Currency Technical Report

EUR/USD

Resistance: 1,5630/ 1,5660/ 1,5700-10/ 1,5760/ 1,5800-20
Support: 1,5600-10/ 1,5575/ 1,5550/ 1,5530/ 1,5490-00

Comment : Euro's downward move yesterday reached the important support level of 1.5620-30, but the retracements that followed did not confirm its strength. The short term trend has turned bearish and reaching lower support levels is possible. The area of 1.5550-70 is the first target, followed by the area of 1.5490-00. The scenario of a short term sideways formation, which would lead to an immediate move resumption, has been canceled for the time being, as it is possible, by examining the daily chart, that we have entered a downward wave formation, which would lead back to 1.5350-00 area (as you can see in the daily chart above).

First resistance is found in the area of 1.5660, followed by the area of 1.5700-10. The break of the second could lead to the area of 1.5800-20 again and even to the previous tops.

We follow the new trend, for the time being and we wait for any signs of reversal...

TRADING EUR/USD : The weakness at the retracements made us turn to the bearish side until some signs of reversal appear or important support levels are reached...

A clear break of 1.5600 will be a good sign for sell positions with first target the area of 1,5550 followed by the area of 1,5500, which seems to be a stronger target. If we try sell positions after the break, we could add more positions in the area of 1.5620-30 in any retracement and stops will be set above the 1.5670 area.

Buy positions could be tried in the area of 1.5480-00 with stops below 1.5460, while small buy positions could be tried at 1.5550-60 area with close stops and target the area of 1.5600-10...

GBP/USD

Resistance: 1,9750/ 1,9780/ 1,9810/ 1,9850/ 1,9880
Support: 1,9700/ 1,9665/ 1,9625/ 1,9590

Comment : Move between the ranges that we had set, was the basic characteristic for the pound yesterday.

Today we can see the intention of reaching the support in 1.9700-10 area again.

A clear break of those levels will indicate that a short term tops has been formed and the reach of 1.9600-20 support will be the first target, according to the scenario of a greater formation (equal to euro's formation) which could lead to the base of 1.9400 once again...

Interim support emerges at 1.9670 area, while below 1.9580, next targets are in the area of 1.9500...

If 1.9700 support holds and the move accelerated above 1.9750, it will indicate that bulls are willing to support the short term base and resistance at 1.9800-30 will be tested again...

TRADING GBP/USD : Small buy positions could be tried at 1,9700 area «testing» the base. A clear break will be followed with sell positions and target the area of 1.9600-25. A possible reach of 1.9600-25 without any interim retracement (not very possible) will give buy opportunities. Stops should be set below 1.9570 and target at 1.9700...

USD/JPY

USD/CHF

FX Greece

DISCLAIMER

The details and information included in the above analysis, are part of research based exclusively on currency charts and are of purely instructional and educational nature. None of the information featuring in the analysis can be considered as an invitation for opening positions in FOREX market or in the market of forward contracts or any securities listed on an organized or unorganized market.
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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.

FOREX-DD : Forex Daily Analysis