was downward or turning downward, then you’d pick the “weaker candidate” to pick on which would be EUR/USD (buy strength/short weakness). However, right now, so far their daily trends are still upward as shown by the 50 period simple moving average on their daily charts.

Notice though, how much EUR/USD is struggling and how GBP/USD is starting to pop up higher right now. That’s due to the advantage of buying the stronger candidate. And right now, that’s GBP/USD when you directly compare the two.

You can do this for any pairs. For instance, now if I wanted to see if GBP or AUD were the strongest, I could look to the GBP/AUD pair. This could give me a bias as to whether I’d be better off buying GBP/USD or AUD/USD, for instance.

Currencies are a “comparative/relative” game. In other words, you always want to “rig the fight” with the absolute strongest candidate vs. the absolute weakest candidate and then “bet on that match” by buying the stronger vs. the weaker.

This, coupled with great risk management, will greatly improve your odds of success in trading. In other words, don’t over-leverage your account. You should probably be trading no more than 1 standard mini lot per $2,000-$3,000 in your account OR 1 micro lot per $200 to $300 in your micro account.

Sean Hyman

www.forextradingblog.com

P.S. - Want to learn more about fundamentals and technicals? Sign up for an inexpensive, only forex course today and we’ll show you how: http://www.mywealth.com/currency-trading.php

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