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FXDailyDose – November 29, 2013

November 29, 2013 in FX Daily Dose

FX Daily Dose

Currency pair

Near-term Outlook

Comments – Overall Outlook

USD/JPY

bullish USD/JPY crossed the target of 102.52 which we had indicated yesterday and touched 102.61 before losing some momentum and slightly retreating to 102.11. The current sideways action should find support at 101.93. In case that support breaks then some more consolidation may come towards the support zone of 101.15 to 101.43. Overall the remains bullish and in case of a break over 102.61 the pair should target , first 102.88 resistance and then possibly the recent peak of 103.73.

EUR/USD

bullish The outlook for EUR/USD stays bullish but resistance is expected to continue for some time at 1.3620. First level of support is expected at 1.3580 and if this support holds and a break over 1.3620 takes place then the pair should target 1.3680/1.3688 resistance. In case the support at 1.3580 fails then some more downward consolidation would be expected first towards 1.3555 to 1.3568 support zone. Any break below 1.3555 will make the short-term outlook neutral but the overall outlook will stay bullish as long as EUR/USD stays above 1.3490.

USD/CAD

bullish USD/CAD’s price action is indicating a strong psychological resistance of 1.0600 level. The effort to break over that failed just a couple of pips above this resistance. If this resistance continues and a break below 1.0571 support takes place then some more downward consolidation towards the next support zone of 1.0520 to 1.0531 will be expected. Overall outlook for USD/CAD stays mildly bullish for further gains towards 1.0657 to 1.0673 resistance zone but a cautious approach is required as the pair is in a historical resistance zone. The quote from the past updates which stands good today also is: “During August 2010 the pair had faced a strong resistance at 1.0673 and from there it had fallen strongly first to 0.9445 and then to 0.9406. The next peak was at 1.0657 during October 2011 and that too had proven to be a very strong resistance. The pair had some bumpy ride after that before falling to 0.9633. The next resistance was faced at 1.0609 during July 2013.”

CAD/JPY

bullish CAD/JPY went further up to touch 96.83 and found some resistance before recovering to 96.70. A little caution is required as we have mentioning in past two updates that the resistance at 96.86 is critical. The outlook stays bullish and we expect a break over 96.86 now. With break over 96.86 further upward gains should come towards 97.11 first and then possibly 97.48 to 97.66 resistance zone of September 19th and July 24th respectively. This is not expected today but any decisive break over 97.66 should bring further gains to target 98.60. On the down side the first support is expected at 96.13 and even a break of that should find a strong support at 95.90. In case a break below 95.90 take place then the short-term outlook will become neutral but overall sentiments will be bullish as long as the price action stays above 95.00.

GBP/USD

bullish Yesterday we had indicated that GBP/USD should now target the resistance of 1.6381. The resistance was faced 7 pips below that at 1.6374. We stay bullish for GBP/USD and if the support at 1.6255 holds then a break over 1.6381 should target 1.6500 ranges. However the resistance near 1.6381 may prove to be critical and caution is required. Overall as long as the price stays above 1.6138, the outlook will stay bullish, however, if the resistance mentioned above continues to hold then deeper consolidations and even a reversal cannot be ignored.

EUR/GBP

Bearish EUR/GBP went to 0.8344 before finding some resistance. Our outlook stays same as what we had mentioned yesterday and we will quote that again: The overall outlook had been bearish but now the short-term outlook, which had turned to neutral, has also become bearish. However we shall wait for a break below 0.8316/0.8300 support zone as a confirmation for further fall. Any decisive break below 0.8300 should take EUR/GBP towards 0.8225 to 0.8240 support zone or more. On the upside resistance is now expected at 0.8390. Any break above that will turn the short-term outlook to neutral once again.

EUR/AUD

bullish EUR/AUD went further up to 1.5031 as we had indicated yesterday. The bullish sentiments are clearly in picture but our immediate outlook stays neutral. As we had mentioned yesterday that any attempt to sustain over 1.5000 have been falling since June 2010. The first attempt had failed in June 2010 at 1.5015 and after the pair had gone into a downtrend to go as low as 1.1605. The second attempt had failed at 1.4994 and the third at 1.5031. However any decisive break over 1.05031 should open the doors for 1.5220/1.5255 resistance. On the downside first level of support will be expected at 1.4843 but any break of that should bring further consolidation towards 1.4709 to 1.04715 support zone.

USD/INR

Neutral USD/INR is moving in a very narrow sideways range for past 6 days. There is no change in our view about USD/INR and our outlook stays same as what we have been mentioning for past 2 days. To repeat the same: “Resistance is expected below 63.02 and with that some deeper moves may come, however as long as USD/INR remains between the support of 61.71 and resistance of 63.02, our outlook stays neutral. In fact even a break below 61.71 will be expected to come up against a very strong support at 61.50. As we have been mentioning that USD/INR is stuck between the psychological levels of 60.00 and 65.00 after failing to test 70.00. Note: Within next 6 months we expect a break below 60.00 to test 58.74/58.80 level.”

Check previous entries of FxDailyDose.

You may also check the daily and weekly analysis for 8 currency pairs on the following pages:

Daily Analysis:

  1. EUR/USD daily analysis
  2. USD/JPY daily analysis
  3. GBP/USD daily analysis
  4. USD/CHF daily analysis
  5. AUD/USD daily analysis
  6. EUR/JPY daily analysis
  7. GBP/JPY daily analysis
  8. AUD/JPY daily analysis

Weekly Forex outlook

  1. EUR/USD outlook
  2. USD/JPY outlook
  3. GBP/USD outlook
  4. USD/CHF outlook
  5. AUD/USD outlook
  6. EUR/JPY outlook
  7. GBP/JPY outlook
  8. AUD/JPY outlook

AUDCHF testing major support – waiting for breakout trap to go long

November 28, 2013 in Forex Analysis

audchf testing market bottom

After a strong bearish rejection candle trade that we discussed in the war room ‘chart of the day’ commentary, the market sold off aggressively into lower prices. Now would be a good time for those in the AUDCHF short position to consider taking profits.

Price is now testing the ‘floor’ on the chart here as it moves into a major support level on the daily chart. We can see by zooming out how this level has acted as strong support before. We are waiting to see how price is going to react with this level.

If the market breaks through, we don’t want to chase price and sell into the breakout because this is a high-risk area for a market breakout trap to occur. If a breakout trap occurs, meaning that the market tries to push below this level but can’t maintain the lower prices and closes higher, then we could consider that the support level is holding and the bears are ‘out of steam’. We just have to sit on our hands and wait to see how the price action reacts in the upcoming trading sessions.

FXDailyDose – November 28, 2013

November 28, 2013 in FX Daily Dose

FX Daily Dose

Currency pair

Near-term Outlook

Comments – Overall Outlook

USD/JPY

bullish Yesterday we had indicated a move towards 102.30 to 102.50 resistance. USD/JPY has gone as high as 102.27 before finding some resistance but recovering again to 102.23. We still expect some more gains. If the pair breaks over 102.30 then it should target 102.48/102.52 range. This range had caused a strong resistance on May 28th and 29th and hence a caution will be required there. In case there is a decisive break over 102.52 then USD/JPY should target, first 102.88 resistance and then possibly the recent peak of 103.73.

EUR/USD

bullish Our outlooks for EUR/USD stays same as what we had mentioned in yesterday’s FXDailyDose. The pair had already touched 1.3613 and we, now, expect it to target 1.3680/1.3688 resistance. On the downside the first support is now expected at 1.3559. Any break of that may bring further consolidation towards the support range of 1.3518 to 1.3521 before a recovery from there. Overall outlook will stay bullish as long as EUR/USD stays above 1.3490.

USD/CAD

Neutral USD/CAD had broken over the 1.0583/1.0585 resistance to go as high as 1.0603 before losing some momentum. There is no change in our outlook from what we have been indicating for past couple of days. The overall outlook is mildly bullish but considering the fact that the pair is near some very strong resistance zone, a strong caution is required. The first support is now expected in the range of 1.0531 to 1.0550. With this support USD/CAD should target the strong resistance of 1.0609 first and maybe 1.0640 next. We will repeat what we have been indicating in the previous updates as ” During August 2010 the pair had faced a strong resistance at 1.0673 and from there it had fallen strongly first to 0.9445 and then to 0.9406. The next peak was at 1.0657 during October 2011 and that too had proven to be a very strong resistance. The pair had some bumpy ride after that before falling to 0.9633. The next resistance was faced at 1.0609 during July 2013.”

CAD/JPY

bullish CAD/JPY touched 96.68 and found some resistance. The pair again recovered strongly to 96.67. We expect some more upward moves but as we had mentioned yesterday that a strong resistance may come near 96.86. The current price action is quite close to that resistance and our views remain unchanged. We will quote from yesterday’s update – ” we wish to mention that the current price action is near a strong resistance zone and caution is required for any long position. Even though the overall outlook is mildly bullish but resistance is expected near 96.86 and even if there is a break above 96.86, a strong resistance should come at 97.11. On the downside any decisive break below the recent 95.90 may cause further consolidation towards 95.42. However as long as the price action stays above 95.00, the overall outlook will remain on positive side.”

GBP/USD

bullish GBP/USD broke over the resistance trend line which has been in place for over 4 years. It clearly indicates strong bullish sentiments and further upward moves are strongly expected. Till now the pair has touched the peak of 1.6346 and now the focus is 1.6381 resistance and with any break of that towards the psychological resistance of 1.6500 ranges. On the downside we expect support to hold in the range of 1.6220 to 1.6240. Any break below that may bring some more consolidation but as long as the price stays above 1.6138, the outlook will stay bullish.

EUR/GBP

Bearish EUR/GBP fell strongly to 0.8320. The overall outlook had been bearish but now the short-term outlook, which had turned to neutral, has also become bearish. However we shall wait for a break below 0.8316/0.8300 support zone as a confirmation for further fall. Any decisive break below 0.8300 should take EUR/GBP towards 0.8225 to 0.8240 support zone or more. On the upside resistance is now expected at 0.8390. Any break above that will turn the short-term outlook to neutral once again.

EUR/AUD

bullish Yesterday we had indicated the possibilities of a move towards 1.0460 and then possibly towards 1.5020/1.5030. EUR/AUD moved that way to go as high as 1.0490 before losing some momentum. Our outlook remains unchanged from yesterday i.e. further gains towards 1.5020/1.5030 should take place, however considering the psychological resistance of the approaching 1.5000 level we need to be cautious as any attempt to sustain over this level have been falling since June 2010. The first attempt had failed in June 2010 at 1.5015 and after the pair had gone into a downtrend to go as low as 1.1605. The second attempt had failed at 1.4994 and the third at 1.5031. However any decisive break over 1.05031 should open the doors for 1.5220/1.5255 resistance.

USD/INR

Neutral There is no change in our view about USD/INR and our outlook stays same as what we have been mentioning for past 2 days. To repeat the same: “Resistance is expected below 63.02 and with that some deeper moves may come, however as long as USD/INR remains between the support of 61.71 and resistance of 63.02, our outlook stays neutral. In fact even a break below 61.71 will be expected to come up against a very strong support at 61.50. As we have been mentioning that USD/INR is stuck between the psychological levels of 60.00 and 65.00 after failing to test 70.00. Note: Within next 6 months we expect a break below 60.00 to test 58.74/58.80 level.”

Check previous entries of FxDailyDose.

You may also check the daily and weekly analysis for 8 currency pairs on the following pages:

Daily Analysis:

  1. EUR/USD daily analysis
  2. USD/JPY daily analysis
  3. GBP/USD daily analysis
  4. USD/CHF daily analysis
  5. AUD/USD daily analysis
  6. EUR/JPY daily analysis
  7. GBP/JPY daily analysis
  8. AUD/JPY daily analysis

Weekly Forex outlook

  1. EUR/USD outlook
  2. USD/JPY outlook
  3. GBP/USD outlook
  4. USD/CHF outlook
  5. AUD/USD outlook
  6. EUR/JPY outlook
  7. GBP/JPY outlook
  8. AUD/JPY outlook

GBPUSD broke 4 year old resistance trend line

November 27, 2013 in Chart Alert

Two resistance and support trend lines have been guiding the price action of GBP/USD for past 4 years. We have been mentioning about these for past many months and the previous  update was in this chart alert. Today that history was broken when GBP/USD did not only broke above the resistance of 1.6260 but broke above this 4 year old resistance trend line to touch 1.6303.

The break

GBP/USD breaks over the resistance

Now where?

The next target should be 1.6381. A strong resistance may be faced there but a break over that should lay the red carpet for a test of the next psychological range of 1.6500. GBP/USD has been below that level for over past 2 years. The last effort was during the week of August 21st, 2011 when the pair had failed to sustain over 1.6500 after touching 1.6572

FXDailyDose – November 27, 2013

November 27, 2013 in FX Daily Dose

FX Daily Dose

Currency pair

Near-term Outlook

Comments – Overall Outlook

USD/JPY

bullish For past 2 days we have been mentioning that support for USD/JPY should hold in the range of 101.10 to 101.35. The first dip had found support at 101.33 and the second at 101.15. With the support holding well inside 101.00 ranges, our outlook stays exactly what it has been for past 2 days. Though initially we stay neutral but the overall outlook stays bullish and with support in the indicated range we expect further gains towards 102.30 to 102.50. On the upside the next critical resistance is 101.74 and a break over that will support the above mentioned view. On the other hand any break below 101.10 should bring further consolidation towards 100.40/100.50 and a jump from there.

EUR/USD

bullish EUR/USD’s break over 1.3580 resistance confirms the bullish sentiments. As we had mentioned in yesterday’s update, the focus will now be for further gains towards 1.3680/1.3688 resistance. On the downside the first support will be expected in the range of 1.3518 to 1.3521 and a break below this will start making the immediate outlook slightly neutral but in such case also a strong support should hold at 1.3399. In case a break below 1.3399 takes place then the focus will turn back towards downside, first towards 1.3345 support and then possibly for a retest of 1.3294.

USD/CAD

Neutral USD/CAD lost momentum after touching 1.0583. The pair has fallen into a volatile sideways mode between 1.0514 and 1.0583. The short-term outlook is neutral but the price action is indicating that 1.0500 is now acting as psychological support. As long as this support holds, the overall outlook stays mildly bullish. However if a break of 1.0514 support takes place though a support at 1.0500 is expected but such a move will increase the possibilities of a break of this psychological support. In such case USD/CAD should target the minor support at 1.0485 first and then possibly 1.0436. A cautious approach is required for any trading position because the current price action is near a very strong resistance zone. On the upside any break over 1.0583/1.0585 resistance should target 1.0609 next. We will again quote what we have been saying for past 2 days: ” In case USD/CAD manages a break over 1.0609 then it should target 1.0640 next. We also wish to mention the historical price action which shows that the pair is in a strong resistance zone. During August 2010 the pair had faced a strong resistance at 1.0673 and from there it had fallen strongly first to 0.9445 and then to 0.9406. The next peak was at 1.0657 during October 2011 and that too had proven to be a very strong resistance. The pair had some bumpy ride after that before falling to 0.9633. The next resistance was faced at 1.0609 during July 2013.”

CAD/JPY

Neutral CAD/JPY has gone into a sideways mode between the previous support of 95.70 and 96.52. As the support is holding well over the psychological level of 95.00, the overall outlook stays positive even though the short term outlook is neutral. While saying this we wish to mention that the current price action is near a strong resistance zone and caution is required for any long position. Even though the overall outlook is mildly bullish but resistance is expected near 96.86 and even if there is a break above 96.86, a strong resistance should come at 97.11. On the downside any decisive break below the recent 95.90 may cause further consolidation towards 95.42. However as long as the price action stays above 95.00, the overall outlook will remain on positive side.

GBP/USD

Neutral Since last week GBP/USD has been finding support well over the psychological 1.6000 level. During past 9 days the closest it has gone to that level was 1.6059. The recent two supports came at 1.6133 and 1.6138 respectively. This indicates the underlying bullish sentiments as the price action is trying to remain close to the resistance of 1.6260 and far from 1.6000. However, we are staying neutral of GBP/USD and will repeat what we had mentioned during the previous update: Only a break over 1.6260 will turn the focus for further upside first towards 1.6381 resistance and with any break of that towards the psychological resistance of 1.6500 ranges. GBP/USD is once again struggling at the resistance trend line which has been in place for past 4 years. Because of this resistance zone we stay neutral even if the sentiments are all bullish. Please do check this GBP/USD alert posted a couple of days back.

EUR/GBP

Neutral For past 2 days we had been mentioning that EUR/GBP should find resistance at 0.8385. There was an effort to break that resistance but the resistance came just 5 pips above that at 0.8390. There is not much change in our outlook and though initially we stay neutral but overall outlook is bearish till resistance holds below 0.8415. With this resistance in place a retest of 0.8300 will be expected. Overall a break below 0.8300 is required to expect further significant weakness towards 0.8225 to 0.8240 support zone or more. On the upside a break of 0.8415 may bring some consolidation towards 0.8460/0.8463 but in tat case also we will expect another fall from there.

EUR/AUD

bullish Yesterday we had indicated the possibilities of a move towards 1.4920 to 1.4960 resistance if support over 1.4645 holds. EUR/AUD moved that way and touched 1.4920. Further gains first towards 1.4960 and then possibly towards 1.5020/1.5030 should take place, however considering the psychological resistance of the approaching 1.5000 level we need to be cautious as any attempt to sustain over this level have been falling since June 2010. The first attempt had failed in June 2010 at 1.5015 and after the pair had gone into a downtrend to go as low as 1.1605. The second attempt had failed at 1.4994 and the third at 1.5031.

USD/INR

Neutral There is no change in our view about USD/INR and our outlook stays same as what we have been mentioning for past 2 days. To repeat the same: “Resistance is expected below 63.02 and with that some deeper moves may come, however as long as USD/INR remains between the support of 61.71 and resistance of 63.02, our outlook stays neutral. In fact even a break below 61.71 will be expected to come up against a very strong support at 61.50. As we have been mentioning that USD/INR is stuck between the psychological levels of 60.00 and 65.00 after failing to test 70.00. Note: Within next 6 months we expect a break below 60.00 to test 58.74/58.80 level.”

Check previous entries of FxDailyDose.

You may also check the daily and weekly analysis for 8 currency pairs on the following pages:

Daily Analysis:

  1. EUR/USD daily analysis
  2. USD/JPY daily analysis
  3. GBP/USD daily analysis
  4. USD/CHF daily analysis
  5. AUD/USD daily analysis
  6. EUR/JPY daily analysis
  7. GBP/JPY daily analysis
  8. AUD/JPY daily analysis

Weekly Forex outlook

  1. EUR/USD outlook
  2. USD/JPY outlook
  3. GBP/USD outlook
  4. USD/CHF outlook
  5. AUD/USD outlook
  6. EUR/JPY outlook
  7. GBP/JPY outlook
  8. AUD/JPY outlook

FXDailyDose – November 26, 2013

November 26, 2013 in FX Daily Dose

FX Daily Dose

Currency pair

Near-term Outlook

Comments – Overall Outlook

USD/JPY

bullish Yesterday we had mentioned that USD/JPY should find support in the range of 101.10 to 101.35. The support came at 101.33. Our outlook stays exactly same as what we had mentioned in yesterday’s Forex Daily Dose that if the support holds in the range of 101.10 to 101.35 then USD/JPY should target 102.30 to 102.50 resistance range next. On the other hand any break below 101.10 should bring further consolidation towards 100.40/100.50 and a jump from there.

EUR/USD

Neutral Yesterday we had mentioned that EUR/USD may fall towards 1.3465 to 1.3485 support zone. It fell but support came at 1.3490 i.e. 5 pips above the indicated support. Our outlook stays as same as yesterday. We are neutral for the short-term and expect the resistance to hold in the range of 1.3560 to 1.3580. With this resistance another drop should take place again towards 1.3465 to 1.3485 support zone. In case of a break below 1.3460 the focus will turn towards further consolidation to 1.3399/1.3400. However if the resistance of 1.3580 fails then EUR/USD should target 1.3680/1.3688 resistance.

USD/CAD

bullish Yesterday we had mentioned that we expect a break over 1.0568 and first resistance at 1.0585. The break took place and USD/CAD went as high as 1.0583 and found resistance 2 pips below the indicated resistance. The fall took it to 1.0522. Our outlook is still mildly bullish and we consider the recent drop to be a psychological one before going beyond 1.0500 ranges. We now expect a support over 1.0515. If this support holds and USD/CAD breaks above 1.0585 then the next target should be 1.0609. However this outlook will neutralize if USD/CAD breaks below 1.0500. Apart from this we wish to repeat what we had mentioned yesterday ” In case USD/CAD manages a break over 1.0609 then it should target 1.0640 next. We also wish to mention the historical price action which shows that the pair is in a strong resistance zone. During August 2010 the pair had faced a strong resistance at 1.0673 and from there it had fallen strongly first to 0.9445 and then to 0.9406. The next peak was at 1.0657 during October 2011 and that too had proven to be a very strong resistance. The pair had some bumpy ride after that before falling to 0.9633. The next resistance was faced at 1.0609 during July 2013.”

CAD/JPY

Neutral Yesterday we had indicated that CAD/JPY may face a resistance near 96.86, however the resistance was faced well below that and at 96.52. There is no change in our outlook from yesterday that even though the overall outlook is mildly bullish but resistance is expected near 96.86 and even if there is a break above 96.86, a strong resistance should come at 97.11. On the downside a good support should hold at 95.95. However, if this support fails then further consolidation may take place towards 95.42 support. The volatility is very low and the price action is in a sideways range between 96.11 and 96.52. A breakout on either side should take place sooner or later and that keeps the immediate outlook as neutral for CAD/JPY.

GBP/USD

Neutral The outlook for GBP/USD remains same as yesterday. With 1.6260 resistance holding we expect consolidation towards 1.6060 or more. Only a break over 1.6260 will turn the focus for further upside towards the psychological resistance of 1.6500 ranges. We will repeat what we had mentioned yesterday “GBP/USD is once again struggling at the resistance trend line which has been in place for past 4 years. Because of this resistance zone we stay neutral even if the sentiments are all bullish. Please do check this GBP/USD alert of yesterday.”

EUR/GBP

Neutral Yesterday we had mentioned that EUR/JPY should face resistance at 0.8385. The price is just below that after touching 0.8378. There is no change in our outlook from yesterday and we will repeat what we had indicated yesterday as “The overall outlook for EUR/GBP stays bearish but the immediate outlook is neutral. On the upside a resistance is expected at 0.8385 and if that holds then a retest of 0.8300 will be expected. Overall a break below 0.8300 is required to expect further significant weakness towards 0.8225 to 0.8240 support zone or more.”

EUR/AUD

bullish Yesterday we had indicated the possibilities of a move towards 1.4873 for EUR/AUD. The price moved towards that level but found resistance at 1.4843 and the pair broke the indicated minor support of 1.4742 and fell to 1.4709. Some more downward consolidation take place towards 1.4645 before another recovery. Our immediate outlook for EUR/AUD is neutral though overall we stay bullish as long as support holds over 1.4645. If support over 1.4645 holds then further gains towards 1.4920 to 1.4960 resistance cannot be ruled out. However considering the psychological resistance of the approaching 1.5000 level we need to be cautious as any attempt to sustain over this level have been falling since June 2010. The first attempt had failed in June 2010 at 1.5015 and after the pair had gone into a downtrend to go as low as 1.1605. The second attempt had failed at 1.4994 and the third at 1.5031.

USD/INR

Neutral There is no change of our outlook for USD/INR from yesterday and we will just repeat what we had mentioned yesterday: “Resistance is expected below 63.02 and with that some deeper moves may come, however as long as USD/INR remains between the support of 61.71 and resistance of 63.02, our outlook stays neutral. In fact even a break below 61.71 will be expected to come up against a very strong support at 61.50. As we have been mentioning that USD/INR is stuck between the psychological levels of 60.00 and 65.00 after failing to test 70.00. Note: Within next 6 months we expect a break below 60.00 to test 58.74/58.80 level.”

Check previous entries of FxDailyDose.

FXDailyDose – November 25, 2013

November 25, 2013 in FX Daily Dose

FX Daily Dose

Currency pair

Near-term Outlook

Comments – Overall Outlook

USD/JPY

bullish USD/JPY should find support in the range of 101.10 to 101.35. With this support further gains towards 102.30/102.50 resistance zone is expected. Our outlook stays bullish but if there is any break below 101.10 then some further consolidation may take place towards 100.40/100.50 support before further recovery.

EUR/USD

Neutral Our short-term outlook stays neutral for EUR/USD. Resistance may hold at 1.3580 and in such case some drop towards 1.3465 to 1.3485 support zone may take place. On the downside if there is a break below 1.3460 then the focus will turn back towards 1.3399 or more.

USD/CAD

bullish USD/CAD had found resistance for the second time at 1.0568. We expect a break of this resistance as the short-term outlook is now mildly bullish. With a break over 1.0568 some further gains will be expected. However, please note that even in such case a strong resistance may come first near 1.0585 and then 1.0609 and hence a caution is required. In case USD/CAD manages a break over 1.0609 then it should target 1.0640 next. We also wish to mention the historical price action which shows that the pair is in a strong resistance zone. During August 2010 the pair had faced a strong resistance at 1.0673 and from there it had fallen strongly first to 0.9445 and then to 0.9406. The next peak was at 1.0657 during October 2011 and that too had proven to be a very strong resistance. The pair had some bumpy ride after that before falling to 0.9633. The next resistance was faced at 1.0609 during July 2013. 

CAD/JPY

bullish The outlook for CAD/JPY is mildly bullish but even in case of further gains a strong resistance may come near 96.86. Even if this resistance fails another strong resistance may be faced immediately above this at 97.11. Considering a caution is required even if the sentiments are bullish.

GBP/USD

Neutral GBP/USD is once again struggling at the resistance trend line which has been in place for past 4 years. Because of this resistance zone we stay neutral even if the sentiments are all bullish. We will expect any significant gains only if there is a break over 1.6260. Please do check this GBP/USD alert of today.

EUR/GBP

Neutral The overall outlook for EUR/GBP stays bearish but the immediate outlook is neutral. On the upside a resistance is expected at 0.8385 and if that holds then a retest of 0.8300 will be expected. Overall a break below 0.8300 is required to expect further significant weakness towards 0.8225 to 0.8240 support zone or more.

EUR/AUD

bullish The outlook for EUR/AUD is now mildly bullish for some further gains, first towards 1.4873 and then possibly towards 1.4920 to 1.4960 resistance. However any break below 1.4742 minor support will turn the focus downwards for some deeper consolidation.

USD/INR

Neutral Resistance is expected below 63.02 and with that some deeper moves may come, however as long as USD/INR remains between the support of 61.71 and resistance of 63.02, our outlook stays neutral. In fact even a break below 61.71 will be expected to come up against a very strong support at 61.50. As we have been mentioning that USD/INR is stuck between the psychological levels of 60.00 and 65.00 after failing to test 70.00. Note: Within next 6 months we expect a break below 60.00 to test 58.74/58.80 level

Check previous entries of FxDailyDose.

GBP/USD – Will the history repeat?

November 24, 2013 in Chart Alert

For quite some time we have been talking about the long-term resistance and support trend lines for GBP/USD. We have been talking for quite some time because these trend lines have been in place for quite some time and that is over past 4 years. There was a break of the support trend line during February 2013 and after that the GBP/USD support line had turned into resistance but then during the mid-September the pair had come back into the normal range i.e. between these old support and resistance trend lines and has been staying there since then. There have been many efforts to break over the resistance but all failed. Now the pair is once again trying to break over and this time the effort seems to be rather aggressive. Let’s look at the weekly charts as follows:

GBP/USD weekly chart with resistance and support trend lines

GBP/USD - trying to break the resistance

Please note that the above chart is not covering the past 4 years and for that refer to the chart on one of the old updates as per the hyperlink mentioned above.

A closer look of the weekly chart

A closer look of GBP/USD weekly chart

What to expect?

As we mentioned above that the recent attempts to break over this resistance have been very quick and none of the failures has brought any reversals as on the previous occasions. This makes the possibilities of a break quite high this time. A break over the recent 1.6260 would confirm a failure of this trend line resistance and such a move should take GBP/USD towards the next psychological range of 1.6500. However, if another failure takes place at 1.6260 then a drop towards 1.6060 or more can not be ruled out.

Please share your opinions in the comment box below to discuss the price action further.

Common Themes in Common Trading Mistakes Part 2

November 23, 2013 in Forex Articles

In the first part of this article, we outlined some of the most common trading mistakes, and the some of the underlying traits that are exhibited by traders making those mistakes.  The unfortunate reality is that most traders fall into very predictable traps that could have (should have) been otherwise avoided.  But when we fail to take things slowly, do proper research, and approach the markets with a conservative mindset — we are playing with fire.  These common problems quickly take traders out of the game and destroy trading accounts in short periods of time.  Next, we look at some of the trade management mistakes that are commonly seen, and the various ways these practices fit into the general theme of unrealistic expectations.

Adding to Losing Trades

“When looking to average-down,” said Rick Bartlett, currency analyst at CornerTrader “traders tend to add too much to losing trades that have already begun to show a clear shift in the wrong direction.”  These traders begin to panic (because they are also often over-leveraged) and continue to commit to the position even though there is little reason to believe that there will be a reversal in the right direction at a later time.  This is essentially delusional behavior, which comes mostly from a common fear of loss.  What these traders have thus far failed to learn is that losses are inevitable and instead what traders should be looking to do is manage these losses properly.  This involves cutting positions before the negatives become excessive so that new trades can be opened.

The last area here is the tendency for new traders to over-leverage their trades on the expectation that the forex market will create immense wealth in a short period of time.  This line of thought fails to realize that the forex market is not a lottery and that gains will happen much more gradually than you would initially expect.  Of course, all traders would prefer to become immediate millionaires but this is unrealistic and this mentality fails to understand how the successful traders operate on a daily basis.  Market realities are much more mundane and involve a greater number of ups and downs in the process.

New traders must always remember that expectations must be properly managed in accordance with the way forex markets actually work.  But when traders understand these common issues, it becomes much easier to avoid these problems as the solutions are relatively easy to understand and rectify.  Once these situations are understood, it becomes much easier to gain a wider perspective and view the forex markets in a way that allows for successful trading over the long term.

Please also check Trading Psychology and Trading Discipline.

Common Themes in Common Trading Mistakes Part 1

November 23, 2013 in Forex Articles

There is a famous saying that the definition of insanity is repeating the same negative actions and expecting different results.  This is more true in the financial markets than just about anywhere else.  The main evidence for this is the fact that so many of the mistakes commonly made by traders exhibit strong similarities.  These mistakes are often repeated over and over despite very good advice to do otherwise.  For these reasons, it is a good idea to look at some of the similarities seen in these mistakes.  Once these become apparent, it can become easier to avoid these as the negative traits are more easily recognizable.

Common examples include over-leveraging, failing to exercise patience, and taking risky positions during times of heightened volatility.  Looking at these mistakes it should be obvious at this stage that there are come common themes that run through the lot.  For the most part, each of these mistakes involve some variation on the idea that new traders in the forex markets tend to have unrealistic expectations about their potential trading performances.  It is unfortunate that this tendency is as widespread as it is because this tends be the primary reason why most traders do not survive in this business.

Problems with Expectations

“When a forex trader positions himself before a news event,” said Rick Bartlett, currency analyst at CornerTrader. “that trader is experiencing the unrealistic expectation that news or economic events can be accurately predicted.”  These traders believe this enough that actual trades are placed and this is where the proverbial “line” is crossed and traders will likely begin to lose money.  The worst part about these types of situations is the fact that this is such an easily avoidable occurrence and if these traders would just wait until the news information is released (and see the resulting trend unfold), these traders would lose in far fewer trades and likely be able to stay involved in the forex markets for a much longer period of time.

Over-leveraging (risking too much on a given trade or during a specific day) and averaging-down are indicative of a similarly flawed trading mentality, in that traders are expecting an unrealistic outcome, despite the over-riding evidence in the other direction.  It is easy for traders to get caught up in these mindsets because the natural human reaction toward greed takes over and this logic becomes a casualty.  Any time you find yourself “hoping” for a preferred outcome rather than relying on the probabilities and the favorable odds, you should exit the trade and look for other opportunities.  This is the only way to approach the forex markets in a logical and contemplative way, and this is the only way to achieve successful results that are repeatable over the longer term.

Please also check Trading Psychology and Trading Discipline.

Futures Speculators boosted US Dollar forex bets to highest level in two months

November 23, 2013 in Forex Analysis

By CountingPips.com

cot-values



The latest data for the weekly Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders pushed their bullish bets on the US dollar last week to the highest level in two months.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, had an overall US dollar long position totaling $17.1 billion as of Tuesday November 19th, according to Reuters. This was a weekly change of $2.64 billion from the $14.46 billion bullish position that was registered on November 12th, according to the data from Reuters that calculates this amount by the total of US dollar contracts against the combined contracts of the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

The latest data puts the US dollar bullish positions at a new highest level since September 10th when US dollar bets were long at a total of $22.01 billion.

 

Individual Currencies Large Speculators Positions in Futures:

The large non-commercial net positions for each of the individual major currencies directly against the US dollar showed weekly increases for the British pound sterling, Swiss franc, Mexican peso, Australian dollar and the New Zealand dollar while there were weekly declines for the euro (lowest level since August), Canadian dollar and the Japanese yen which fell to the lowest level of 2013.

 

Individual Currency Charts:


EuroFX:

eurofx

Last Six Weeks of Large Trader Positions: EuroFX

Date Large Trader Net Positions Weekly Change
10/15/2013 60374 -8309
10/22/2013 72434 12060
10/29/2013 70617 -1817
11/05/2013 33143 -37474
11/12/2013 16826 -16317
11/19/2013 8911 -7915



British Pound Sterling:

gbp

Last Six Weeks of Large Trader Positions: Pound Sterling

Date Lg Trader Net Weekly Change
10/15/2013 12231 3460
10/22/2013 14262 2031
10/29/2013 10162 -4100
11/05/2013 -2392 -12554
11/12/2013 -9303 -6911
11/19/2013 -1665 7638



Japanese Yen:

jpy

Last Six Weeks of Large Trader Positions: Yen

Date Lg Trader Net Weekly Change
10/15/2013 -59266 -2169
10/22/2013 -71802 -12536
10/29/2013 -62395 9407
11/05/2013 -73792 -11397
11/12/2013 -95107 -21315
11/19/2013 -112216 -17109



Swiss Franc:

chf

Last Six Weeks of Large Trader Positions: Franc

Date Lg Trader Net Weekly Change
10/15/2013 10767 352
10/22/2013 10931 164
10/29/2013 11451 520
11/05/2013 8095 -3356
11/12/2013 3189 -4906
11/19/2013 3669 480



Canadian Dollar:

cad

Last Six Weeks of Large Trader Positions: CAD

Date Lg Trader Net Weekly Change
10/15/2013 -10814 -2151
10/22/2013 -5364 5450
10/29/2013 -15237 -9873
11/05/2013 -18002 -2765
11/12/2013 -16092 1910
11/19/2013 -16335 -243



Australian Dollar:

aud

Last Six Weeks of Large Trader Positions: AUD

Date Lg Trader Net Weekly Change
10/15/2013 -32237 -5833
10/22/2013 -22111 10126
10/29/2013 -23198 -1087
11/05/2013 -25067 -1869
11/12/2013 -35809 -10742
11/19/2013 -35762 47



New Zealand Dollar:

nzd

Last Six Weeks of Large Trader Positions: NZD

Date Lg Trader Net Weekly Change
10/15/2013 12668 1902
10/22/2013 13114 446
10/29/2013 10625 -2489
11/05/2013 9708 -917
11/12/2013 10366 658
11/19/2013 12476 2110



Mexican Peso:

mxn

Last Six Weeks of Large Trader Positions: MXN

Date Lg Trader Net Weekly Change
10/15/2013 7761 -3172
10/22/2013 7214 -547
10/29/2013 4896 -2318
11/05/2013 5180 284
11/12/2013 7017 1837
11/19/2013 9539 2522



*COT Report: The weekly commitment of traders report summarizes the total trader positions for open contracts in the futures trading markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.)

See more information and explanation on the weekly COT report from the CFTC website.




Article by CountingPips.comForex News

 

Market Commentary & last weeks performance 19th Nov 2013

November 19, 2013 in Forex Analysis

At the time of year, Forex volume tends to drop off into Christmas so the pattern we are currently seeing – fairly random price action with volatility spiking on news events allowing the market makers to run stops – is likely to continue. It is going to take some significant news events to break the current logjam and kick off trending moves. The latter is unlikely at this time so short term swing trades are the best approach here. It is important to avoid trades that are too obvious with stops in conspicuous places where the market makers will take them.
The dollar index is acting in a confused fashion making it difficult to get a directional bias as the dovish Yellen appointment at the Fed has relaxed tapering fears.  This is in contrast to the equity market and S+P 500 were chasing momentum in the past few months has worked well as this market continues to be pumped up relentlessly by the Fed. The event risk coming up this week is largely based on the Fed speak schedule and in addition the BOJ has a rate decision on Thursday.
Performance this week was on +1.67% on AVA and flat on Shelbourne Markets.
The link to the AVA Myfxbook account is here http://www.myfxbook.com/members/peterbr/fisic-ava-mam/616577
EURUSD- the odds of a move up or down look 50:50 here to me so I am standing aside on this for now. If I see a buy or sell extreme from a support or resistance area I will then use this to take a view.
GBPUSD- sterling is acting quite strongly backed by some good fundamental news from the UK recently. If the dollar index price action supports the move I will be looking for a run to 1.6260.
USDJPY- this pair is straddling the 100.00 zone pinned there by huge option expiry positions (billions of dollars apparently). If the price holds above 100.60 for some time, this may be a signal that the price will break higher out of the wedge. The yen pairs did act v strongly this week squeezing shorts. Against this is the time of year argument above. The BOJ rate decision on Thursday will be important.
AUDUSD – this pair along with related pairs GBPAUD and AUDNZD looks interesting. There is key resistance at 0.9430 and I will be watching to see if the bears can get the ball there for a return to the 0.92 -0.900 zone. Again, we have to see how the dollar index and QE taper bets line up as new information is released.