Market trend analysis for 23rd of July 2011

News from Canada creates volatility on Friday

 

Hi, everyone. Let me do market trend analysis for Friday. I already mentioned yesterday, that there weren�t significant moves, so I can not show you many ways how you could have traded this or that security. However, news from Canada created some volatility in Canadian dollar pairs. One unpleasant thing was that most of the pairs were moving before the announcement came. When things like that happen you have to go to 5 minute or even better 1 minute time frames to choose best entry points for news trades. 

How you could trade usd/cad in the event

 

Let us briefly look at possibility to trade the news event in usd/cad pair. If you open 1 minute chart in usd/cad you will see that around 11:00 GMT the pair formed a very tiny channel with resistance at 0.9467 and support at 0.9460. As you can see placing orders at both ends of the channel would have been too risky. Therefore, in my opinion the most logical place to put your long order would have been at 0.9470 and a sell stop below 0.9440 level. In this way you could limit risk trading the event. As market went upwards your long order would have been opened and if you wanted to exit at an even number you would have been out of the trade after three minutes. Great!

So much for today! 

See also:

EUR/GBP

EUR/CAD

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Trend for 23rd of July 2011

Hi, everyone. Today was a pretty boring day in the markets. I do have to say much. I saw Euro weakening. Apart from that and a few other small moves there wasn�t really anything interesting in the markets. News from Canada moved some currency pairs, but I do not have much time today, so I am going to do the analysis for those moves tomorrow. Hope you did not lose money in the market today, but was able to win something. That much for today! See you tomorrow. 

See also:

GBP/USD

EUR/CHF

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Market trend analysis for 19th of July 2011

Gold and silver reverse

 

Hi, everyone. Let us do market trend analysis for today. I do not know what caused huge move in precious metals today, but silver and gold did collapse. This did not affect oil market, probably because Canadian dollar rose after positive reaction of the market to news from Canada. One thing is sure; if you are a technical day trader you could have predicted the reversal in silver and gold by watching price action in those commodities. 

A clear head and shoulder pattern in both securities on 1 hour chart could have given you enough stimuli to sell the commodities below the neck line. However, I do not trust head and shoulders patterns on 1 hour charts very much, because there are a lot of false signals on the time frames, especially when securities and trending in the way silver and gold do now. Unfortunately, silver slipped below its previous resistance and you can never know whether it will continue raging now or will come back to its multiyear trend soon. Gold looks a little bit stronger than silver now. I believe this phenomenon will change soon and silver will reign supreme. 

Possibility to trade eur/cad during news from Canada

 

News from Canada had big impact for currency and oil markets. Although the rates were left unchanged big dogs bought loonie pushing it higher against other currencies and causing oil to rise. I enjoy analyzing volatile pairs. These provide you with the best opportunities for they can walk the biggest distance when news is released. So, I will look how one could have traded eur/cad pair and you can analyze yourself how usd/cad or cad/jpy could have been traded during today�s news. 

I really think I won�t need it to do it quite soon for if you read my post you will probably are able to do it on your own. Anyway, news was scheduled at 13:00 GMT. It means you should have placed your stop orders a few minutes before the time. As the market was not very volatile before news release you can boldly place a buy stop above 1.3551 level and a sell stop below 1.3505 level. News came and the pair moved downwards. This would have opened your short order. When this happened you had to remove your long stop order and go down with your short order. You could have exited your first position at the first support of 1.3450 (previous support level) and left the other one to continue going. I think the second position would not have given you that much profit as the first one had because the market started retracing and your profit in the second position would have been lost. 

That�s how you could have traded Canadian news in eur/cad pair. Hope the market trend analysis was useful.  

See also:

Forex news trading

RSI

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Market trend analysis for 18th of July 2011

Commodities will continue their uptrend soon

 

Hi, everyone. Let us do market trend analysis for today. I hope you have seen how calm the markets were today. Well, I basically mean currency markets. This cannot be said about silver and gold. Rules of playing have been changed for the commodities since 15^th of July and I guess this is going to have a much bigger influence on the securities that we see it now. They are continuing rising and after a nice retracement at 39.50 level silver was able to launch another attack and break the level. I think the security is ready to see its� all time highs now. So, if you are not able to trade futures or spot market, maybe buying real metal will be a good means of investment for you. Like always, I want to warn you not to take what I write here as some signal to buy or sell any security. This is a free blog about trading and all information here is free of charge. It is educatory in nature, not advisory. 

Pound might collapse in no time

 

Pound was a little weak today. It strengthened at the start of the day, but failed to do it later. Eur/gbp for example, hit a very important support level and jumped off it, indicating that a medium term low has been established. Gbp/jpy after rising strongly last week, formed a reversal pattern on Friday (and today) and went down a little too. The same can be said about gbp/usd. You could actually sell it by placing a sell stop order below 1.6061 level. This would have been a good reversal trade. Pound keeps some efforts to fight commodity currencies (aud, cad and nzd), but I think it will fail soon, for technical picture is becoming more and more bearish bit by bit. It might retain some strength against chf though, because chf strength is overstretched now in all pairs. 

Economic news can bring back volatility tomorrow

 

We did not have any serious news today and this could be the reason why markets have been so calm. However, in my opinion storm is coming for we have three important pieces of economic news tomorrow. Firstly, it is data from Australia (AUD Reserve Bank's Board July Minutes) at 1:30 GMT. This could send Australian dollar and other commodity currencies and real commodities flying. Then we have data coming from Europe (EUR German ZEW Survey), which will impact Euro pairs. Finally data from bank of Canada (Bank of Canada Rate Decision) will be closely watched by all currency traders. I believe this piece of news will make a huge impact for the markets.

Let�s wait and see what tomorrow brings.

See also:

Follow the leader

MACD

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.

Market trend analysis for 14th of July 2011

Japanese Yen at crossroads

 

Hi, everyone. Let�s do market trend analysis for today. There were a few pieces of macroeconomic news released today, but they did not have major impact on the price action of currencies and other securities. You must have noticed that commodities such as silver and oil stopped falling and are trying to go up. Japanese Yen pairs are on crossroads. I think Yen will weaken soon. My assumptions are based on technical price action of various currency pairs. 

Silver will continue its� upward trend soon

 

Let us start from silver. It looks like the commodity finally found its� bottom and is ready to make new highs. It now sits at the end of the upper part of its current range. The security has been trapped in it from the 12^th of May and I suppose two months of a range are enough for silver, provided instability in world financial system and a lot of printing of money that is going on in the whole world. There are a lot of regulations going on in financial markets too. I think this is going to impact prices of silver a lot. Futures is becoming difficult to trade for governments are more and more interfering with financial markets. One never knows what they can decide to do in the future. Their decisions are usually pretty dumb. 

200 sma stopped fall in silver prices

 

If you look at daily chart in silver, you will see that bottom was established when the price hit 200 sma. I have already talked about importance of using this technical indicator in your trades. Be sure to put it on your charts and check the position of the indicator on various time frames. Let us watch now what happens at the resistance. Silver might stop there (39.50) for a while and even reverse, but do not forget that the path of least resistance is still upwards, not downwards. The same can be said about oil. If you have an investor type mentality, you should have bought both oil and silver when they fell to their most recent lows. I do not think bulls� era in commodity markets is over. 

Yen can fall soon

 

By looking at price action in Yen pairs I make a conclusion that Yen is going to fall in the nearest future. The way prices behaved in Yen pairs in the last three days resemble the way they behaved on the days 16-18^th of March, when after a strong up trend, Yen suddenly collapsed and started going down. There is one thing which I usually see on these reversal days and that is: prices fall very sharp on the last day of a downtrend, then on the same day they reverse and the following days the reversal continues. 

This can be clearly seen looking at gbp/jpy price action. The security fell sharply on the 12^th of this month, then the same day reversed upwards and has been going up in waves for the last two days. Other Yen pairs reflect the same situation.

Hope the market trend analysis was useful.

See also: 

Range 

Head and shoulders

Disclaimer

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.