Technical Analysis for Major Currencies

>> Forex Technical Analysis | Written by Crown Forex | Sep 14 07 07:02 GMT |

EURO

The European currency fluctuated in a balanced move today after it lost a lot of momentum after it couldn't breach the major resistance level at 1.3920s, so the Euro might tend to do some correction towards the downside today. Meanwhile the technical indicators show that the Euro got in an over bought area.

The trading range for today might be between the key resistance level at 1.4000 and the key support level at 1.3800.

The general trend is up as far as 1. 3270 remains intact targets now at 1.4050 and 1.4220

Support: 1.3885, 1.3865, 1.3837, 1.3817, 1.3797
Resistance: 1.3905, 1.3916, 1.3930, 1.3950, 1.3985

Recommendation: We expect selling Euro below 1.3900 with a target at 1.3830 stop loss above 1.3950.

GBP

The British pound moved towards the upside hitting the key resistance level at 2.0340s at the beginning of the session yesterday; but after that the pound found the tendency to move down until 2.0200 support levels, therefore the pound is expected to move to the downside direction today due to the bearish diversion.

The trading range for today might be between the key resistance level at 2.0360 and the key support level at 2.0080.

The general trend is up as far as 1.9700 remains intact targets now at 2.0635 and 2.0740.

Support: 2.0200, 2.0180, 2.0148, 2.0125, 2.0100
Resistance: 2.0225, 2.0225, 2.0280, 2.0300, 2.0330

Recommendation: We expect selling sterling below 2.0240 with a target at 2.0120 stop loss above 2.0290.

JPY

The dollar against the Japanese yen yesterday moved in a bullish pattern ignoring the strength of the major resistance level at 114.40s, so it managed to drive through the upside wave to hit the upper resistance level at 115.50s, the pair today is expected to progress towards the upside as long as it maintains high levels of volume.

The trading range for today will be between the key resistance at 116.70 and the key support at 114.00.

The general trend is down as far as 124.60 remains intact, targets at 112.40 and 111.20.

Support: 114.87, 114.67, 114.48, 114.26, 114.04
Resistance: 115.05, 115.25, 115.55, 115.78, 116.00

Recommendation: We expect buying USD/JPY above 114.85 with a target at 115.80, stop loss below 114.35.

CHF

The dollar against the SWISS Frank yesterday fluctuated in a balanced move with some tendency towards the upside since it got in an over-sold area; the false break to the bottom yesterday at 1.1800 support levels indicated the upside potential for the pair today.

The trading range for today will be between the key resistances at 1.1970 the key support at 1.1800.

The general trend is down as far as 1.2540 remains intact, targets at 1.1665and 1.1445.

Support: 1.1850, 1.1826, 1.1805, 1.1780, 1.1752
Resistance: 1.1877, 1.1900, 1.1920, 1.1938, 1.1956

Recommendation: We expect buying USD/CHF above 1.1850 with a target at 1.1930, stop loss below 1.1810.

CAD

The dollar against the Canadian Dollar just finished the bearish pattern yesterday and hence we expect the pair to mange to move towards the upside in a reversal pattern despite that the technical indicators haven't adjusted yet.

The trading range for today will be between the key resistance at 1.0460 and the key support at 1.0300.

The general trend is down as far as 1.0850 remains intact, targets will be at 1.0300 and 1.0200.

Support: 1.0345, 1.0325, 1.0285, 1.0250, 1.0225
Resistance: 1.0365, 1.0380, 1.0400, 1.0423, 1.0450

Recommendation: We expect buying USD/CAD above 1.0330 with a target at 1.0440, stop loss below 1.0280.


Disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.

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FOREX : Foreign Exchange Market

FOREX is a word play on the term Foreign Exchange Market. It is a market for buying and selling of currencies from all over the world. Certainly, such transactions are bound to be voluminous. It is just an estimate that there are about transactions of $1.5 trillion USD on a daily basis in the FOREX. Now just compare this with the paltry $300 billion USD a day transactions for the US Treasury Bond and the $100 billion a day transactions for the US Stock Exchange.

The FOREX came into existence in 1971 when the fixed currency exchanges were abolished. Currencies no longer had fixed values after that; on the contrary, their rates (mostly taken in comparison with the USD) were fluctuating, and changed on a daily basis. Throughout the seventies and the eighties the FOREX grew steadily, showing more advancement in the later years. The market has stupendously grown from $70 billion USD a day to the staggering amount that it transacts today on a daily basis.

There are actually about five thousand trading institutions in the FOREX. These include international banks, central government banks such as the US Federal Reserve, and commercial companies and brokers for all types of foreign currency exchange. The best thing that shows the unbiased nature of the FOREX market is that it has no fixed headquarters anywhere – it operates primarily from all major cities like New York, Tokyo, London, Hong Kong, Singapore, Paris, Frankfurt, etc. One can even use the telephone or the internet to make the transactions. The major businesses at the FOREX are the buying and selling of products in other countries. Several transactions are also conducted from the currency brokers or traders who stand to make small profits with the daily fluctuations in the market.

Most of the FOREX business is centered on big banks and financial institutions, but it doesn’t mean that the FOREX is inaccessible to small investors. The recent changes in the financial regulations have effectuated this accessibility. Earlier, a minimum transaction size was required to conduct business with the FOREX. But the current rules have made it possible to break large inter-bank units into smaller bits. Each bit is worth as less as $100,000. This makes it possible to each individual investor through loans that are extended for trading, known as leverage. The ratio to control the lots is 100:1. This means, every $1000 USD will allow one to control $100,000 on the FOREX.

The benefits of trading with the FOREX are mentioned below:-

(1) Liquidity of Investments – As the FOREX is a huge market, the funds have a very high degree of liquidity. This is because of the presence of the international banks who provide their bids and carry out a large number of transactions on a daily basis. Therefore, there is always a buyer or seller for any type of currency.

(2) Highest Degree of Accessibility – The FOREX is open 24 hours a day for 5 days a week. Every Monday morning the exchange opens at Australian Standard Time and closes on Friday afternoon at New York time. Greater accessibility is provided because the transactions can be conducted from the person’s home or office.

(3) Open Market – At the FOREX, there are no secrets. All the fluctuations that occur in the market are made accessible to everyone at the same time. There is no insider trading in the FOREX.

(4) No Commission – There is no hassle of paying commission to the brokers in the FOREX. Here the brokers earn by setting up a difference between the buying price and the selling price of a currency, which is known as a spread.

It must be understood by now that for the FOREX to work effectively, the currencies must always be traded in pairs. For instance, the Japanese yen must be traded against the euro. When one kind of currency is sold, there should be another to be bought in its stead.

The profit happens because there is always mobility between the different currencies. Even if there is a miniscule change in the exchange rate, then it could mean substantial changes in the profits due to the large amount of money involved in the transactions. People are thronging to the FOREX and not any other institution due to the trust that they have in it. To add to the advantage, the market is absolutely well-advanced and uses sophisticated software for dealing out its transactions.

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